Comcast CEO Brian Roberts is publicly admitting they have a problem — that’s good news, and it is the first step in the right direction
Over the past decade or two, I have been warning Comcast Xfinity leadership that they have a problem. In fact, the entire cable TV industry, including Charter Spectrum, Altice, Cox, and all the smaller companies, do as well. Comcast temporarily slowed the loss with new services like broadband, wireless, and acquisitions like NBC Universal, but the original problem was never fixed, and loss continues to grow like a festering wound.
Suddenly, Comcast CEO Brian Roberts is publicly admitting they have a problem. That’s good news. It’s the first step in the right direction I have seen in quite a long time. After all, you can’t solve a problem unless you recognize it.
However, their plan to attack and resolve this problem and reverse the losses is still unclear. Comcast has weathered the storm year after year for quiet a long time. Will that continue, or does something transformative need to happen first?
Comcast Xfinity is a good company run by good people, but they must fix this problem
Over the years, I have talked with the senior-level industry executives about my thoughts on the growth plans and actions, both good and bad.
My takeaway is Comcast Xfinigy is a good company run by good people. However, in my opinion their method of attack needs to be updated. This is for Comcast and in fact for the entire cable TV industry.
As I have been saying for so long, the cable TV business model is broken. In the early years, they had no competition. There was just one cable TV company in each geographic sector. There was no competitive threat to worry about.
As a result, the company didn’t have to care about the customer. Only the investor. In those early days they had no risk of losing in a competitive battle. So, they never sharpened their customer relations skills.
The problem is that the cable TV industry is a three-part structure, compared to a typical two-part business. There is the customer, then the cable TV company, then the channels or content companies. Content companies did not interact with the customer, so they didn’t care if the customer was overcharged. That was a problem for Comcast and other cable TV providers to worry about.
Over time, as competition and new technology started to enter the picture a decade or two or three ago, things started to radically change.
Comcast admits they did not take care of customers in TV commercials
A decade ago, Comcast even ran some TV commercials saying they knew they didn’t take care of the customer in the past, but things would be different going forward.
The good news is that Comcast did improve. However, the bad news is that the customer was burned for so long; they had no emotional connection to the company. Compare this to Apple, which has customers who love it. Even though Comcast wanted that, it was not the world they created.
So, the path of new competition and new technologies targeting the cable TV companies continued to advance.
Cable TV used to be affordable
The price Comcast charged has also grown too high. They continued to update their packages on a regular basis, forcing customers to buy more packages and spend more money just to watch their favorite channels.
In the beginning, cable TV was inexpensive. They charged roughly $15 per month for a handful of channels. Then, year by year they added more channels and charged the customer more.
Today, the customer gets hundreds of channels, plus broadband and pays hundreds of dollars per month, yet they still only watch their handful of their favorites. This model drove the customer away. Now, the cable TV industry is paying the price.
Can Comcast Xfinity and the larger cable TV industry recover?
So, the question today is simple. Can Comcast recover? Can they separate the slower-growing sectors like cable TV and broadband from the faster-growing ones like wireless? This is a question investors, customers, and workers are asking today.
Wireless carriers like AT&T Wireless, T-Mobile and Verizon Wireless are even starting to offer wireless broadband using FWA technology. This may indeed have a longer term negative impact on cable TV companies.
AT&T, T-Mobile, Verizon are competing with wireless broadband
Wireless broadband is the next big problem for cable TV companies. Competitors offer a less expensive broadband service. This is attracting plenty of customers who want to switch over. What’s the cable TV strategy to protect their broadband business? Will they be able to compete, or will they lose broadband like they lost pay TV?
There is a DOCSIS based solution. I have met with the CEOs of some of these young and smaller companies. Has the cable TV industry moved in this direction yet?
Brian Roberts CEO of Comcast faces serious questions and challenges
These are plenty of important and immediate questions and Brian Roberts has some serious decisions to make. Decisions they should have made a decade or two ago. Changes in the products and services. Changes to delight and wow the customer.
Their mistake was that they should have led the charge to change, and not tried to slow it down and hold it back. That can only be done for so long, and that’s what I warned about over time. So, can Comcast and the entire cable TV industry find a way to save itself?
As an industry analyst, I will be following Comcast during this journey
As an Industry Analyst, I will be watching and commenting on what they do next. To see what they will become. Will they be a leader over the next decade? Or will they will continue to struggle?
There is plenty of potential. Comcast is a good company. Roberts and the Comcast team are good people. But that alone is not enough. It all depends what they do next at this critical moment in their history.
A solution requires something they have never really shown much of before. Things like innovation, customer care, lower pricing and winning the minds and hearts of the marketplace, both customers, on the business and consumer side, and of course, the investors.
Here is hoping Comcast Xfinity, Charter Spectrum, Altice, Cox, and all the others can ultimately pull it off this time around.
