Comcast has its content and broadcasts it, too. On the content
side, the company owns NBCUniversal, including the NBC TV network
and movie studios Universal Pictures and DreamWorks Animation.
Cable channels CNBC, MSNBC, and the USA Network are also under the
Comcast tent. As for distribution, Comcast is one of the biggest
pay-TV providers in the US with more than 29 million subscribers to
one or more of its cable services. Its broadband internet service
has about 25 million subscribers and its voice service has more
than 11.5 million customers. Other Comcast properties include the
Universal Studios theme parks and Telemundo, a leading
Spanish-language TV network in the US.
Operations
Comcast generates revenue in five business segments led by the
cable communications service that accounts for about 60% of
revenue. Then come the cable networks, about 15% of revenue,
broadcast TV, more than 10% of revenue, and filmed entertainment
and theme parks, a bit more than 5% each.
Comcast hasn't forgotten its hometown roots in Philadelphia.
Through its majority-owned subsidiary Comcast Spectacor, the
company owns Philadelphia's NHL franchise, the Flyers, as well as
the team's arena, the Wells Fargo Center. The subsidiary also
manages other venues used for sporting events and music concerts in
Philadelphia, as well as related service businesses including
Ovations Food Services and facilities management provider Global
Spectrum.
Geographic Reach
Comcast has operations of one kind or another in all 50 states.
Its cable communications operations are along the East Coast, in
the South, the Midwest, the West Coast, and Pacific Northwest. The
company owns and operates about 10 NBC-affiliate TV stations in the
some of the top markets in the country.
Sales and Marketing
Comcast offers its services directly to residential and business
customers through call centers, door-to-door selling, direct mail
advertising, television advertising, internet advertising, local
media advertising, telemarketing, and retail outlets. The company
spends about $6 billion a year on advertising, marketing, and
promotion.
Financial Performance
Comcast posted higher top and bottom lines in 2017, continuing a
decade-long rise in revenue and a seven-year increase in net
income. Abetting the streak were the acquisition of NBCUniversal
and of DreamWorks Animation SKG in 2016.
The Cable Communications segment's revenue increased 5% in 2017
with growth in video and high-speed internet services while voice
posted lower revenue. Average monthly revenue per residential
customer relationship rose to about $151 in 2017 from about $148 in
2016. The company gained in single product and double product
customers while the number of triple and quad product customers
declined. Business service moved higher in 2017, becoming a $6
billion a year business for Comcast.
NBCUniversal revenue rose 4% in 2017 on higher sales in cable
networks, movies, and theme parks, while broadcast TV sales slipped
(from lower ad revenue in a non-Olympic year). Well-performing
movies were The Fate of the Furious, Fifty Shades Darker, and
Despicable Me 3. More visitors spending more money drove theme park
revenue higher in 2017.
Net income more than doubled to nearly $23 billion, lifted by a
one-time tax benefit of about $13 billion from the US Tax Cuts and
Jobs Act signed into law late in 2017. Profit rose about 10% to
about $10 billion not counting the tax benefit.
Comcast generated $9.6 billion in free cash flow in 2017 and
returned $7.9 billion of capital to shareholders in stock buybacks
and dividends.
Strategy
To stanch the flow of video cable customers from its services,
Comcast has bundled multiple services and offered slimmed-down
cable deals (fewer, more selective channels) to attract and retain
customers. The company also has improved its customer service,
reducing wait times, increasing on-time arrivals, and adding
representatives to its customer call centers.
The changes might be paying off: Comcast added cable subscribers
in 2016 and 2017 after losing some 230,000 cable customers in 2014
and 2015. Comcast and other cable providers have lost customers --
called cord cutters -- who prefer to get their entertainment from
streaming services such as Netflix, YouTube, Hulu, and other
over-the-top services. In an offering to keep subscribers, Comcast
includes Netflix in some service bundles, adding Netflix fees to
the Comcast bill.
Another factor has been Comcast's X1 platform, a cloud-based
set-top box that offers live video, on-demand video, and digital
video recording. The service is available to Comcast customers
across the country. Besides added revenue from the X1 services,
Comcast looks for additional advertising revenue by using data
gained from viewer habits to customize ad targeting.
Adding to its array of services, Comcast in 2017 rolled out
wireless phone service to its internet customers. Called Xfinity
Mobile, the service offers several calling plans and had gained
about 580,000 users (it's available only to those who subscribe to
other Comcast services). Comcast leases space on Verizon's network,
which might hinder its ability to compete.
Mergers and Acquisitions
In 2016 NBCUniversal acquired DreamWorks Animation SKG Inc., a
maker of animated movies and TV shows, for about $3.8 billion. This
acquisition of the maker of films such as Shrek and
Kung Fu Panda series was made to bolster Comcast's
offerings for children's pictures for theatrical release.
Comcast acquired 51% of Universal Studios Japan for $1.5 billion
in 2015. The deal gives Comcast control of the Universal theme park
in Osaka, Japan.