Comcast Cable Boss Talks Regulatory Outlook, Digital Rivals, NBCUniversal Collaboration

Comcast feels good about the regulatory outlook in the U.S. and the success of collaboration between its cable business and content arm NBCUniversal, Neil Smit, president and CEO of Comcast Cable, said Monday.

In an appearance at Deutsche Bank’s 25th Annual Media & Telecom Conference in Palm Beach, Fla., which was webcast, he was also asked about the impact of previously launched or planned over-the-top, or streaming, services from the likes of AT&T/DirecTV, Sony, Google/YouTube and Hulu. He said that Comcast’s X1 video platform is “very competitive” with OTT offerings, lauding the increased amount of content offered and “unprecedented quality of service,” while some OTT services have had early technology problems.

“We know how to compete,” said Smit, adding: “The value of the bundle is a wonderful thing.”

Asked about the likely impact of president Donald Trump and his administration and new FCC Chairman Ajit Pai, Smit said “tax reform will be very beneficial to us.”

On net neutrality, he said “we have always believed in a free and open Internet,” but the current title 2 regulation, which Pai has criticized, was not the “right way.”

Smit on Monday also lauded Symphony, the cross-promotion efforts between Comcast and NBCUniversal, saying he and NBCU CEO Steve Burke talk at least once a week. “The most obvious synergy was the Olympics,” he said, also citing electronic sell-through to allow consumers to buy films via remote controls and full season stacking of TV shows as key successes.

Highlighting Comcast Cable’s strongest subscriber growth in years, NBC’s ratings momentum, Universal’s continued strong film profits and growth at the theme parks business, Smit said: “I don’t think it’s any coincidence that both businesses [Comcast Cable and NBCUniversal] are performing at such a high level. I think it’s due to the fact that we are integrated, we do work closely together, and I think ’17 is going to be another continued year of success.” 

Analysts have been lauding improved subscriber momentum at big cable operators as of late amid ongoing concerns about cord cutting, which has seen some consumers end their pay TV subscriptions. That has affected the businesses of TV distributors and network operators. Comcast added 80,000 video customers in the fourth quarter, down from 89,000 in the year-ago period. But for the full year 2016, it grew its pay TV subscribers for the first time in a decade. The company added 161,000 video subscribers last year, compared with a 2015 decline of 36,000. Smit on Monday also said he sees further opportunity for continued growth in broadband subscribers. 

Discussing the continued rise in programming costs, Smit on Monday said he doesn’t expect that to change given this is driven by sports and retransmission fees. But he said Comcast is looking to manage its other costs smartly, with its profit margins getting help from broadband and business services and other high-margin businesses.

Asked about Comcast’s wireless strategy, Smit reiterated services will launch later this year under a deal with Verizon. He said the company wants to provide a good value proposition to consumers and run a profitable business, which is something it expects to reach within a fairly short time period. The wireless services can help Comcast reduce its subscriber churn, he added. And Smit emphasized that Comcast will sell wireless within its service bundle with an initial focus on existing subscribers.  

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