Lhn5, the article below is from Feb 2006, but the points made by CEO Roberts in it remain highly plausible ones, IMO, and consistent with some of the points I set out to list for you earlier.
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Comcast CEO Berates Verizon's FiOS
Anthony Crupi | FEBRUARY 08, 2006
72.14.205.104
Comcast chairman and CEO Brian Roberts said Wednesday that Wall Street's myopic regard for the Baby Bells and their plans to offer video service is unduly wearing down the cable giant's share price.
Speaking at the McGraw-Hill media summit in New York, Roberts said that the focus on Verizon in particular is unfortunate, given that FiOS, the telco's fiber-optic video service, "does not show any economic promise."
The economies of scale just aren't there for Verizon, said Roberts, who pointed out that "in the last 10 years, it has not gotten cheaper to string fiber optic [cable] to the home." Ultimately, Roberts predicted that Verizon would wind up "spending gobs of money to be the fourth video provider in the market."
hat a company with little or no experience in the business would vie to enter the video market today behind the incumbents also strikes Roberts as a curiosity, especially since the telcos have such a cash cow in wireless. "Why take all that good, hard-earned money and put it back in video, where 30 cents of every dollar goes right back into programming?" Roberts asked.
The Comcast chief said that Wall Street's infatuation with Verizon is particularly counterintuitive, given that Comcast and other top-flight MSOs have been reaping the rewards of a completed digital plant build-out for years now. Roberts estimated that "70 to 80 percent of our CAPEX is success-based," given that the completed upgrade allows Comcast to offer a wealth of services, including interactive video, telephony and high-speed Internet.
And yet, even though Comcast was able to add 2.5 million new revenue generating units in 2005--a number it hopes to boost to 3.5 million this year--Wall Street has still beat up on the company's stock. Comcast's share price fell nearly 20 percent last year and is presently trading near its 52-week low.
Meanwhile, Comcast will continue to rustle up the 60 percent of its subscriber base that have not shown a desire to switch to digital. Roberts said the MSO is getting closer to offering analog customers an unobtrusive, sub-$100 digital converter that will allow even the lowest-end subs the ability to access video-on-demand programming.
The company is also getting ready to introduce a $99 triple-play bundle of voice, video and data in its New England system.
On the content side, Roberts said that Comcast will continue to build up its networks, which include E! Entertainment Television, Style Network, the Golf Channel and OLN. When asked about how the latter network will go forward with its plan to reinvent itself as a sports property after losing out on the eight-game National Football League package, Roberts said OLN would still look for other league deals "that make sense."
A pact with Major League Baseball may be in the offing, although Roberts sidestepped speculation about an acquisition, saying, "We haven't had any baseball in the past. It's possible, but no comment."
Nor did Roberts confirm that a standalone channel devoted to MGM movies might be on the horizon. In 2004, Comcast was also a partner in the Sony-lead consortium that bought MGM; thus far, hundreds of the studio's library titles have appeared on the MSO's movies-on-demand service.
Before leaving the McGraw-Hill building, Roberts heaped praise on Time Warner CEO Richard Parsons, calling the embattled media chief "a terrific, quality person" and asserting that any "well-run company that can push synergies ... has a reason to be together."
That comment can be seen as a reaction to activist Time Warner shareholder Carl Icahn, who yesterday presented a plan to break-up the company into four separate entities, including one for Time Warner Cable. Roberts singled out the performance of the cable unit, saying it "has done an outstanding job."
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