Commerce plus broadcasting equals Comcast. The company's core cable division is the largest pay-TV provider in the US (ahead of satellite provider DIRECTV and direct competitor Time Warner Cable) with more than 22 million video subscribers. Comcast derives the bulk of its revenue from its cable services offered in 39 states and the District of Columbia. It has about 18 million broadband Internet subscribers, while its XFINITY computer telephony service has more than 9 million customers. Comcast also has cable programming interests, such as E!, G4, and The Golf Channel, and sells time to advertisers. In 2011 the company formed a joint venture with General Electric that gave it a 51% interest in NBCUniversal (NBCU).
The deal left GE with a 49% stake in NBCU valued at approximately $30 billion. As part of the deal, Comcast contributed assets and cash valued at about $14 billion, giving it control of a hefty portfolio of communications, media, and entertainment businesses. To its existing cable, phone service, and sports holdings, the company added the NBC television network, Spanish-language broadcaster Telemundo, Universal Studios, Focus Features, ten local NBC broadcast stations, and 15 cable channels including Bravo, CNBC, and the USA Network.
Other assets included in the deal were a long list of broadcast-related Internet media properties and the Universal Parks & Resorts theme parks in Orlando and Hollywood. The extensive catalog of feature films from Universal Pictures and Focus Features is a compelling addition to Comcast's selection of video-on-demand content and enables better distribution of movies and television programming to consumers via cable and mobile devices.
Key stipulations made by the FCC to allow the deal included a requirement that Comcast offer versions of content such as Saturday Night Live and other popular shows to online video purveyors such as Apple TV and YouTube under the same terms offered to cable and satellite carriers. Furthermore, Comcast is obligated to offer Internet videos to the online distribution partners of NBC's peers to avoid unfair practices against competitors. The company was also compelled to provide broadband Internet access as a reasonably-priced, stand-alone service to give subscribers the option of watching online video without also requiring them to be cable television customers. The company gained a 27% stake in Hulu, but gave up management control of the online video broadcaster to gain approval from the Justice Department for the deal.
Prior to the NBCU deal, the company had been taking incremental steps toward building its media and programming holdings and expanding its interactive digital services. Comcast in 2008 acquired social networking company Plaxo and style website DailyCandy as part of an effort to tap into new streams of advertising revenue by improving its online social connectivity capabilities. Comcast tied these services into existing properties managed by its Comcast Interactive Media Internet unit, such as Fancast.com (online video distribution) and Fandango (online entertainment and movie ticketing). Fandango and DailyCandy became part of NBCU following the creation of the joint venture, which also brought in the women's lifestyle site iVillage.
These deals served to further build the company's media holdings which include minority interests in networks and content providers such as iN DEMAND and SportsNet New York. Comcast bought the remaining 50% of New England Cable News (NECN) that it did not already own from The Hearst Corp. in 2009; NECN serves about 3 million subscribers in six New England states.
The company's financial performance in 2011 continued the positive effect of its media strategy and investments reflected in 2010 gains. The acquisition of NBCU helped Comcast eclipse 2010 growth, producing a nearly 50% rise in revenues for 2011. The relatively flat profit in 2010 was bested by a nearly 15% rise in the bottom line for 2011.
In 2010 the company bought wholesale VoIP telephony services provider New Global Telecom in another move to build out its digital phone services for small business customers, in particular. This followed the purchase of local telephone exchange carrier CIMCO Communications the previous year. Its SpectrumCo joint venture with competitors Time Warner Cable and Bright House Networks agreed in 2011 to sell its advanced wireless services spectrum licenses to Verizon Wireless, of which Comcast expects its portion of the proceeds to be $2.3 billion.
Through majority-owned subsidiary Comcast Spectacor, the company owns Philadelphia's professional sports teams, the 76ers and the Flyers, as well as the Wells Fargo Center arena in that city. Comcast Spectacor 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.
One-third of Comcast's voting power is controlled by CEO Brian Roberts, son of founder and former chairman Ralph Roberts.