Comcast Class A Earnings Call Insights: Marketing Strategy, Cable & NBC Side

Comcast Corp Class A (NASDAQ:CMCSA) recently reported its first quarter earnings and discussed the following topics in its earnings conference call.

Marketing Strategy

Douglas Mitchelson – Deutsche Bank: So, I have a question for Neil regarding marketing strategy and a quick clarification from Michael. Michael, on MDU video sub-accounting you noted half a video sub losses in 1Q ’13 were due to MDU accounting. How much of 1Q ’12 reported video sub losses were due to that MDU accounting? And then for Neil, you showed strong voice growth. I think the focus remains on triple-play marketing, appears deemphasizing triple play marketing their concerned customers don’t want to pay for Voice service, how do you gain comfort that triple play remains the right marketing strategy. Is there anything in customer quality metrics or churn or customer satisfaction surveys that you can share with us? Thanks.

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Michael J. Angelakis – CFO and Vice Chairman: So why don’t I take the question Doug on the second part. Really the way I think we are looking at is we did lose a little bit more primary customers in the first quarter of 2013 than we did in the first quarter of ’12. So that’s really one of the focus points that we’re on and as I mentioned in our prepared remarks, the primary reason for that was really the increases that we have provided in rates during the first quarter compared to last year.

Stephen B. Burke – CEO, NBCUniversal and EVP, Comcast Corporation: Doug, on our marketing strategy, it’s very consistent with where we have been in the past. We’re very focused on triple play. Our triple play sell-in was up 8% year-over-year and I think a lot of the performance – the good performance in our phone results was attributable to that. We’re getting a higher triple play sell-in and triple play customers’ churn at a significantly lower rate than Single Play customers and customers’ sat is higher. So that’s why we are going to continue with that strategy.

Cable & NBC Side

Jessica Reif-Cohen – Bank of America Merrill Lynch: I guess one for each segment. On Cable, could you talk a little bit about new products? You have a lot of rights that you are buying from programmers that I think you have talked about in the past that you may market differently or introduce new products, so if you could just talk about that and other opportunities like home monitoring, which you didn’t mentioned? And then on the NBCU side, it seems like that really excellent progress across the board with the exception of Broadcasting, which probably has the most upside over the longer-term. So I was just hoping if Steve is on the call if you could just address what you are doing to turnaround NBC which has had glimmers of light at times? Thanks.

Brian L. Roberts – Chairman and CEO: I’ll speak to the products. As you know X1 is rolling out nationwide, we’re in about 30% of the country now and launching markets on a continuous basis. We’ll be at about 50% of the footprint by the end of Q2. Our home product is rolled out nationally. It’s starting to gain momentum. Interestingly, a relatively high percent of the customers who have never had a security service are taking home and 40% of those are new to Comcast and 70% of those are taking triple-play or taking quad-play, so it’s an encouraging sign. In terms of rights, we – as you know acquired new rights to our TV Everywhere contract with a number of major distributors and we’re leveraging those in areas like Watchathon. We did Watchathon and it upped – we got 123 million views across all of our platforms. Interestingly the set-top box views were up 27%. So, there wasn’t just viewing, it was viewing on the television and the big screens, but our views on mobile and as well online were also – and Streampix for getting right for SVOD from a number of the programmers and Streampix has continued to grow both in the service that we include for our high value customers as well as the a la-carte buys. So, there is lot of new product growth going on, but our real focus now is on X1 and also on the gateway product that ups our throughput of our in-home WiFi.

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Michael J. Angelakis – CFO and Vice Chairman: We announced the deal a couple of years ago, we said that it would take something like three to five years to get momentum at the broadcast network really materialized. I think we made good progress in the first couple of years primarily with The Voice, we are now doing The Voice. We are now doing The Voice both in the fall and the spring, and the good news, when The Voice came back this spring, ratings were actually higher – are actually higher than in the fall. So that strategy has worked, and we had real momentum in the fall. During the first quarter, when The Voice was not on the air, we lost that momentum. We knew that would happen, and it came back, when The Voice came back. We have a few other shows that are showing glimmers of hope, but we really need to get one or two more good shows. But we are making good progress. We were in fourth place for a number of years. Last year we came in third place barely primary because of the Super Bowl. This year it looks like we are headed for a strong third place. So, we are making some progress, but we do need some more shows. I happen to be in L.A. right now, we are going through pilots, and we are putting a tremendous amount of focus and concentration on building on the success we’ve had so far, and developing shows that will continue that success next year…

Jessica Reif-Cohen – Bank of America Merrill Lynch: Can I just a quick follow-up for Neil? What is the opportunity for home monitoring, like a dollar amount? Can you say what do you think?

Neil Smit – President and CEO, Comcast Cable and EVP, Comcast Corporation: Well, we currently sell our security service, our XFINITY Home service for different price points; $29, $39, and $49 depending on the amount of equipment and level of service. That includes the home monitoring service. I think that there are other opportunities for products that we could hang-off the Wi-Fi that we are currently investigating. So you could have the home security service, the lighting service, home energy management that we have today and you could add other services on to that. We are looking at that portfolio of services that we could hang-off the Wi-Fi umbrella right now, which is one of the reasons we are focusing so heavily on in-home Wi-Fi. We’ve got the fastest in-home Wi-Fi. 60% of mobile usage in-home and people are hanging a lot more devices, an average of six devices off their home WiFi, so we are going to continue to push hard on that front.

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Michael J. Angelakis – CFO and Vice Chairman: One thing I would add, Jessica, related to Xfinity Home as Neil mentioned a few minutes ago, as we kind of look at it two ways, one is as another product that certainly is attracting a different customer base, a lot of the relationships are new to Comcast. In addition, a lot of them bundled, whether it’s triple play or quadruple-play, so we think that’s really positive. And then on a standalone basis we hope to build the business which we think is pretty successful over the next few years.

A Closer Look: Comcast Earnings Cheat Sheet>>