Price dissatisfaction and unnecessary content in cable services:<\/strong> In 2015, the average monthly cable bill in the U.S. was $99.10 with the average household receiving over 150 channels, of which less than 20 were actually watched. [1]\u00a0The cable industry practice of \u201cbundling\u201d channels into packages often means that customers are forced to pay for channels that they do not want.<\/p>\n Technological developments in digital streaming:<\/strong> The availability of digital streaming services and on demand viewing across multiple platforms and devices is disrupting the business model that has sustained the cable industry for decades. Digital streaming companies such as Netflix, Hulu, and Amazon provide on demand viewing at far lower price points, available across a range of devices.<\/p>\n Alternatives for original content: <\/strong>Digital streaming companies have begun to enter the business of content creation, which poses an additional threat to cable companies. In 2011, Netflix began producing original content with its highly successful House of Cards<\/em>, available only through subscription. By 2015 Netflix was streaming 16 original shows, and announced plans to have 31 original shows by the end of 2016. [2]<\/p>\n Premium cable networks have begun offering \u201cover-the-top\u201d (OTT) content, or standalone access to content without requiring a traditional cable subscription. In April 2015, HBO launched HBO Now, with Showtime launching a similar OTT option in July of that year. [3] [4]<\/p>\n <\/p>\n Millennials driving the trend:<\/strong><\/p>\n According to Deloitte\u2019s Digital Democracy Survey, millennials spend nearly 50% of their time watching tv shows and movies on devices other than their television, compared to about 33% for total respondents. [5]<\/p>\n <\/p>\n Comcast vulnerable:<\/strong><\/p>\n Comcast is the largest broadcasting and cable television company in the world by revenue. [6] In 2015, Comcast had total consolidated revenues of $74.5 billion, of which about 60% was from its Cable Communications segment\u2014consisting of video, high-speed internet and voice services to residential customers. [7]<\/p>\n Comcast 2015 Consolidated Revenue by Segment<\/strong><\/p>\n <\/p>\n Comcast strikes back:<\/strong><\/p>\n To adapt to changing technology and consumer behaviors, Comcast has taken a number of actions to hedge against cord-cutting. These efforts have allowed Comcast to beat analyst projections in one of the worst performance periods for cable networks (3Q2015, see graph below) and work towards reducing the number of cord-cutters. And in 2Q2016, Comcast actually increased the number of subscribers by 53,000. [8]<\/p>\n Acquisition of content producers: <\/strong>With the acquisition of NBCUniversal in 2011 and DreamWorks Animation in April 2016, Comcast has become a content producer as well as a content distributor. [9] This has allowed Comcast to diversify its revenue streams\u2014shown in the \u201cCable Networks\u201d segment of chart above\u2014and hedge against decreasing demand for traditional cable services.<\/p>\n \u201cCord-shaving\u201d, or offering cheaper bundles of cable:<\/strong> Comcast has started to offer discounted packages with fewer channels in order to prevent cord-cutters. [10] While these more customized, a-la-carte programing packages may be less profitable\u2014most basic cable packages run between $10 and $50 a month\u2014at least Comcast is not losing out entirely on these customers. [11]<\/p>\n Anchoring with internet and phone services:<\/strong> Through offering a combination of video, internet and voice services through \u201cComcast triple play\u201d, the company has been able to maintain customers by making the incremental video subscription relatively low in price. Comcast continues to invest in its internet capabilities and fight for residential market penetration as an internet provider. [12]<\/p>\n New X1 platform and cloud DVR technology:<\/strong> To keep up with both competitors and the changing technological landscape, Comcast has invested in new technology that allows customers to access services on as many devices as possible. In its new cloud-based X1 platform, subscribers can access and store content on multiple devices. [13] This is perhaps the most meaningful step that Comcast has taken to address changing customer needs, embrace technological advances and sustain customers to its cable services.<\/p>\n <\/p>\n What\u2019s next for Comcast?<\/strong><\/p>\n In order to combat cord-cutting, Comcast needs to shift from a product-oriented business towards one that serves consumer needs. Developing its X1 platform is a step towards delivering value based on customers\u2019 changing usage of technology. However, Comcast has a long way to go in terms of perception as a customer-centric business. Focusing on making its products and services more convenient and providing higher value to customers instead of trying to make them difficult to switch away from would be a good place to start. Investing in customer service could also go a long way in building brand equity with consumers.<\/p>\n <\/p>\n [Word count: 797]<\/p>\n <\/p>\n [1] http:\/\/finance.yahoo.com\/news\/average-cable-bill-hits–99-but-can-it-last-153936942.html<\/a><\/p>\n [2]\u00a0http:\/\/www.forbes.com\/sites\/greatspeculations\/2015\/12\/14\/how-increasing-original-content-will-benefit-netflix-in-the-long-run\/#5d8730e97b13<\/a><\/p>\n [3]\u00a0https:\/\/en.wikipedia.org\/wiki\/HBO_Now<\/a><\/p>\n [4]\u00a0https:\/\/en.wikipedia.org\/wiki\/Showtime_(TV_network)<\/a><\/p>\n [5]\u00a0https:\/\/www2.deloitte.com\/content\/dam\/Deloitte\/us\/Documents\/technology-media-telecommunications\/us-tmt-deloitte-digital-democracy-executive-summary.pdf<\/a><\/p>\n [6]\u00a0https:\/\/en.wikipedia.org\/wiki\/Comcast<\/a><\/p>\n [7]\u00a0http:\/\/www.cmcsa.com\/secfiling.cfm?filingID=1193125-16-452423<\/a><\/p>\n [8]\u00a0http:\/\/fortune.com\/2016\/04\/27\/comcast-cord-cutting\/<\/a><\/p>\n [9]\u00a0http:\/\/money.cnn.com\/2016\/04\/28\/media\/comcast-dreamworks-nbcuniversal\/<\/a><\/p>\n [10]\u00a0http:\/\/fortune.com\/2016\/04\/27\/comcast-cord-cutting\/<\/a><\/p>\n [11]\u00a0http:\/\/finance.yahoo.com\/news\/cord-%E2%80%9Cshaving%E2%80%9D-is-the-new-cord-cutting-193752756.html<\/a><\/p>\n [12]\u00a0http:\/\/realmoney.thestreet.com\/articles\/09\/05\/2016\/comcast-hangs-more-cut-cable<\/a><\/p>\n![\"Comcast](\"https:\/\/d3.harvard.edu\/platform-rctom\/wp-content\/uploads\/sites\/4\/2016\/11\/comcast-rev-final.png\")
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