Case 6:19-cv-00716-ADA Document 28-6 Filed 03/30/20 Page 1 of 3
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`3/10/2020
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`Behind Comcast's video-on-demand
`growth
`CEO Brian Roberts's numbers don't justify the stock's
`northward drift.
`October 4, 2004: 2:29 PM EDT
`By Eric Hellweg, CNN/Money contributing columnist
`
`Sign up for the Tech Biz e-mail newsletter
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`TECH
`BIZ
`
`BOSTON (CNN/Money) - What does $90
`billion buy you these days? Not as much as
`you thought it would eight years ago.
`hat's probably what most cable-company CEOs
`are thinking as 2004 winds down and they
`calculate what they got for the corporate treasure
`they spent to upgrade their networks after the 1996
`Telecommunications Act.
`Sure, they got the digital upgrades, which gave them the ability to
`offer that sweet trifecta of voice, video, and data. And the DVR craze
`sweeping through the United States, which satellite providers jumped
`on, plugs and plays nicely now on the digital networks.
`Any minute now...
`But what was thought to be the keystone of the effort -- video-on-
`demand -- has yet to provide the kind of revenue and customer
`retention that companies had predicted back in the late 1990s.
`(Remember Qwest's "any movie at any time in any language you
`want" ads?)
`Last week, Comcast CEO Brian Roberts gave attendees at Merrill
`Lynch's Media and Entertainment Conference some tantalizing news
`on the growing popularity of VOD, four years after the first VOD
`rollouts. Sixty percent of Comcast's 21.5 million subscribers are now
`VOD-ready, and in July those customers downloaded 50 million
`shows, up from 40 million in June. That's almost a movie a week for
`each customer.
`Pretty healthy growth, to be sure, and it was good news for the
`company's stock, which had been hovering near the 52-week low it
`set in August. Investors pushed the stock up more than 2 percent on
`Wednesday.
`But investors shouldn't get too ecstatic. For one thing, in his speech,
`Roberts mentioned that 15 million of the 50 million shows
`downloaded in July were programs from HBO. He touted the figure as
`proof that people don't want to watch programming on the networks'
`schedule.
`But those 15 million shows were
`downloaded at no extra cost to the
`customers; digital HBO subscribers
`receive access to select HBO VOD
`content. In other words, Comcast
`didn't make a penny of additional
`revenue from those downloads.
`"If you look at VOD numbers
`overall," says Mike Paxton, a senior
`analyst with InStat/MDR, "most users are generally satisfied with
`VOD, but they're not paying in large numbers to get additional
`content."
`
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`Making a name for itself
`VOD could help cable differentiate itself from its mortal enemies, the
`satellite-dish companies. Satellite providers can't offer VOD, and
`cable companies need to continue to hammer at Hollywood to score
`the kinds of content deals that will encourage people to stay with
`cable.
`But so far, signing quality (and quantity) content remains an elusive
`goal for Comcast and the other cable operators.
`"Comcast is still struggling with [Hollywood over] release windows,"
`says Daniel Ernst, an analyst with Soleil Securities. "By the time it
`comes out on VOD, people have a ready seen it on DVD."
`Satellite companies are adding
`subscribers at a rapid pace,
`something the cable industry
`can't claim.
`"Cable is not really growing at
`all," Paxton says. "It's seeing
`roughly 15 to 20 percent growth
`in terms of upgrades to digital
`cable, but net total growth for the
`industry will probably be down 2
`to 3 percent in 2004."
`For Comcast to make VOD the
`engine of its digital efforts, it
`m ust obtain the kind of content
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`https://money.crm.com/2004/10/04/technology/techinvestor/hellweg/index.htm
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`that will make people want to sign up for digital cable instead of
`satellite TN/.
`Netflix's growth shows, among other things, that people value
`convenience. VOD trumps Netflix's convenience factor, but falls
`behind in content.
`If Roberts can square those two factors -- content and convenience -
`- he might have some solid numbers to trot out a year from now.
`
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