Wednesday, January 27, 2021

COMCAST AND THE CANNIBLIZATION PROBLEM

October 23, 2014 by · 1 Comment 

If consumers can stream CBS and HBO shows — and perhaps shows from other networks in the future — to their smartphones, tablets and Internet-connected TV sets, is there any reason for them to continue to subscribe to more expensive pay-TV "bundles?" On Wednesday, during a conference call with analysts, Comcast executives expressed confidence that they will, if the networks are circumspect. NBCUniversal chief Steve Burke maintained that "both HBO and CBS are trying to add to their existing ecosystem … without cannibalizing" their existing "high margin" customers." Doing so, he conceded will be a "challenge." The challenge for the networks, he said, is "trying to reach millennials … that’s what we all are trying to do." He then added, "It will be interesting to see how that works." He appeared to acknowledge that so far, the addition of video sites to the competitive arena has worked well for Comcast. "It’s surprising to me that we’re making hundreds of millions of dollars from Hulu and Netflix and Amazon, businesses that we didn’t even think about five years ago," he said. In his opening remarks, Comcast Chairman Brian Roberts underscored Burke’s comments. "We understand content company attempts to look for new ways to grow their businesses," he said.