Hendin+C+Strategy+Report

To: Proximity social networking team From: Hendin C Subject: Comcast Cable (On-Demand) Strategy Report Date: 22 February 2010

Here is my strategy report for Comcast Cable's On Demand services. While Comcast is currently a leader in providing cable television, Gen-Y does not receive all of its video based entertainment, including movies and television shows, through their cable provider. Like many large companies, Comcast employs a multitude of strategies to increase sales. As content becomes more web based, Comcast needs to continue to follow current trends in order to be more appealing to Gen-Y users.


 * Profile**

As the largest cable company in the United States, Comcast Cable Communications continually strives to stay ahead of the curve in communications and entertainment. According to Hoovers.com, Comcast Cable now serves about 24 million basic cable customers in 39 states. During 2009, its operations generated consolidated revenue of approximately $35.8 billion.

Comcast’s revenue stems from five sources:


 * **Cable Television** - Comcast is the nation's largest video provider, offering interactive services packed with the most high-definition, video on demand and best content.
 * **Comcast High-Speed Internet** - Comcast is the nation's largest residential Internet service provider with an advanced fiber-optic network that offers the best of speeds and reliability as well as exceptional online content.
 * **Comcast Digital Voice** - Comcast's delivers innovative and reliable IP-enabled home phone service that includes all of the functions of traditional phone service, plus enhanced features that are integrated with other Comcast services.
 * **Comcast High-Speed 2go** - Comcast's High-Speed 2go is a fourth-generation, (4G) wireless data service that provides the fastest available wireless Internet in the nation via wireless data cards.
 * **Comcast Business Class** - Backed by industry-leading, 24/7 business-class support, Comcast provides advanced communication solutions to small and mid-sized organizations to help them meet their business needs. (Comcast.com)

With focus on continued growth and expansion, Comcast adds to its expanding library of On Demand services on a monthly basis, with a library that currently includes 17,000 choices with over 2,600 in high definition. Most On Demand content is included free with the customer’s cable package. “Comcast’s On Demand lineup includes thousands of programs, including movies, primetime hits, TV shows, music videos, kids’ shows, news and educational shows, exercise programs and more (Comcast.com).”


 * Competitive Landscape**

One of the most attractive features Comcast Cable provides is its On-Demand service. With On Demand, users can select television programs or movies from a digital library they access on their cable box. Once a user makes his or her selection, they are able to start and stop the program at any time.

Comcast is not the only cable company that provides video-on-demand service. Other companies such as Verizon FiOS, Time Warner Cable, DirectTV, and Dish Network provide constant competition with each other and Comcast Cable in an effort to gain a firm hold of the market share. While Comcast’s library of over 17,000 titles sets the bar, companies like Verizon FiOS strive to keep pace

Below is a list of the four competing companies referenced above, and the size of their video-on-demand libraries according to their individual websites:
 * Verizon FiOS: 16,000 titles
 * Time Warner Cable: 10,000 titles
 * DirectTV: 5000 titles
 * DishNetwork: 2000 titles

While Comcast Cable currently competes with many other cable companies throughout the country, the On Demand option provided by many cable providers serves as a possible alternative to subscribing to services like those provided by Netflix. Netflix allows subscribers to pay a monthly fee, and rent DVDs which are mailed to the user. Users can rent as many DVDs as they choose, and depending on which plan they subscribe to, can rent out as many as 8 DVDs at a time. In addition, users with an internet connected Netflix Ready Device, such as an XBOX 360, can download certain movies and television shows to their television similar to the On Demand service provided by the aforementioned cable companies. These customers can also access the same library through their internet connected laptop.

Netflix and On Demand provide overlapping services. On Demand lets users watch movies and television shows instantly on their TV, similar to Netflix users with a Netflix Ready Device. On Demand also does not limit customers in terms of the number of titles they view.

Netflix provides a buffet style approach to DVD rentals. It is simply a flat all-you-can-watch monthly rate. While Comcast On Demand provides free content, it offers a la carte pricing for many newly released movies. The user is charged a certain price for each of these movies he or she orders, and will have access to the movie for a limited period of time, similar to renting a movie from a video store.

Furthermore, websites like Hulu.com and FanCast.com allow users to watch television shows and some movies free of charge. However, it appears that visitors to these sites do so in a supplementary manner. A “ Leichtman Research study of U.S. adults found that those who watch TV online are more likely to also use premium channels, HDTV and on-demand services. They are significantly less likely to cut their subscriptions or change providers (Learmonth 2009).”


 * Business Strategy**

Recently, Comcast has launched its Xfinity service. This service allows customers who subscribe to both internet and cable television through Comcast to enjoy online access to On Demand programs. “The newly christened Fancast Xfinity TV service allows subscribers to watch full-length television shows from 27 networks -- including pay cable offerings HBO, Cinemax and Starz -- on their computers ( Chmielewski 2010) .” This service is a direct response to the growing popularity websites like Hulu and Fancast among young adults. “’It's a defensive move,’ said Bobby Tulsiani, a media analyst with Forrester Research. ‘The threat was not Comcast subscribers switching to Time Warner or to satellite; the threat was subscribers giving up pay TV subscriptions altogether and moving exclusively to the Internet (Chmielewski 2010).’”


 * Gen-Y Implications**

Comcast Cable strives to remain one step ahead of the curve with the content it provides and the diverse accessibility options it provides for its users. This strategy yields vital implications to Gen Y. Comcast focuses on offering an assortment of options for Gen Y to view its content. Furthermore, Comcast focuses improving the quality of its content along with the quantity. We are now in the age of high definition, a priority for Gen Y television viewers. With continued emphasis on providing more HD content, along with including various methods for users to access its On Demand content, including online accessibility, Comcast figures to remain one of the most appealing entertainment providers for Gen-Y.

// REFERENCES // Chmielewski, Dawn C. "COMPANY TOWN; Comcast launches online TV service." //Los Angeles Times// 16 Dec. 2009, Business sec.: B3. Print.

King, Danny. "Cable Providers Seek Growth Outside TV; Major Operators' Earnings Show TV Is Slowest Growing Division." //Television Week//. 07 Mar. 2008. Web. 19 Feb. 2010.

Learmonth, Michael, and Andrew Hampp. "TV everywhere-as long as you pay for it; Time Warner's Bewkes plots industry initiative to eradicate free content." //Advertising Age// 02 Mar. 2009: 1-1. //LexisNexis//. Web. 19 Feb. 2010.