Sunday, August 08, 2004

Comcast's next moves Comcast's aborted attempt to buy out Disney is not slowing down the cable giant, according to a story in the New York Times ("("The Poker Player," 8/8/2004). Already heads above its rivals, Comcast is continuing organic growth in several ways. Its ad rates are up by double digits, far outdistancing those of other cable systems. It's getting an increasing number of users to sign up for high-speed digital cable and on-demand television. It keeps adding high-speed Internet users. It will soon get its VOIP services online (though it is lagging behind rivals Time Warner and Cox). And it is using its clout to get favorable rates and terms when negotiating with cable network suppliers. Comcast, the article points out, owns substantial shares in many of its cable rivals, a share it kept when it acquirer AT&T Cable a few years ago. It owns a small piece of Time Warner Cable (around 5%), 50% of Insight Communications, a piece of Adelphia (4%) and shares in smaller players Mid-Continent and US Cable. But there are threats. Phone and satellite services are teaming up to offer competitive packages to supply phone, cable, and Internet services. But Comcast is aggressively offering more and more new services to its customers. The next big thing in the near future is the sell-off of fraud-plagued, bankrupt Adelphia Communications., the #5 cable company. At this point, the two biggest contenders are Comcast and Time Warner Cable. Possible rivals Charter (#3) and Cox Communications (#4) are in the process of going private, so they have little cash for an acquisition. The thinking is Comcast wins even if Time Warner beats them out, since it might trade its share of Time Warner in return for the ability to pluck off some key regions in the Adelphia network (such as Miami or Los Angeles). The other big thrust for Comcast is programming. It already owns a raft of cable channels: E!, G4, CN8, Outdoor Life, the Golf Channel, Style Network, and a number of regional sports networks. It's planning to continue to introduce new programming, including a kid's network. Since it is the gatekeeper for many of the nation's television sets, any network it chooses to back is guaranteed a chance. As Disney's fortunes continue to fade, Comcast may well be in the position of bidding for it again in a few years, for a much lower price.                        Top ten cable companies  Cable Company Subscribers Comcast Cable 21.5 million Time Warner Cable 10.9 million Charter Communicationa 6.4 million Cox Communications 6.3 million Adelphia 5.5 million Cablevision Systems 2.9 million Bright House Networks 2.2 million Mediacom Communications 1.5 million Insight Communications 1.3 million Cable One 0.7 million Source: New York Times 2:01:18 PM

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