While Comcast (CMCSA 0.78%) is already a conglomerate diversified across broadband, cable, movies, amusement parks, and other areas, management isn't slowing down in cultivating new businesses.
Comcast's core cable business is currently in flux as over-the-top internet streaming has disrupted the traditional cable bundle and the movement toward highly targeted digital advertising has taken advertising market share away from traditional ad-supported TV. To meet these changes, Comcast has made a number of moves.
In addition to purchasing British cable provider Sky plc from Twenty-First Century Fox last year, Comcast plans to launch its own over-the-top streaming service next year and recently unveiled a smart-home device that functions as a hub for both internet streaming and the connected home.
Not slowing down one bit, Comcast also just unveiled a new venture in e-commerce, crossing the threshold from merely selling ads to the direct selling of goods. The cable giant isn't exactly about to take down Amazon (AMZN 1.40%) or Walmart (WMT +0.09%). It's starting with a small, specific niche: golf.
Comcast unveils a new golf e-commerce marketplace. Image source: shopwithgolf.com.
Golf swag by Bill Murray and others
Comcast owns both The Golf Channel and NBC Sports, which televises many of golf's major tournaments. Comcast recently unveiled Shop With Golf, an e-commerce marketplace that will feature more than 30 apparel brands, including William Murray Golf, a brand started by actor Bill Murray and his brothers. In fact, the company has enlisted Murray to star in a series of upcoming commercials and even this, uh, "music video" to promote the new marketplace. The site will be associated with the company's Golf Channel, which merged with NBC Sports when Comcast bought NBC Universal in 2011.
The idea is to seamlessly link potential shoppers who come to NBCU's golf site with an e-commerce shopping experience without the person having to log out and use another e-commerce site. Comcast is hoping its status as a trusted "authority" on the sport will sway customers to shop directly on its own site and that offering items where customers are already looking for information may spur impulse buying.
While the sport may not have the audience size and growth of other sports, such as football, basketball, or soccer, golf generates its own type of obsession, and those who follow the sport tend to have disposable income, which makes golf a desirable destination for high-end advertisers.
Comcast's new marketplace also allows the company to generate revenue from smaller golf brands that may not have the financial means or inclination to spend on NBCU or Golf Channel's traditional advertising venues. So, the new site won't be displacing advertising revenue but will likely be incremental.
A growth seed to watch
One might ask why Comcast is bothering to do this, as revenues from Shop With Golf probably won't move the needle for Comcast, which is a company with a $181 billion market cap. A NBCUniversal marketing executive at NBC told The Wall Street Journal that the company doesn't expect Shop With Golf to be profitable in the first year and only expects profits in the "seven figures" after that. A sub-$10 million business wouldn't be significant for Comcast, which earned more than $30 billion in adjusted EBITDA last year.
Nevertheless, this move is part of Comcast's more recent overall push on golf. In February, Comcast launched Golf Pass with pro golfer Rory McIlroy, a $9.99-per-month subscription service. Golf Pass members receive access to podcasts and instructional videos, as well as discounts on affiliated courses around the country. Golf Pass members will also receive discounts on Shop With Golf. So the Shop With Golf marketplace is really just one piece of the company's larger efforts to grow its overall golf business. Could Comcast become an e-commerce marketplace?
The Journal's reporting[subscription required] also hinted that Comcast has other marketplaces in mind. These could revolve around other sports NBC televises or even other parts of its entertainment empire.
Comcast's new e-commerce strategy appears to be the opposite of Amazon's. While Amazon started as an e-commerce marketplace, it's now making a much bigger push into digital advertising on its high-traffic website and app. While Comcast's core business was in advertising, it's now trying to link an e-commerce experience to its digital sports platforms.
In the face of industry upheaval, Comcast management has shown it's not afraid to cultivate new, more modern e-commerce and subscription businesses. While the Shop With Golf venture is too new to be able to judge its success, the merging of traditional advertising and e-commerce is certainly a phenomenon to watch across old and new media alike.
