“This leaves Comcast as the sole king of the cable hill, with John Malone and Charter Communications hitting a brick wall in their hopes of becoming a close No. 2,” said Richard Greenfield, an analyst with BTIG LLC.
Comcast has made $65.6 billion of acquisitions over the past 10 years, according to data compiled by Bloomberg. It acquired the remainder of NBCUniversal from General Electric Co. for $16.7 billion in March, following through on the cable company’s purchase of a controlling stake in 2011.
A tie-up between Comcast and Time Warner Cable would face tough scrutiny from the FCC, according to Craig Moffett, an analyst at MoffettNathanson LLC. The merged company would account for almost three-quarters of the cable industry, data from the National Cable Television Association show.
Comcast generated $200 million in retransmission-consent fees from its NBC stations in 2013–an increase of about 400 percent compared to the fees it collected from cable operators and satellite TV providers in 2012.
According to GigaOm, the two companies together will control about half the triple-play services — video, voice and internet — in the U.S., with a combined 33 million broadband connections.
At end of 2013, Comcast’s average revenue per user was around $151.30 a month, while Time Warner Cable’s ARPU was around $148.70 a month, according to UBS. The video-only ARPU per month was roughly $78 a month. Both companies have a gross margin on the video business of roughly around 55 percent.
The two companies together would have about 33 million broadband connections that brought in about $18 billion in broadband revenue during 2013. It could go to about $23 billion by end of 2018.
Voice has very high gross margins – about 91 percent for Comcast and 82 percent for Time Warner Cable.
Comcast can now push its X1 platform, their cloud-based DVR, into the former Time Warner Cable homes. Comcast’s X1 lets subscribers download DVR recordings directly to a mobile device and access practically their entire TV channel lineup on IP-connected devices.
Republican FCC Commissioner Ajit Pai told the WS Journal in December that the current administration is unlikely to bless a Comcast-TWC deal, pointing to the government’s decisions to block the airline and AT&T/T-Mobile mergers. The FCC declined to comment.
Comcast believes it can negotiate better rates with content providers since it would be a multi-channel monopoly for most of the United States. Comcast already charges more for a straight HDTV off-the-air signal. Their standard settop box produces a degraded television signal that’s full of artifacts.
The NBC’s Olympic coverage could indicate the future of the combined companies. You can’t stream the games unless you are a cable subscriber – and basic cable does not count. Perhaps the next move for NBCUniversal/Comcast/TWC combo is to charge for air that was formerly “free” – in the WiFi band.
Comcast, Time Warner Cable, Cox, Bright House and Cablevision joined together in 2012 to share Wi-Fi hot spots to provide Internet access for their broadband customers that total about 41 million. Comcast alone has added 1 million hot spots by deploying Wi-Fi routers that beam an additional “public” hot spot available to its customers.
Comcast is enabling Wi-Fi via strand mounts and merchant access points. Tom Nagel, Comcast’s senior vice president of business development, would like to take over the “free” WiFi band, reports CED Magazine:
“I think we really want to get to 160 MHZ block channels. Today Wi-Fi is at 20 MHz channels. If I can do 160 MHZ, we can generate something close to a gigabit Wi-Fi and doing that not only makes the outdoor broadband better, but all of the in home connectivity better as well.”