Picking the annual MSO of the Year can be a tough decision.
Not this time.
Comcast’s audacious move to buy Time Warner Cable shocked everyone who thought its against-all-odds acquisition of NBCU in 2011 was the “war to end all wars” in terms of the MSO’s merger ambitions. And while the TWC deal could still get blocked, the conventional wisdom is that Comcast will satisfy the powers in Washington and get it done, cementing its role as the undisputed Grand Poobah of Cable, Media and Entertainment. That is, after a hard slog toward approval. “A lot of the work right now is just data collection, and there’s a lot of it,” says Comcast Cable CEO Neil Smit. “I think that there are great things that both companies bring to the table, and our objective is to drive great products and more content, and to get the best of both companies in terms of technical capabilities to market as soon as possible.”
Of course, not everyone’s a fan of all this consolidation. Consumer groups oppose the deal. And even some big programmers grumble about it privately. But here’s the simple truth: The cable industry would likely be behind several of its competitors in technology and overall innovation if it wasn’t for Comcast’s strong leadership role. And more and more these days, that leadership hinges on the kind of scale that can defeat telco, satellite and dot-com foes. “Everybody’s getting into the video space, so we’ve got to provide the best experience,” says Smit. “We have a lot of content. We’ve got to figure out how to make it easier for consumers to access that content and enjoy the whole discovery process of getting the content they want.”
The company makes a difference, not only in terms of its products and efforts to improve the customer experience, but in everything it does to educate policymakers nationwide about cable’s important role in U.S. society. Whether it’s better set-top navigation, faster broadband, improved customer service or simply good corporate citizenship with its Internet Essentials program, Comcast is an example to the rest of the industry. Some would point out some of this stems from earlier NBCU merger conditions, but the end result has been a stronger innovation platform for the entire industry. And that has lifted all boats, even if some have been thrust onto choppy seas (or even rocky shores) along the way.
Comcast’s tech leadership is particularly stellar; In 2013 alone, the MSO managed 184 new software releases and 41 new products in Xfnity video, home, broadband and communications. “With cloud-enabled IP technology, we can innovate and improve the customer experience faster than ever,” notes Comcast Cable EVP/CTO Tony Werner. That includes partnering with others like Twitter, Apple and Microsoft “to help deliver more innovative and personalized experiences,” adds Chief Business Development Of cer Sam Schwartz. Says EVP, Consumer Services Marcien Jenckes, “we set the bar high with X1 and in the past few months alone, we have launched cloud DVR and a new digital store, invented new Xfnity apps for Apple and Android and increased our internet speeds to stay ahead of consumer demand,” he says.
It’s about leveraging the NBCU asset, something that Comcast will only accelerate when and if it takes over TWC’s NYC and L.A. markets—the two largest and most important media markets in the U.S. As SVP, strategic integration Maggie Suniewick notes, “we are leveraging resources across both NBCUniversal and Comcast to promote our products and services and to drive results. It’s an effective and efficient way for us to align all the brands in a way that benefits customers and the business.”
But in the end, Smit says it’s all about execution. “We have to keep pushing the out ow in terms of what we can do with our network and our content and our capabilities. But at the same time, it all comes down to day-to-day execution. Are we taking care of the customers? Without that, you don’t have the luxury of innovating.”
Comcast expects to divest some 3 million subscribers as part of its deal with TWC, leaving it with 30 million subscribers if the deal is approved.
Comcast has committed to spending “hundreds of millions of dollars” annually to improve Time Warner Cable’s networks.
The MSO expects run-rate efficiencies of $1.5 billion in operating expenditures and $400 million in capital expenditures after completing the TWC deal.