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Cable/Video

Why Roberts Thinks Cable is Doing Just Fine

Over-the-top (OTT) services represent long-elusive freedom of choice! And simplicity! Oh, and lower bills! And now people are watching TV delivered by cellular carriers!! Can cable companies survive?

Can they?

Comcast Corp. (Nasdaq: CMCSA, CMCSK) chairman and CEO Brian Roberts, speaking at the Goldman Sachs Communacopia conference, calmly reassured analysts that MSOs are going to be alright, whether it's on their own or, he intimated, with help.

"Wireless wants to find a wire as fast as possible, and not everybody wants the same bundle," he observed.

Roberts has often hinted that there might be collaborative solutions to the respective, complementary shortcomings of wireline and wireless competitors. If MSOs and the leading wireless companies aren't talking yet, it's clear that Roberts thinks they should be.

Consider some of the signs that the wired and wireless worlds are converging: Here's T-Mobile US Inc. offering dual-mode cellular/WiFi phones, and its rivals following suit; Here's Altice buying Suddenlink Communications and Cablevision Systems Corp. (NYSE: CVC), all the while talking up the demonstrated value of the quad play in Europe. (See T-Mobile Turns Up VoLTE-to-WiFi Handoff and Altice Confirms $17.7B Bid for Cablevision.)

And here we have Roberts again making statements downplaying the supposed hostility between wireline and wireless competitors in the U.S.

So what to take away from Roberts' seemingly bland comments?

One conclusion starts with the observation that among US MSOs, Cablevision was one of the few remaining cable operators with more than 1 million subscribers that had not yet acquired another company or been bought (the others being Cox Communications Inc. and Mediacom Communications Corp. . That means the mega-deals among major US MSOs are about done. However, cross-category deals such as AT&T Inc. (NYSE: T)/DirecTV Group Inc. (NYSE: DTV) remain a possibility.

(Note that Dish Network LLC (Nasdaq: DISH) continues to float free, with Sprint Corp. (NYSE: S) and T-Mobile cited as perpetual takeover candidates).

Combined with the observation that WiFi and cellular appear increasingly complementary, it all leads to the conclusion that alliances among erstwhile competitors are the likely, perhaps even necessary, next steps in the evolution of the consumer communications services market.

That still leaves the threat of cord-cutting. Pundits were eager to diagnose the imminent death of the cable industry even before cord-cutting was detectable, which it now most certainly is. They're reading some of the signs correctly: Cord-cutting is gradually accelerating; the number of 'cord-nevers' is growing; more and more people are watching video on their phones.


Want to know more about the impact of Web services on the pay-TV sector? Check out our dedicated OTT services content channel here on Light Reading.


Even if Roberts was panicking, you'd never know it -- the man has the demeanor of a successful small-town mortician.

But he doesn't seem to be panicking at all. He placidly assured analysts at the Goldman conference that OTT competition in its current state of progress isn't quite as attractive as advertised. When viewers create their own bundles of OTT services, the cost can quickly get out of hand, he noted.

And it turns out that consumer needs are evolving. Different people desire different combinations of service, and their needs for services seem to evolve with time, he explained. Comcast (and other MSOs) are busy crafting multiple packages that suit those evolving needs.

In other words, perhaps the Death Of The Bundle is inevitable, but the old bird is clinging tenaciously to life. With careful estate planning, laying the old cable model to rest won't be as devastating as people fear.

— Brian Santo, Senior Editor, Test & Measurement/Components, Light Reading

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Phil_Britt 9/23/2015 | 12:33:20 PM
Re: Deep thoughts They've apparently gotten away from the "don't take no as an answer" upselling in customer service, but they still remind me of the old Lilly Tomlin skit: "We don't care, we don't have to, we're the phone company" (before AT&T breakup). Just substitute cable for phone.
KBode 9/23/2015 | 12:23:32 PM
Re: Deep thoughts They're desperately trying to turn that reputation around, but I've yet to see any meaningful upward ticks in any customer satisfaction surveys.
Phil_Britt 9/23/2015 | 12:07:34 PM
Re: Deep thoughts You're right about Comcast taking advantage. In too many places, there is no viable competition and satellite signals are iffy. My family (different locations) dealt with Comcast a few times. They basically ran wires where they wanted to (rather than where they would be out of sight), and had a philosophy of the customer is never right.
mendyk 9/21/2015 | 12:19:56 PM
Re: Deep thoughts Right -- the big transition -- or transformation, to use the obligatory term -- for broadband providers is to move away from the video bundle model, where margins are working their way to zero, to focus on delivering content-agnostic broadband service, where they get to keep the revenue. This is particularly true for the consumer market. The bundle won't be abandoned, but it will be marginalized.
KBode 9/21/2015 | 11:58:54 AM
Re: Deep thoughts Meanwhile things are looking pretty rosy for them on the fixed-line broadband market as well. They operate in a ton of places where AT&T and Verizon are backing away from fixed-line, leaving them as either the only game in town, or up against somebody that has no interest in competing with them whatsoever. Comcast's plan is clearly to take advantage of these captive users with usage caps.
KBode 9/21/2015 | 11:57:36 AM
Re: Sweating... I think people have been absolutely begging for more flexible cable TV lineups and pricing for a decade, but it's pretty clear cable only plans to respond to this demand once cord cutting reaches critical mass.
mendyk 9/21/2015 | 11:35:44 AM
Deep thoughts Brian -- "Wireless wants to find a wire as fast as possible" is the key to this, and one that remains underappreciated. For mobile broadband to stand up to demand, the last mile really has to shrink down to the last 100 feet, which is why WiFi is back in the conversation. 5G might change that, but if usage growth continues at the current rate, getting to the wireline network in the shortest distance possible is still going to be needed. Wireline operators remain not only relevant but also essential in all this, only some of them are forgetting that. Oh, and welcome to LR -- it's been a while since our paths crossed briefly at EE Times.
Ariella 9/21/2015 | 10:58:49 AM
Re: Sweating... <At some point, these cable  giants will realize they can battle cord cutting through (*gasp*) actually lowering prices a little.> @Kbode now that would be radical. Do you think people could handle it?
KBode 9/21/2015 | 10:23:32 AM
Sweating... Of course he's not sweating. He plans to impose usage caps (or a $30 surcharge to avoid usage caps) in all territories to offset any lost video revenues.

At some point, these cable  giants will realize they can battle cord cutting through (*gasp*) actually lowering prices a little.
jabailo 9/20/2015 | 2:55:31 PM
Re: Future opportunities The real question is when you decouple everything, what is the real value and what is the most competitive technology.

For example, nobody gets a cable subscription for the wires.  You get it for the TV shows.

Ok, so when you don't need a cable network for TV shows, then you're matching up network technology.  So, say you put Comcast's wires against CenturyLink's fibers.  Who wins?

You have to do a set of discrete match ups because OTT is the acid that eats away at the bundles.
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