Comcast Corp. is a telecommunications conglomerate known for its broadband and cable services. Comcast operates Xfinity (a cable, internet, telephone, and wireless services company), Comcast Spectacor (a sports and entertainment company), NBCUniversal (a media and entertainment company), Sky (one of Europe’s leading media and entertainment companies), and more. The corporation first branched out from cable and broadband into entertainment when it acquired NBCUniversal in 2011.
Now, as streaming aggressively alters the in-home entertainment landscape, Comcast is looking to show it is a contender in the streaming business with an all-encompassing approach, bringing content and distribution under one roof.
Comcast Invests in Streaming Content
As an entertainment giant, Comcast stands to compete on two fronts: content creation and streaming distribution. The company is heavily promoting NBCUniversal’s Peacock streaming app, which launched last summer. Peacock, with 42 million sign-ups and 10 million paying subscribers, generates advertising revenue for Comcast. The service still has a long way to go, however, to catch up to streaming giant Netflix.
Comcast CEO Brian Roberts, who has a reputation as an aggressive dealmaker, has approved investments and new partnerships to tackle streaming programming creation. The company could also strike a merger to advance its streaming efforts similar to other big players in the streaming wars such as Amazon and The Walt Disney Company, though Comcast has not officially shared any merger or acquisition plans in this arena.
The Comcast Platform for Delivering Apps
On the distribution side of the streaming wars, Comcast puts streaming apps in homes via its Xfinity boxes and mobile apps. For example, Disney+ launched in November 2019 but wasn’t available through Xfinity until March 2021 when Disney and Comcast struck a distribution deal. Comcast’s competitors on this side of the business include Roku and Amazon. Reportedly, the company has considered a takeover of Roku.
To further its reach, Comcast is working with Walmart to create smart TVs running Comcast software. By investing in the Comcast platform for delivering apps, the company aims to move beyond the cable television landscape.
Critics Say Separate NBCUniversal
According to The Wall Street Journal, some industry analysts suggest Comcast would be better off if it separated NBCUniversal from its broadband business. Critics say Comcast’s cable operations and NBCUniversal do not have synergies between them because they operate on two different sides of the same coin (e.g., content creation versus content distribution).
In fact, it could be suggested the goals of these two are at odds. For example, NBCUniversal considered moving major NBC network dramas and reality television shows from cable to Peacock, causing internal tension.
For this reason, there is debate over whether or not Comcast is truly a conglomerate. As discussed in Chapter 15, a conglomerate merger results when two firms in unrelated industries merge. Since content creation and content distribution are connected, it may be suggested that Comcast is not a conglomerate.
The Future for Comcast
So-called cord-cutters have led to a steady decline in cable subscriptions. Despite this challenge, Comcast has proactively worked to transform itself from the inside out with its investments and acquisitions. The company is in a strong position largely due to its diverse product portfolio. A merger could propel Comcast’s streaming plans but would face intense antitrust scrutiny.
In the Classroom
This article can be used to discuss corporations and conglomerates, as seen in Chapter 4: Options for Organizing Business. This could also be used to discuss the distribution element of the marketing mix in Chapter 12: Dimensions of Marketing Strategy.
- What is a conglomerate?
- How could Comcast benefit from acquiring a smaller content creator or distributor?
- Why do some analysts suggest Comcast should separate NBCUniversal from its broadband business?
This article was developed with the support of Kelsey Reddick for and under the direction of O.C. Ferrell and Linda Ferrell.
Danielle Abril, "Comcast Has Big Streaming Dreams to Compete With Netflix and Disney," Fortune, June 23, 2021, https://fortune.com/2021/06/24/comcasts-big-streaming-dreams-netflix-disney/
Jonathan Berr, "Would Comcast Be Better Off Split Into Three Parts?," Forbes, July 26, 2019, https://www.forbes.com/sites/jonathanberr/2019/07/26/would-three-comcasts-be-better-than-one
Lillian Rizzo, "Inside Comcast’s Plan to Become a Streaming Giant," The Wall Street Journal, June 23, 2021, https://www.wsj.com/articles/comcasts-ceo-built-a-cable-giant-can-he-build-a-streaming-giant-11624473722