February 26, 2019
Comcast’s NBC Universal is set to launch an ad-supported over-the-top video service in 2020, targeting existing pay-TV subscribers as well as standalone consumers.
Or is it?
The launch was put into question after Comcast CEO Brian Roberts appeared to punt when asked about a specific timeframe for the OTT video service’s availability.
Speaking Feb. 26 at the Morgan Stanley technology, media & telecom confab in San Francisco, Roberts said a date remained in the works.
“We’ll refine it as we go along,” he said. “We’re all in to create it and not be like Netflix. We’ll launch when it’s ready.”
Roberts said the service gives NBC Universal – which will manage the platform – the opportunity to deliver “smart ads” to new consumers, while enabling current pay-TV distributors the ability to “give more value” to their video customers – for free.
“What can we do that consumers will like and creates value for our shareholders?” Robert said.
Comcast has long eschewed OTT video, arguing its legacy cable service and Xfinity X1 set-top box offer superior content and access options.
Declaring that Comcast, which acquired U.K. satellite TV operator Sky last year, sits on “an awful lot of content,” Roberts said some programming would be better monetized through AVOD, while other shows would be more suited to third-party platforms.
“We produce or purchase $24 billion worth of content (entertainment and sports) across the globe,” he said.
The executive said that remaining loyal to traditional distribution has contributed to NBC Universal tripling pre-tax earnings since Comcast acquired the company from GE in 2009.
“We don’t have the mindset to take it off all these existing distribution platforms, including HBO, pay-TV and broadcast TV,” Roberts said.
Following Comcast’s $39 billion acquisition of Sky, which operates business units in the U.K., Germany and Italy, the media company represents 15% of the global broadband and video market, while generating about 50% of the world’s broadband and video revenue, according to Roberts.
He said Comcast and Sky represent 4% of global broadband/video consumers and 12% of the revenue, which increases to 25% in the U.K.
“They are clearly the markets you want to operate in,” Roberts said. “We are growing our market share. I don’t think anybody has the scale we have and market opportunity.”
Indeed, high-speed Internet has become the company’s most-profitable business unit, with annual growth exceeding 10%.
5G More Hype than Bite
Roberts shrugged off 5G wireless industry chatter, likening the next-generation mobile technology similar to hype surrounding Google Fiber, which launched to much fanfare in 2010, and was scaled back by Google in 2016 due to rollout costs.
The CEO questioned whether 5G could be cheaper than fiber or coaxial.
“The answer is absolutely not,” Roberts said. “At least not in our judgement. It’s much more expensive.”
Comcast’s broadband subscribers use 100 times more data than the average mobile user, according to Roberts.
“They’re hoping to get to the speeds we have today,” he said. “And by the time they do, we’re hoping to be 10 times faster with wired.
“5G is one of these moments. We know it’s coming, what its implications will be, [and] we have people staying on top it.”
Finally, Roberts lauded Universal Pictures’ Best Picture Oscar for Green Book and weekend box office win for How to Train Your Dragon: The Hidden World.
“I don’t think that’s happened very often in Hollywood where you do both on the same weekend,” he said.