Comcast's Long-Time Diversification Strategy Up To The Test?

Remember back in the 1980s, 1990s and early 2000s when traditional media companies were looking to diversify -- expanding out of movie studios and traditional broadcast TV networks to buying cable networks, radio stations, video-game businesses, book publishers, and even DVD rental companies? (Hello, Blockbuster Video)..

Now we have Comcast as one of the few remaining companies in this diversified mode. 

Growing out of its core cable TV system business of TV networks, Comcast has added broadband, wireless, mobile, and ownership of TV network/movie studio company NBCUniversal.

Initially it was tough sledding after starting up  the purchase of NBCUniversal in 2009, obtaining full ownership in 2013.

There were some synergy and cost issues. But the company figured it out all the while Comcast was growing its broadband business to complement its video business, which showed signs of weakening.



AT&T must have been very envious over the performance -- because of its tough history in owning and selling off cable systems, DirecTV (a satellite pay TV provider) and lastly Warner Bros. Media.

Yet now Comcast seems to be hitting a wall. After ongoing subscriber loss, now broadband is beginning to see a decline in subscribers -- although revenues keep growing as ARPU (average revenue per user) climbs, up 4.2% to $73.92 per month. 

On top of this, NBCUniversal is still a work in progress when it comes to Peacock, which continues to endure nagging losses. In the first quarter, EBITDA losses were at $639 million, which is still at the same level -- more or less since the fourth quarter 2022 ($614 million).

Craig Moffett, co-founder, principal at MoffettNathanson Research, reflects on Comcast's long-time position of perhaps being the last of a dying breed.

He recently wrote: “Comcast’s diversification wouldn't be helpful if the businesses that are currently out of favor continue to struggle forever. But if Comcast believes -- as we do -- that the outlook is better than the market perceives, their diversification can provide a welcome balance while they wait.”

Moffett believes Comcast will that somehow things will change -- for one that competitive pressure on its broadband business has peaked, that the business could re-accelerate.

But about more losses coming and linear, legacy TV networks in trouble, as well as some lingering questions about its European pay TV Sky business.

Laurel Rossi, chief revenue officer at Infillion, says the company's plan is to bring new options to the programmatic marketplace through the relaunch of MediaMath technology will support the fastest-growing sector in advertising: retail media.

All these are more test races to observe from the stands.

Good news: Comcast has a track record. 

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