King of Cable Talks Future of the Industry

Brian Roberts, CEO of Comcast, the nation's largest cable provider, kicked off the national cable show with an exclusive interview with Media Money, his first TV interview in years.

He's optimistic about cable's ability to ride out the recession and determined to advance cable technology, making content more accessible from more places. Comcast rolled out a "triple play" offering in 2006, bundling cable, high-speed internet and voice data together. The company has 24.2 million cable customers, 14.9 million high-speed Internet customers and 6.5 million voice customers.

Roberts couldn't speak to specific numbers (the company is in a quiet period ahead of its earnings report), but when I asked him about the slowdown in subscriber growth, he said business "generally speaking is pretty darn solid," because there's no better deal than staying home in front of the tube. I'd argue that with more content available online than ever before, maybe the hundred bucks each month for cable is unnecessary. But Comcast, of course, also sells broadband connections, which are faster than ever, and people use them more than ever. And dont be fooled, TV viewing hasn't dropped off even as people spend more time online.

Analysts estimate that Comcast's programming costs should rise by ten percent this year, while other costs, like broadcast retransmission fees, are also growing. Roberts acknowledged that managing costs are a challenge, particularly in this environment. The company's increases have averaged around three to four percent, and it's never passed along a ten percent fee hike to cover its costs. Comcast is trying to retain consumers through price increases by offering flexibility. Without going a la carte, which wouldn't work for either the channels or Comcast, the company has to make customers feel like they have a range of choices, whether it's getting a discount by signing up for an additional service, or streamlining cable options.

There's a lot of debate about whether it makes sense to offer cable content online, with the biggest fear being that it will cannibalize cable subscriptions. Now Comcast, with "On Demand Online," and Time Warner Cable with "TV Everywhere," will allow cable customers to access cable shows, from channels they subscribe to, online. The idea is to give customers passwords to access the content online so they still have reason to pay their monthly cable bill.

Roberts says Comcast is working on "project infinity," designed to give consumers an infinity of options of where they watch content, on their laptop, cell phone etc. What's the business model? For now, Roberts says the key thing is getting the content to subscribers where they want it. Roberts points to the fact that 11 billion viewers have watched Comcast on demand on their TVs, which he says speaks to the interest in paid cable content in flexible formats.

When the cameras stopped rolling, Roberts and I kept talking. I asked him about Comcast's COO's comments in February when he said that the telcos compete with Comcast in about 22 percent of their markets, which seems like a decent size threat. Roberts isn't concerned, saying that if the telcos get 20 percent of their cable business in 20 percent of the markets, that's about four percent of the business at most.

And remember, Comcast isn't just a cable service provider, it also produces content, owning everything from E! Entertainment Telvision, the Golf Channel and ten Comcast SportsNet networks, to e-newsletter Daily Candy. In contrast just last week Time Warner Cable completed its spinoff from Time Warner. Roberts says that he doesn't understand why Time Warner would want to totally separate content and distribution. Comcast sees value in the combination — such as targeted distribution of regional sports networks. And he implied that the company is looking to grow its content business. With Time Warner Cable stepping back here, is there an opportunity for Comcast to find new synergies?

Questions? Comments?