Tagged: Comcast

Do we even have to say that Comcast’s Netflix competitor will probably suck?

Comcast is in the middle of an acquisition of Sky, the largest pay TV operator in the UK and a crown jewel in the Murdoch family’s 21st Century Fox entertainment network. If all goes to plan, Comcast (which, remember, already owns NBCUniversal) would pay $31 billion to acquire Sky, which includes a satellite TV business, a streaming TV service, an enviable content library, and broadcast rights to some of the most important European sports.

So it’s no surprise that one analyst thinks the deal would lay the groundwork for Comcast to offer its own worldwide Netflix competitor, using a mix of NBC and Sky’s original content, plus all the live TV broadcast rights they already have in place. But before you get all excited, just remember: This is Comcast we’re talking about here.

“Sky brings with it a trove of exclusive content and rights that could be the basis of an OTT service with a genuine moat, capable of rivaling Netflix itself,” analyst Craig Moffett said in a recent research note seen by DSL Reports.

Buying Sky would “give Comcast the heft and the programming muscle to create a pan-European, or even global, direct-to-consumer OTT service,” the note said, although Moffett isn’t certain what the resulting streaming service would look like. “There are a great many assumptions required if Comcast’s presumed strategy is to succeed. Running the table on all of them is a rather uncertain outcome, and demands what some might read as rather accommodating business decisions from some rather deep-pocketed competitors. … What is at issue here isn’t just whether the global or pan-European OTT war is a war that Comcast can win. It is also whether it is a war worth winning.”

Netflix’s recent growth has been driven by two things that Comcast would struggle to replicate: scale, and exclusive content. Netflix has been able to negotiate rights to content on a global scale, which has helped it rapidly expand to nearly every country in the world. That’s become even easier as Netflix has invested in its own original programming, meaning that Netflix is the exclusive distributor, and it doesn’t have to negotiate a separate distribution deal for every program for each country.

NBC and Sky’s programming, on the other hand, is centered around more traditional pay TV content like topical entertainment, news, and sports. Those are more regionally focused and much harder to scale across the globe, making a true Netflix competitor far less likely.

Nonetheless, a successful acquisition of Sky could easily accelerate Comcast’s own rollout of an over-the-top streaming video service. Sky has a mature and well-tested streaming platform called Now TV, and using that technology for a US-based product could help Comcast launch a streaming service in the near future, just in time to compete with everyone else.

T-Mobile calls Comcast ‘irrelevant’ and ‘incompetent,’ but the results disagree

In May last year, Comcast launched Xfinity Mobile, a wireless service that runs on Verizon’s network. Although the cell plans were never designed for widespread appeal, as only Comcast cable or internet subscribers can sign up, Xfinity Mobile has nonetheless got off to a flying start.

In the seven months Xfinity Mobile has been available, the company has signed up 380,000 new customers. Considering the limits on subscribers — and the fact that Xfinity Mobile has mostly steered clear of they typical blockbuster deals networks offer to attract new customers — that’s an impressive start.

Analysts are certainly taking note. In a blog post, Walter Piecyk of BTIG said that “Comcast’s early wireless subscriber growth is certainly impressive,” although he also noted that it’s too early to call the results “conclusive.” In a best-case scenario, Piecyk sees Comcast adding a million subscribers in 2018, and Charter’s soon-to-be-launched service could scoop up another 500,000 to 750,000 subscribers. Those numbers represent a significant chunk of the 3 million post-paid lines that the industry adds per year.

But for the time being, the established players don’t seem to be worried. On T-Mobile’s earnings call last week, CEO John Legere had some choice words for the cable industry, as we’ve come to expect. “[Xfinity Mobile] is very irrelevant, and I would assume Charter will be irrelevant squared,” Legere said. “I would say the furthest thing from my mind is any concern about the impact of cable.”

“First of all, I think they’re incompetent and they don’t belong in wireless without having owner economics. 500 stores across the country, telling people in Manhattan your closest store is in Long Island is crazy. An MVNO that doesn’t work. Wi-Fi is not a way to play this game. And I think from a standpoint of their impact, I think their impact will be to grab customers sideways from the other big model. And so I mean, I think Verizon and Comcast are going to try to pick each other’s pockets. I mean, I think Verizon’s enthusiasm about doing their 5G tablet calls on at the Super Bowl are that they’re praying to have some sort of broadband access capability to the home to compete with a Comcast. So that — no, I don’t see any impact to us at all.”

Legere’s setting the stage for a fight between T-Mobile and the cable companies, two industries that are set to compete far more than usual in the coming years. Thanks to its expensive acquisition of Layer 3 last year, T-Mobile plans to launch an all-new TV service later this year, and during the initial announcement, Legere specifically called out big cable as T-Mobile’s next target.

The coming transition to 5G will also bring T-Mobile into increasing conflict with cable companies. Although T-Mobile has repeatedly said that it will roll out mobile 5G first, the faster speeds and higher capacity of a 5G network mean that for the first time, wireless internet will become a real rival to home broadband.