Acquisitions galoreA family-owned business, Comcast began with a single cable television franchise in 1963; today it has more than 8 million subscribers, making it the third-largest cable operators in the United States. Diversification is currently an industry buzzword, but Comcast has long focused on expanding its business lines. In the late 1980s, Comcast acquired the American Cellular Network, and thanks to later acquisitions, the company is now a major player in the cellular service industry. Comcast also purchased a controlling stake in QVC, the cable shopping channel, and provides some telephone services. The company even owns a controlling interest in the NBA's Philadelphia 76ers and the NHL's Philadelphia Flyers.
Cable ready
Recently, Comcast has begun to devote more attention to investing in and developing cable content. In 1995, the company formed its C3 division (Comcast Content and Communication) to create new cable programming and plan ventures related to software and cyberspace. The company already owns 79 percent of E! Television with Disney. Comcast is also betting that cable will be the wave of the future for the Internet and that its diverse product line will enable it to sell product bundles, multiple telephone lines, and Internet service packages to customers. The company recently received a $1 billion capital infusion from Microsoft to help the software giant build new services for TVs and PCs.
The return of the bartering system
In March 1999, Comcast jumped on the cable consolidation bandwagon and announced a merger with rival MediaOne Group Inc., in an all-stock deal worth $48.63 billion. But in early May, MediaOne recieved a more lucrative offer from AT&T Corp. and terminated its merger agreement with Comcast. Comcast settled for a trade of its cable systems with those of AT&T instead. The May 1999 settlement granted Comcast control of Lenfest, the major cable system in Philadelphia, as well as all Washington-based cable systems except Fairfax County's. In November 1999 Comcast bought Lenfest outright for $5.21 billion in stock. Through the trades and acquisitions, Comcast gained 1 million cable subscribers, the ability to provide multiple services (Internet, cable, and local and long-distance telephone) to households, and status as the third-largest cable company in the nation. The trade of cable systems further allowed Comcast to cluster its systems while broadening its range of service. Both AT&T and Comcast hoped to expand their broadband services, including interactive video and high speed data connections, by merging with MediaOne. Comcast continued to swap cable systems in 1999 to strengthen its presence in the Mid-Atlantic area. Through its agreement with Adelphia Communications, Comcast gained approximately 4 million customers between the states of New Jersey and Washington, DC. Also, with its 1999 acquisiton of Greater Philadelphia Cablevision Inc., Comcast was able to expand its market share in the Philadephia area.
Technology leaders
Comcast is constantly trying to increase its broadband technology. In coalition with WorldGate Communications Inc., Comcast in fall 1999 launched WorldGate, a service offering Internet access, e-mail, and channel hyperlinking to television-related web sites, in Philadelphia cable systems. Hyperlinking will allow television viewers to link to related web sites of television programs while actually viewing a particular program. Comcast is also the first North American cable company to announce its intention to deliver interactive television services to its customers through software developed by Liberate Technologies, called Liberate TV Navigator.
Keeping pace
In an effort to keep the two cable TV giants -- AT&T and AOL-Time Warner -- within its sights, Comcast is upping its commitment to fiber-optic technology. Beginning with high-speed internet connections and digital TV, Comcast hopes to unveil telephone service, video-on-demand, and interactive TV using the Internet, all in the next two years. Currently Comcast has 85 percent of its cable network wired with fiber-optic cable. Digital TV is proving to be a lucrative business for Comcast as it already has over 770,000 subscribers.
Other revenue sources
Comcast is a company with rising revenues, as a result of a wide range of holdings and investments. Its controlling share of the QVC shopping channel brought the company $540 million in cash in 1999. It has also made venture capital investments in companies such as Internet Capital Group, VerticalNet, and Excite@Home. However, according to Stephen Burke, Comcast's president, "We plan on being very aggressive on the commercial side of the business," Burke said. "We're betting our company on this future." To that end, Comcast is unveiling T1 fiber-optic lines that are much cheaper compared to regular T1 lines. These new lines are being marketed to small and medium size businesses, with trials currently running in the Detroit area.
