Why Comcast Corporation's Video Trends Remind Me of Global Warming

The good news in Comcast's video subscriber trends are like a cold week during a hundred years of global warming.

Jan 28, 2014 at 8:00PM

Comcast (NASDAQ:CMCSA) added 43,000 video customers in the just-reported fourth quarter. And don't forget that Verizon (NYSE:VZ) snagged 92,000 fresh FiOS video subscribers in the same quarter.

Netflix (NASDAQ:NFLX) can take its Internet-based video and go home -- it's the end of cord-cutting as we know it, and the cable industry feels fine!

... Right?

Well, it's a little early to declare a sustainable victory for cable and satellite providers. For one, the bulk of the industry will report their results over the next three weeks, leaving plenty of room for industrywide surprises. Comcast's gains might be local to that company alone. We'll get back to Verizon's situation in a moment.


This picture was taken amid a hundred years of global warming. Crazy, right?

Then, the fourth quarter is one of the seasonal high points in this industry, like so many others. This was Comcast's first quarter of positive video trends since 2007, but adding a few subscribers in what's traditionally your strongest season doesn't mean that the long-term trends have turned. It's more like rejecting the scientific reality of global warming because, you know, it was cold last week.

Indeed, Comcast's positive fourth quarter could not overcome nine months of steady bleeding and the largest cable provider ended 2013 with 300,000 fewer video customers, year over year. This was Comcast's fifth straight year of annual video subscriber losses.

Don't cry for Comcast, because the company is adding bucketloads of new accounts to its broadband Internet and digital voice packages. The triple-play package is alive and kicking. Converting plain TV subscribers to triple-play customers is a key part of Comcast's growth strategy.

In fact, Netflix can't do its video magic without help from the Comcasts and Verizons of the world. Take the two macro trends of growing online video and fewer cable subscribers to their logical conclusion, and you'll get the cable guys simply providing the broadband pipe for the real kings on digital video.

This is why Verizon stands apart. FiOS video is actually a broadband service too, as every frame of your cable TV viewing is delivered as bog-standard Internet traffic via the FiOS fiber link, then decoded by your set-top box. Turning this into an ISP-agnostic service would not be difficult, and Verizon is probably working on something like that behind the scenes.

So Netflix isn't exactly on the run in Comcast's territories. Cords are still being cut in general, despite this single-quarter anecdote. If the company wants to be anything other than a simple Internet pipe for Netflix and HBO Go in the next era of home entertainment, Comcast needs to come up with a digital content plan of its own -- and then beat the early leaders at their own game.

Good luck with that. This is why I own shares of Netflix, but not Comcast.

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Anders Bylund owns shares of Netflix. The Motley Fool recommends and owns shares of Netflix. Try any of our Foolish newsletter services free for 30 days.

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4 in 5 Americans Are Ignoring Buffett's Warning

Don't be one of them.

Jun 12, 2015 at 5:01PM

Admitting fear is difficult.

So you can imagine how shocked I was to find out Warren Buffett recently told a select number of investors about the cutting-edge technology that's keeping him awake at night.

This past May, The Motley Fool sent 8 of its best stock analysts to Omaha, Nebraska to attend the Berkshire Hathaway annual shareholder meeting. CEO Warren Buffett and Vice Chairman Charlie Munger fielded questions for nearly 6 hours.
The catch was: Attendees weren't allowed to record any of it. No audio. No video. 

Our team of analysts wrote down every single word Buffett and Munger uttered. Over 16,000 words. But only two words stood out to me as I read the detailed transcript of the event: "Real threat."

That's how Buffett responded when asked about this emerging market that is already expected to be worth more than $2 trillion in the U.S. alone. Google has already put some of its best engineers behind the technology powering this trend. 

The amazing thing is, while Buffett may be nervous, the rest of us can invest in this new industry BEFORE the old money realizes what hit them.

KPMG advises we're "on the cusp of revolutionary change" coming much "sooner than you think."

Even one legendary MIT professor had to recant his position that the technology was "beyond the capability of computer science." (He recently confessed to The Wall Street Journal that he's now a believer and amazed "how quickly this technology caught on.")

Yet according to one J.D. Power and Associates survey, only 1 in 5 Americans are even interested in this technology, much less ready to invest in it. Needless to say, you haven't missed your window of opportunity. 

Think about how many amazing technologies you've watched soar to new heights while you kick yourself thinking, "I knew about that technology before everyone was talking about it, but I just sat on my hands." 

Don't let that happen again. This time, it should be your family telling you, "I can't believe you knew about and invested in that technology so early on."

That's why I hope you take just a few minutes to access the exclusive research our team of analysts has put together on this industry and the one stock positioned to capitalize on this major shift.

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David Hanson owns shares of Berkshire Hathaway and American Express. The Motley Fool recommends and owns shares of Berkshire Hathaway, Google, and Coca-Cola.We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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