Comcast chairman and CEO Brian Roberts didn’t get a raise in 2017, netting $32.5 million in salary, incentives and stock awards for the year, about 1% less than the $32.9 million he received in 2016.

Roberts’ base salary increased slightly from $3.0 million in 2016 to $3.1 million last year. His stock and option awards stayed basically the same at $5.3 million and $5.4 million, respectively, while his non-equity incentive base compensation fell from $10.7 million in 2016 to $9.1 million last year.

Chief financial officer Michael Cavanagh took the biggest hit -- his total compensation fell 22% to $20.1 million from $25.7 million in the prior year.

NBC Universal CEO Steve Burke was once again the highest paid Comcast executive – receiving $46.5 million in total compensation, up 1% from the $46.1 million he received in 2016.

Senior executive vice president David Cohen received $17.7 million in total compensation in 2017, down from the $17.9 million he received in the prior year. Non-executive vice chairman Neil Smit, who stepped down as CEO of Comcast Cable in April 2017, received $25.9 million in total compensation, a 2% increase from the $25.4 million he received in 2016.  

For the first time, the lights of Broadway will shine on The Cable Center’s newest Cable Hall of Fame class.

Five executives and a groundbreaking television show — AMC’s drug-dealer drama Breaking Bad — will share the stage of New York’s Ziegfeld Ballroom on Wednesday, April 4, for the 2018 Cable Hall of Fame induction ceremony. Lending more star wattage to the festivities will be host Carla Hall, a popular cooking personality from ABC’s The Chew and Bravo’s Top Chef and Top Chef America.

Among the industry figures set to be enshrined are Nomi Bergman, president, Advance/Newhouse; John Bickham, president and chief operating officer, Charter Communications; Balan Nair, president and CEO, Liberty Latin America; Richard Plepler, chairman and CEO, HBO; and Neil Smit, vice chairman, Comcast Corp.

June Travis, a former NCTA executive, will also be presented with the group’s Bresnan Ethics in Business Award. Breaking Bad creator, head writer and executive producer Vince Gilligan will accept Hall of Fame honors on the AMC show’s behalf.

Nomi Bergman
President, Advance/Newhouse

Second-generation cable executive Nomi Bergman didn’t intend to get into the family business. After graduating from the University of Rochester with a degree in statistics and economics, Bergman went to work as a systems consultant in Arthur Andersen & Co.’s consulting division. Bergman’s father, Robert Miron, ran the Newhouse cable companies, and a cousin at parent company Advance/Newhouse encouraged her to join the larger organization’s internal consulting group. As an analyst with Advance/Newhouse, Bergman worked on instituting best practices and operating efficiencies among the company’s publications and cable divisions.

In the late 1980s, her group installed new accounting systems at company properties. Noticing that the various cable operations used a variety of billing systems, she recommended integrating them. She took charge of what would be a two-year project involving 50 system conversions. She became a cable nomad, setting up camp in each Newhouse location to oversee successive rollouts. The odyssey was an immersion in MSO field operations that convinced Bergman to make her professional home in cable at Advance/Newhouse. (The company formed a partnership with Time Warner Cable in 1995.)

Bergman adapted quickly to the architecture side of the cable business. Among her most satisfying achievements was being part of the launch of RoadRunner, Time Warner’s broadband internet service. “Being a part of reinventing the purpose of a cable system … re-architecting service delivery, growing the team, was beyond exciting,” she said.

Bergman helped launch sixth-ranked MSO Bright House Networks in 2003 and served as the company’s president from 2007-16. Today, as senior executive officer with Advance/Newhouse companies, she focuses on corporate development and strategic partnerships.

The busy executive and mother of three daughters has been a force in a number of cable and community support organizations, and she remains actively involved with several. Her work on the board of Adaptive Spirit grew out of a mother-daughter activity that became an annual tradition. “Watching [U.S. Paralympic Ski Team members] embrace their disabilities as their star qualities and become exceptional athletes is incredibly inspiring,” Bergman said. “It’s a powerful metaphor for us all — about how to live our lives and be our best selves.”

She believes in the value of kindness in all aspects of life. “People trust kind and caring leaders,” she said, and feels these qualities helped her to cultivate dedicated fearless, and knowledgeable teams who felt empowered to win.

John Bickham
President and Chief Operating Officer, Charter Communications

John Bickham’s career has taken him from the utility industry in Texas to the cable C-suite in Connecticut. Born in Corpus Christi, he graduated from Texas A&I — now part of the Texas A&M system — but had no idea where he would go from there. He landed at utility holding company Houston Industries, where he helped design and build coal-fired generating stations. In 13 years with the company, he was involved in utility regulation at the national and state levels. In the mid-1980s, the holding company became interested in cable and went into partnership with ATC. Bickham’s accidental entry into the cable business was the start of a long, successful career.

Compared to the staid world of utilities, Bickham found cable “an immature business, unsophisticated from a business planning and construction standpoint. It was different, it was fun, and you were a lot closer to the cash register.” Thirty years ago, “who knew the business was going to be what it is today? Today … we sell services that every home and business needs.” In 1986, he co-founded KBLCOM, a cable company that partnered with ATC and owned cable systems in eight states. He left as president and chief operating officer of KBLCOM to operate Time Warner Cable’s Los Angeles division, and advanced to executive vice president of TWC, overseeing the company’s operations in North Carolina, South Carolina and Texas.

Bickham moved to Cablevision Systems in 2004 as president of cable and communications. He joined Charter as COO in 2012 and added president to his title in 2016 when the company’s acquisition of Time Warner Cable and Bright House Networks closed. In the cable industry, local operations continue while the owners change; at Charter, Bickham has gotten reacquainted with cable systems that he previously led at KBLCOM.

The father of two grown daughters, Bickham enjoys spending time with his four-year-old grandson. And he travels the world in pursuit of game birds — to England, Spain and South America, as well as in the U.S.

Bickham advises the industry’s future leaders to take every opportunity to learn the different aspects of the business, especially as companies grow and jobs become more tightly focused. “Don’t limit yourself,” he urged. “Don’t ever get bored with what you’re doing. Move around in your company; experience different things.”

Breaking Bad
Television Drama Series, AMC, Vince Gilligan, creator

Only on cable could a series that starts with a cancer diagnosis and continues into the darkest corners of the methamphetamine industry find a home. Breaking Bad broke new ground in television drama and demonstrated the possibilities of innovative storytelling.

The series premiered on AMC in 2008 and ended in 2013. It tells the story of Walter White, a New Mexico chemistry teacher who, with two years left to live and a desire to secure his family’s financial security, becomes a powerful meth manufacturer.

Series creator Vince Gilligan envisioned an approach that had never been tried in series television: a “show about change” that began with a definite end point in view. Gilligan is a TV fan who streams shows from the 1950s and ‘60s and observed, “The thing TV has done very well is tell an indefinite story — a story that can go on for 20 years [a la Gunsmoke or NCIS]. And the way to do that, from a writer’s point of view, is not to put the characters through too many personal changes … I figured stasis had been tried with great success for 50 years, and something more dynamic in terms of character would be interesting. But that meant it couldn’t last indefinitely.” Gilligan was well aware that the concept of a finite series would be difficult to sell. “That’s why I’m still amazed that Sony and AMC signed on. … You don’t want to be told from the get-go, ‘This thing probably won’t last long enough for you to make your money back.’ ”

Not only does Walter White change, but unlike other TV heroes or anti-heroes, he changes for the worse, as the series title suggests. Legend has it that Gilligan pitched his idea to AMC as “turning Mr. Chips into Scarface.” Another unusual approach: in the moral universe of Breaking Bad, actions have consequences. Ultimately, characters reap what they sow, and nobody gets away with anything.

Gilligan believes television drama continues to change, and he hopes it will continue to pursue shows designed for more than the same demographic sweet spot. Above all, he wants writers to be bold. “Don’t copy off your neighbor’s exam,” he said. “Don’t pay too much attention to the stories other folks are telling; tell a story that excites you.”

Balan Nair
President and CEO, Liberty Latin America

“My life is 95% luck,” said Balan Nair. “Making the most of opportunities takes a little bit of skill, but to get those opportunities [takes luck]. I’m a very lucky man.” What Nair calls luck, others might see as destiny.

In his 11 years with Liberty Global, Nair has advocated focusing on software as the driver of cable’s evolution and he’s met the challenge of harmonizing products, services, workforce and networks across multiple countries, languages and regulatory environments. Named CEO of Liberty Latin America late last year, he is now focused on high-potential markets in Latin America and the Caribbean.

Nair grew up in Malaysia, coming to the U.S. in 1985 to study electrical engineering at Iowa State University. He met his wife at Iowa State — an event he believes was the greatest stroke of luck in a fortunate life. He began his career working on high-voltage power transmission, and discovered an aptitude for writing software. His wife worked at telephone company USWest in Iowa, and when she was transferred to Minneapolis, he followed and found work at a power research company. When another USWest transfer came up, this time to Denver, Nair switched from power to telco, and joined USWest himself. In more than 12 years with the company and its successor, Qwest Communications International, he rose up the leadership ladder to become chief information officer and chief technology officer.

With extensive telco experience under his belt, Nair decided to move on to the fast-growing internet world. He joined AOL as chief technology officer, overseeing technology, IT and network operations. The Nairs left Denver for AOL headquarters in Washington, D.C. Given his experience, Nair was well-positioned for an industry that saw its future in both areas. Liberty Global came calling in 2007, and the family happily returned to Denver.

As a cable industry newcomer, Nair saw a huge opportunity. He “immediately saw the advantage cable had over any other telecommunications business. We had better networks, better platforms and we were better suited for the transition to a software world. We also have a perpetual entrepreneurial spirit. The founding members [of the industry] are still involved, and our second-generation managers were trained by founders. That is very special.”

Richard Plepler
Chairman and CEO, HBO

It’s safe to assume that Richard Plepler is the only high-ranking cable executive whose entry into the industry came about through a chance meeting with a U.N. ambassador at a Chinese restaurant. To start at the beginning: Plepler grew up in the ’60s in a politically active home where engaged, informed citizenship was paramount. “At the dinner table, you had to have read The Wall Street Journal and The New York Times, and you had to be prepared to talk about the world,” he recalled.

After graduating from Franklin & Marshall College, he went to work for Sen. Chris Dodd (D-Conn.). From Dodd, he learned about building consensus and the notion that people can disagree without being disagreeable. “I think that informed the way I began to think about business, and I think it informs my leadership style,” Plepler said.

Plepler next went on to work for a small media-consulting firm that specialized in crisis management. After a year, brimming with confidence at 26, he started his own strategy and production firm, RLP International, which would make films to help countries that wanted to improve their images. Cheerfully acknowledging his own youthful hubris, Plepler is quick to point out that he was RLP International’s sole employee.

His big break came at a Chinese restaurant in New York in 1988, where then-Israeli ambassador to the U.N. Benjamin Netanyahu happened to be dining. “I went over to introduce myself, and I said, ‘You have a huge problem in the U.S.’ The first intifada had broken out, and Israel was being viewed negatively. I told Netanyahu, ‘This needs to be put in a larger context, sir, and my company, RLP International, knows how to do that.’ And by some miracle, he said, ‘Come see me.’ ” The result of their subsequent meeting was a well-received documentary for PBS that explained the complexity of Israel’s situation. A call from HBO’s Michael Fuchs soon followed, inviting Plepler to join the network in 1992 as communications chief.

“From my first day [at HBO], I always felt like I was where I belonged,” Plepler said. “The people I’ve observed who have done the best feel they’re in the environment where they’re meant to be. Be in the place where you feel passionate about the work, about the mission.”

Neil Smit
Vice Chairman, Comcast Corp.

Growing up on a farm in Connecticut, Neil Smit didn’t have a clear idea of what he wanted to be when he grew up, but he knew what he didn’t want to do. Farming was at the top of that list; construction was second. “My father was in construction, and I didn’t necessarily want to be the second generation in the construction business,” he said. “I wanted to carve my own path.” He entertained notions of becoming an astronaut, but after graduating from Duke University, he ended up on sea, air and land as a member of the legendary Navy SEALs.

From his five-and-a-half years as a SEAL, Smit learned important lessons that he applied to his subsequent business career. “The first thing you learn in SEAL teams is, it’s all about teams,” he said. “If you’re not pulling together, you’re pulling apart, and you do everything together as a team. The other thing is that you communicate very directly from day one. And finally, you’re always developing your skills, your people, and you have to keep building new capabilities. More than anything, it’s about the teamwork.”

When Smit retired from the Navy as a lieutenant commander, he worked in hostage negotiations before moving into the corporate world. He held leadership roles at Nabisco and Pillsbury, and then moved to AOL and MapQuest. Along the way, he got to know Paul Allen, who invited him to join Charter Communications as CEO in 2005. Cable appealed to him. “The day-to-day diversity of things that we had to deal with was interesting,” he recalled. “We were in the internet business, the phone business, the video business, and it was an ever-changing environment.” Another plus: “The quality of the people was very high; there’s still an entrepreneurial spirit in the industry,” he said.

Smit joined Comcast Cable as president and CEO in 2010. He now serves as a vice chairman of Comcast Corp., working to develop future technology- oriented business opportunities. Active in his community, he recently left the board of trustees of Philadelphia Children’s Hospital, and continues his work with the board of visitors for the Nicholas School of the Environment at Duke University. And his adventurous spirit remains strong. He enjoys boating, water sports and skiing, and recently took up ice driving with his son in northern Canada. “I’ll try about anything,” he said.

Bresnan Award Recipient

June E. Travis

June Travis retired from the cable television industry in late 1999. Since 1994, she had served as executive vice president and chief operating officer of the National Cable Television Association, the industry’s principal trade association based in Washington, D.C.

Prior to joining the NCTA, Travis was president and chief operating officer of Rifkin & Associates, a Denver-based cable television operator. Before that, she served in several executive positions at American Television and Communications, the predecessor to Time Warner Cable.

Recalling the days when cable was a much smaller business, Travis said the industry’s ethical core was apparent in the relationships between its leaders. The early entrepreneurs “were very competitive with one another, but if attacked from the outside, they circled the wagons and supported one another. The collegiality was palpable.”

Starting her cable career as a secretary, Travis noted the admirable leadership qualities she saw practiced by industry role models. “I kept thinking, ‘Gee, if I ever get into management, that’s how I would like to manage, that’s how I would like to be involved in the community, that’s how I would like to give back.’ ”

Travis has served as an officer and board member of a number of cable television industry boards, including CommScope, NCTA (now NCTA: The Internet & Television Association), C-SPAN, Cable in the Classroom, TeleCorps and Women in Cable (now Women in Cable Telecommunications). She chaired the industry’s political action committee, CablePAC, for nine years. She said such organizations made a tremendous difference to the industry’s employees.

She has been active in a number of Colorado organizations including the Greater Denver Chamber of Commerce Board of Directors, the Colorado Forum, the Colorado Women’s Forum, the National Jewish Center, Inter-Faith Community Services, Young Americans Center for Financial Education and the Dumb Friends League. She recently stepped down as chairman of the board of the Daniels Fund but remains on that board and also serves as a trustee for the Denver Center for the Performing Arts.

Travis believes in business leaders’ responsibility to their communities. “It’s huge,” she said. “And it pays back a hundred-fold. If you are genuinely in the community, not for the recognition, but truly caring, and participating, and supporting the community, you can’t buy that kind of customer respect.”

The Cable Center announced its 2018 Cable Hall of Fame class, a list of industry luminaries from the cable programming and operations  sectors that will be inducted during the 21st annual Cable Hall of Fame celebration on April 4 at New York City’s Ziegfeld Ballroom.

RELATED: Cable Center picks NYC site for Hall of Fame ceremonies

The honorees are: 

• Nomi Bergman, Senior Executive, Advance/Newhouse
• John Bickham, President and Chief Operating Officer, Charter Communications
• Jarl Mohn, President and CEO, NPR
• Richard Plepler, Chairman & CEO, HBO
• Neil Smit, Vice Chairman, Comcast Corporation

The honorees were chosen based on their leadership, entrepreneurship and innovation in media. Since 1998, 127 leaders have been inducted into the Cable Hall of Fame.

“We are thrilled to roll out the red carpet for our 2018 inductees at our first Cable Hall of Fame celebration in New York at the phenomenal Ziegfeld Ballroom,” said Penthera Partners CEO and chairman of The Cable Center’s board of directors Michael Willner in a statement “This year’s honorees are some of the most respected leaders in our industry, and they have helped to shape the face of cable for future generations.”

The ceremony will be held at the recently renovated Ziegfeld Ballroom, which opened this fall in the former Ziegfeld Theater building. The Ziegfeld hosted Hollywood's top blockbuster movie premieres for decades, earning acclaim as one of the most celebrated venues in the world. The Ziegfeld Ballroom will be the home for the Cable Hall of Fame through at least 2020.

“The dedication, hard work and entrepreneurial spirit shown by this year’s inductees has helped to guide the successful development of our industry. We look forward to honoring this stellar class on April 4,” said The Cable Center CEO Jana L. Henthorn in a statement

For more information on the celebration and to secure sponsorships, visit www.cablehalloffame.com, or call 720-502-7513.

Comcast Cable CEO Dave Watson has been named chairman of the C-SPAN board's executive committee.

That came at C-SPAN's board meeting in New York.

Watson joined the board earlier this year, succeeding Comcast CEO Neil Smit after he stepped down.

Also joining the board of the public service networks funded by the cable industry were Dexter Goei, president of Altice N.V and chair/CEO of Altice USA, and Wide Open West CEO Steven Cochran.

Elected to additional two-year terms were board members Pat McAdaragh, president of Midco; and Alan Block, chair of Block Communications.

The executive committee can be empowered to set strategy and over see finances on behalf of the 15-member board.

There are no flukes in Cable.

Just ask Comcast, which was the first cable operator to report a full year of positive video subscriber growth in a decade, ending 2016 with 161,000 more customers than in the previous year. That Comcast managed to do that just as over-the-top and alternative video delivery systems were proliferating, gaining legitimacy and chipping away at traditional pay TV customer rolls was remarkable enough, but it was no fluke.

The Distributor of the Year Issue:Comcast's Makeover Yields Results|Five Ways Comcast Is Leading in Tech

That growth was a planned, concerted effort that not only yielded a video customer surplus, but was also profitable. Comcast finished the year with a 6.6% increase in cable-systems revenue and a 5.6% rise in cash flow. And it did it all the hard way, with no aggressive promotional pricing or special deals to attract customers that will drop the service in six months.

Instead, Comcast put its collective head down and focused on the fundamentals, rolling out new products like Xfinity Home and Xfinity Mobile at a steady pace and pumping hundreds of millions of dollars to beef up customer service.

The path to positive subscriber growth was a multiyear process, starting with the hiring of former Charter Communications CEO Neil Smit in 2010. It was Smit who initiated a multipronged plan to improve customer service, beef up the network and steer the company on a path toward product innovation and network superiority.

Smit stepped away from day-to-day operations in April — he is now vice chairman of Comcast Corp. — and handed the reins to 20-year Comcast veteran Dave Watson, who moves up to Comcast Cable CEO after serving as the cable unit’s chief operating officer for the past seven years, implementing the plans that he and Smit developed. Watson takes over just as subscriber growth is expected to decline in the wake of two massive storms that devastated homes in Houston and Western Florida. Comcast has said it expects the impact of Hurricanes Harvey and Irma to result in the loss of 100,000 to 150,000 subscribers in the third quarter.

MoffettNathanson principal and senior analyst Craig Moffett observed that the declines weren’t that surprising given that the video subscriber estimates, even at best-in-class Comcast, will have to come down.

Infrastructure Advantage
“We’ve spent 18 years repeating a simple mantra: Cable operators are not media companies, they are infrastructure providers,” Moffett wrote in a research note. “Their infrastructure is still advantaged. Comcast will be just fine.”

But the company is confident that it will continue to hit its financial targets, as well as continue its pace of innovation. For those reasons and more, Comcast is the 2017 Multichannel News Distributor of the Year.

For Watson, Comcast’s success has been the result of the company’s decision to stick to three basic tenets.

“The key for us is that we’re very focused on our core set of operating principles,” Watson said. “Staying focused on sustainable, profitable growth, driving innovation, that’s a big part; and third is to continue to improve the customer experience.”

While that may sound oversimplistic, Comcast has managed to make it work. In the past five years (2012-2016), overall revenue has grown at a 6.2% annual clip while cash flow has risen 7.2% per year. This year, the growth is even more dramatic — in the last 12 months between the first half of 2016 and the first half of 2017, revenue has grown 9.4% to $41.6 billion and cash flow is up 10.2% to $14.1 billion. This in a year that has seen competitive pressures increase as Hulu (25% owned by NBCUniversal) launched its Hulu Live offering, AT&T unveiled its over-the-top product DirecTV Now and networks are queuing up to release direct-to-consumer versions of their channels.

Comcast has used the X1 platform expertly in driving forward what Watson said is its newest mantra — becoming an “aggregator of aggregators.” That means not only offering access to subscription video on demand and over-the-top competitors, but embracing them.

Xfinity subscribers can access Netflix directly from their set-top boxes and over the years Hulu, YouTube and music service Pandora have been added to the lineup. Earlier this year, Comcast reached a deal where Sling TV — the over-the-top MVPD service from Dish Network — received a coveted spot on the set-top (mainly for international and multicultural programming). Just last week the cable operator expanded its relationship with YouTube, allowing customers to launch the online video app merely by speaking “YouTube” into their X1 voice remote.

Including those products is all part of the overall strategy of offering customers best-in-class products in almost every category, Watson said.

‘Aggregator of Aggregators’
“We look at each part of our business, every major product area, and we look at innovation opportunities at each one,” Watson said. “With X1, I think we are delivering in its early stages the promise of being an aggregator of aggregators — the best in linear, the best of on-demand, a terrific DVR, a great app, data and applications integrated. Netflix is a good example and soon-to-come will be You Tube. … To me this is constant improvement of our major product areas.”

That’s a far cry from the past, when a Netflix app embedded in any cable operator’s set-top box would have signaled the end of the world. But the evidence continues to mount that SVOD services like Netflix, Hulu and YouTube aren’t replacements for cable, but can complement the service. And making it easier for an X1 customer to access their SVOD subscriptions only enhances the cable operator’s stature in the customer’s mind.

That shift, along with a continued focus on innovation — Comcast still has a mandate to roll out a new product or product enhancement at least once per quarter — has been a key part of Comcast’s success. In the past five months, Comcast has rolled out a new wireless service, Xfinity Mobile, part of its mobile virtual network operator agreement with Verizon Communications; xFi, a cloud-based home WiFi management platform; and enhancements to XFinity Home that allow consumers to remotely control home functions like heating, cooling, lighting and security cameras through their voice remote.

The voice remote, launched in 2015, is one of those product enhancements that has fared even better than its staunchest proponents had hoped. Comcast has deployed about 17 million voice-remote devices and customers now make about 1 billion voice commands per quarter.

“It’s just remarkable,” Watson said of the product.

Comcast has also embraced products from programmers such as AMC Premier from AMC Networks and 21st Century Fox’s FX+, ad-free versions of the AMC and FX pay TV networks available for an additional fee. In an interview, Comcast executive vice president of Xfinity Services Matt Strauss said the offerings are part of an overall evolution of the video product, and of the strategy to entice customers to buy into the entire Xfinity family of offerings, not just one or two things.

Strauss said the strategy could be traced back to Comcast’s initial investments in infrastructure that laid the foundation for the product suite that is available today.

“We’re now at a point where it’s really about scale, and how do we continue to deliver innovative products and services and accelerate how we get deeper and deeper into our base,” Strauss said.

The answer, Strauss said, is to provide elegant, easy solutions to customer problems even before subscribers know they are problems. For example, as the TV audience became more and more fragmented and finding shows grew more difficult, X1 provided a user interface that made it easier to navigate through the thousands of linear and on-demand content choices. Later, X1 added a voice remote, which made navigation even easier.

For high-speed data, the solution was faster speeds. Comcast has increased data speeds 17 times in the past 16 years and by the end of 2017 will have fully deployed DOCSIS 3.1, which will enable speeds of 1 Gigabit per second.

“Speed is important, but access is equally important,” Strauss said. “Most people now connect devices via WiFi. Ensuring we have the best WiFi in the home, as well as the best WiFi out of the home is also very core to the strategy and that’s where you’re seeing us deploy our newest wireless gateway, the XB6 (xFi) which can deliver the fastest in-home WiFi speeds.”

From there, xFi customers would naturally migrate to Comcast’s XFinity Home product, which again incorporates the aspects of other company products, like the voice remote, to control household functions. Comcast is truly selling a bundle, and that bundle is interconnected.

“When we look at the future, today we typically sell on price,” Strauss said. “And the more products you take, the better the price. The challenge there is when you sell on price, essentially you’re making yourself a commodity.

“What we really want to transition to is selling an experience,” Strauss added. “The more products you take from us, you will of course get a better price, but you will also get a better experience. Starting to weave together the portfolio and reinforcing that, I think, is a big opportunity. A lot of that you’re going to see solidly around the home. There is a big opportunity around the digital home.”

The company is obsessed with giving more choice in the video-on-demand side of the business. “We’re breathing new life into what it means to get video,” Strauss said. “Now we have 130,000 choices, the top 100 Nielsen-rated shows, 900 series fully stacked. We added Netflix, not just as an app, but integrating Netflix contextually.”

As a result, on-demand is growing again — this year, Comcast customers are spending an average of 32 hours a month watching on-demand shows, up 20%.

“When people have said video is in a decline, ratings are in a decline, we see something different,” Strauss said. “We see more and more video consumption moving to time-shifting, we see while live ratings may be declining, the total video consumption is increasing, instead that more is happening outside of traditional measurement. It’s like dark matter, people aren’t seeing it, but we think the total video pie is increasing. And we’re continuing to build the platforms and the capabilities to all people to watch TV smarter and on their terms.”

The emergence of over-the-top players has added to that shift and is continuing to challenge the model, Strauss said, but Comcast doesn’t see any compelling reason to join the OTT fray.

“Part of what is happening in the market, especially on the video side, is you are seeing a lot of increased competition, you’re seeing a lot of competitive offers — in some cases you’re even seeing some of these OTT players offer video at negative gross margins. We’re not going to chase that.”

But the evidence is mounting that younger consumers are increasingly looking outside the traditional pay TV ecosystem for their content needs. Pay TV subscribers fell by more than 900,000 in the second quarter, the worst Q2 performance in history. That’s after a record first-quarter loss of more than 750,000 video customers.

Moffett, who raised his rating on Comcast to “buy” earlier this month after downgrading the stock to “neutral” in June, said he sees the company as the standard for the pay TV business. But he also estimated that the MSO will lose almost 1 million video customers in the next five years, ending 2021 with 21.7 million subscribers, down from 22.5 million in 2016. The analyst does see Comcast adding about 5 million broadband customers in that same time frame, finishing 2021 with 31.1 million high-speed data customers compared to 26 million in 2016.

Competition is also heating up. Google’s YouTube TV expanded to eight additional markets earlier this month, growing its total markets to about 48 cities. In addition, AT&T began pricing its DirecTV Now service even more aggressively in the quarter, at $10 per month for any unlimited wireless subscriber, and returned to offering free Apple TV devices with a three-month commitment.

While weakening subscriber metrics shouldn’t come as a surprise, Moffett said, they aren’t a calamity, either. Pay TV companies, he said, still have broadband pricing power, which should help them in reaching financial targets. That’s just what Comcast said when it predicted the Q3 subscriber loss.

Strauss noted that all the panic over OTT and cord-cutting could be unwarranted. There is no doubt, he said that viewing habits are changing, but life stages and household economics also need to be considered.

As an example, Strauss pointed to Xfinity on Campus, Comcast’s multiscreen managed IPTV service for college students. When the product was in development, Strauss said Comcast realized that the last thing college students wanted was to be tied to a set-top box. So the MSO had to rethink the idea, creating a product that allowed students to download the Xfinity Stream app, offered a cloud-based DVR and would let them watch live TV anywhere on campus. The product has been highly successful and, as students returned for the most recent fall semester, it is deployed in more than 100 schools.

“Millennials do watch TV as much as any other segment,” Strauss said. “They just have different needs and how they want to consume and access it.”

That, Strauss said, has led to Xfinity Instant TV — an in-home, in-footprint, managed IPTV service slated for a Q3 launch — as well as ad-free versions of networks that consumers can buy for a fee. Comcast reached a deal with AMC Networks in August for AMC Premiere, an ad-free version of the popular AMC network for an additional $4.99 per month. A month later, FX Networks announced a deal to offer an ad-free version of its flagship FX channel — called FX+ — to Comcast customers for $5.99 per month.

Strauss said those channels and other services like it are just an example of how Comcast’s foresight in investing in content, infrastructure and innovation have translated into meeting needs even customers didn’t know they had.

“The future we’ve always talked about has finally come, at least for us,” Strauss said. “I think that is because of decisions that we made, not six, 12 or 24 months ago, but years ago, based on where we saw the puck going and ensuring that we would have the technology capabilities and the infrastructure in order to deliver upon the innovation that we believed we were going to need to stay competitive. As a result you’re seeing us deliver on a lot of these products and services. But this didn’t happen by accident. It really happened because of very important strategic decisions we made years ago.”

Making his debut before analysts as Comcast Cable’s new CEO Thursday, Dave Watson pledged not to tinker with the pay TV juggernaut’s momentum, focusing his efforts on profitable growth, innovative products and services and constantly improving customer service.

Watson, who has been with Comcast since 1991, became CEO of the cable unit on April 1, after former CEO Neil Smit transitioned from day-to-day operations to vice chairman of Comcast Corp. Watson had most recently been chief operating officer under Smit, so the transition he said, was no major undertaking.

“I’ve been working with Neil on our strategy for awhile,” Watson said on a conference call with analysts to discuss first quarter results. “It’s no great surprise that I’m going to stay focused on what’s working.”

Watson takes the cable helm at a critical point for Comcast – it is launching a new wireless product, called Xfinity Mobile, and pay TV operators are facing a growing potential competitive onslaught from virtual MVPDs, 5G wireless and skinny bundles.

Watson doesn’t appear to want to take Comcast in a radical direction. On the call he said he would focus on profitable growth areas including business services, innovative products and customer service. On the customer service front, he said his goal is to take the customer experience to the next level, focusing on key moments such as when existing customers move or new ones come onboard.

“There is some real traction around that,” Watson said. “It’s good for customers and I think this is the right way to drive healthy and sustainable efficiencies.”

Watson said on a personal note, he will miss working closely with Smit.

“He was a great partner and a great boss,” Watson said. “However, I am excited about this next chapter and with a very good cable team, we are going to go after the opportunities in front of us.”

And one of the biggest opportunities is wireless.

Earlier this month Comcast unveiled its long awaited wireless service – Xfinity Mobile – taking advantage of its existing MVNO agreement with Verizon Communications. Currently in employee-only tests, the offering is expected to be available to customers throughout the footprint later in the year.

This isn’t Comcast’s first attempt at a wireless play. The company sold its Comcast Cellular business, which Watson formerly headed before joining the cable operation, in the 1990s and other subsequent wireless partnerships have failed. But Comcast chairman and CEO Brian Roberts said he had no regrets.

“The question of where wireless is, where it’s going, I think we’ve done a really good job of making sure that product is in our bundle,” Roberts said. “It’s going to be a fabulous value for customers with the brand new product.”

Roberts pointed out some of the more attractive features of the product – the combination of the cellular and Wifi networks, the ability to access Xfinity services by logging in just once and flexible packaging that allows customers to buy unlimited plans or pay only for the Gigabits they use.

“That gives us what we need,” Roberts said. “We are always looking at where future technologies are going and things of that nature, but right now we look at our results today compared to anything we’ve seen, I couldn’t be more pleased with the portfolio of our company and the trajectory we’re on.”

Other competitors like AT&T and Verizon have set the wheels in motion for the next generation of wireless technology – 5G – but Watson said Comcast is in no rush to follow them.

“The main thing about 5G is that it’s early,” Watson said. “We’ve been through this before. There are really promising aspects of new technologies, but it takes time to scale. While there may be early-stage applications of something like 5G, we compete today with microwave applications to MDUs and dense urban areas. We’re going to stay close to it, we’re testing some fixed mobile aspects of it. The main question for 5G for us is with its higher frequency range, can it broadly, reliably and economically deliver fixed wireless broadband? I don’t believe at this stage at all that it’s a significant threat on the wireless fixed broadband side.”

In the meantime, he said Comcast is not standing still, adding that DOSCIS 3.1will be available to about 65% of its footprint by the end of the year.  

In a major leadership move, Comcast said Dave Watson will become president and CEO of Comcast, succeeding Neil Smit, who will transition to a new role as vice chairman of Comcast Corp., effective April 1.

Smit, who will work closely with Watson to ensure a smooth leadership transition over the next few months, will then work part-time with Comcast leaders to “develop future technology-oriented business opportunities,” the company said.

Smit, formerly the CEO of Charter Communications and also an exec late of AOL and Nabisco, was named president of Comcast Cable in January 2010, and was promoted to president and CEO of the cable unit and EVP of Comcast Corp. the following year. Before his corporate career, Smit was a Navy SEAL, serving as a member of SEAL Team Six.

Watson, who joined Comcast in 1991, has served as COO of Comcast Cable since 2010, and has partnered with Smit in running the cable division since Smit joined the company. Prior to serving as COO, Watson has held several senior roles at Comcast, including those in product, sales, marketing and advertising.

Comcast, aided by the rollout of its X1 platform, has seen a steady improvement to its video business in recent years. The operator added 80,000 video subs in Q4 2016, enabling Comcast to add more than 160,000 video subs for the full year.

“Dave Watson is the perfect new leader of Comcast Cable,” Brian Roberts, Comcast’s chairman and CEO, said in a statement. “There are few people in the cable industry who have his breadth and depth of experience. Dave, along with Neil and the executive teams across the cable division, drove the operating strategy and execution that have led to phenomenal growth over the last several years as well as our focus on the customer experience and the improvements we have made recently.  Dave knows the business and has a track record of delivering results."

Roberts added: "Neil has been an extraordinary leader and has helped transform Comcast Cable into the top cable and broadband company in the nation.  He is not only an exceptional executive, but he is also one of the finest individuals with whom I have had the privilege to work. Neil and his team have created an innovation engine at Comcast Cable, with countless new and game-changing products and businesses.”

“It is an honor to take the reins from Neil,” Watson added. “ I can’t thank him enough for his partnership during the last seven years,” said Dave Watson.  “Neil has taught us all lessons in leadership, team building, focus, and execution.  He challenged us to reinvent the television experience; to grow video customers; to make Comcast video positive; to invest in our plant; to grow broadband customers; and, to build business services essentially from scratch.  And, he succeeded on all fronts.”

“Leading Comcast Cable has been a wonderful experience,” Smit said, in a statement. “Brian has been a terrific partner and I have the utmost respect and admiration for his vision, leadership, and drive. It has been an honor and privilege leading this team.  I know I am leaving Comcast Cable in great hands with Dave Watson as its new leader. As I approach 60, and for reasons related to the injuries I sustained in my previous career, I am looking forward to spending more time with my family while also helping Comcast find new growth opportunities.”  

While there are big questions about how well 5G signals can perform in the higher spectrum bands, Comcast’s fiber network plans fit well as a backhaul option with the emerging next-gen wireless platform, Neil Smit, Comcast Cable’s president and CEO, said Monday.

 “We feel good about our network,” Smit said at Deutsche Bank's 25thAnnual Media and Telecom Conference.

He said Comcast hired two outside independent experts to look at the operator’s fiber network plans and how they overlaid with 5G, and discovered that Comcast has “a lot of compatibility there, excellent compatibility…It is kind of uncanny."

RELATED:  A Beginner’s Guide to ‘5G’

While 5G might eventually factor into Comcast’s mobile plans, the technology is viewed as both a threat, as a platform that can provide alternative gigabit-class speeds to the home, and as an opportunity, particularly in the area of bolstering cable’s already growing cellular backhaul business.

RELATED: Fiber In The Sky (subscription required)

“We feel good about our plant being able to service 5G and the growth of our fiber network,” Smit said. “We are bringing fiber deeper every day in the business services space especially.”

RELATED: Liberty Global CEO: 5G 'At a 'Crossroads'

Bryan Kraft, analyst with Deutsche Bank, wondered if Comcast’s more widely deployed HFC network will have a role to play as well. Smit said that side of the network ledger will be “fine,” as Comcast continues to split nodes and deploy fiber deeper into its HFC plant. Notably, Comcast is being aggressive with a N+0 architecture in which it removes amplifiers from the network as it pulls fiber closer to the home and reduces the number of homes hanging off the node.

Speaking of HFC, Smit said the operator plans to have DOCISS 3.1 service available to majority of its homes by the end of next year, noting that Comcast is already using D3.1 to deliver gigabit services (in the downstream) in markets such as Atlanta, Chicago, Detroit and Nashville.

Smit also said Comcast plans to follow “over the next 24 months” with the introduction of Full Duplex DOCSIS, an annex of the spec that delivers multi-gigabit symmetrical speeds that will help MSOs deliver high-speeds in the downstream and upstream direction on HFC plant, without having to pull fiber all the way to the home.

RELATED: ‘Full Duplex’ DOCSIS Speeds  Ahead

Smit also touched on progress of X1, Comcast’s next-gen video platform that has helped the MSO return its pay TV category to growth.

He said Comcast has three times the DVR buy rate with X1, twice the PPV rate, and that X1 subs tend to have more outlets per home, which all help to deliver improved ARPU.

He said Comcast is getting 80 million commands from X1 voice remotes per week, and expects that number to grow to more than 5 billion commands over the course of 2017.

Comcast Cable CEO Neil Smit told an audience at the Deutsche Bank Media & Telecom conference today that the proliferation of over-the-top video competitors isn’t forcing the largest cable operator in the country to change its game.

Comcast is coming off one of its best year’s in a decade – basic video customer growth of 161,000 subscribers, the first time since 2006 the company showed positive growth in that metric, and its best high-speed Internet service growth in nine years. Last week, Comcast unveiled a link to YouTube content via its X1 platform set-tops and expects to launch a wireless service in the middle of the year.

“We know how to compete,” Smit said at the Deutsche Bank conference in Palm Beach, Fla. “The value of the bundle is a wonderful thing.”

Smit said Comcast’s concentration on growing its VOD content library has paid off -- customers have more than 100,000 VOD choices and 85% of its base use on-demand service and average of 20 hours per month.

Smit added the next part of the puzzle is improving customer service, a company mantra for years. While there is room for improvement, Smit noted that Comcast reduced service calls by 22 million last year and added 858,000 total customer relationships.

“It’s taking noise out of the system and it’s enabling us to operate more efficiently and effectively for the customer,” Smit said.

For Comcast Cable CEO Neil Smit, it’s always been about the team.

In each of the past jobs he’s held — as a cable company CEO, a marketing team leader at AOL and on a Navy SEAL team (he retired from the elite military unit as a lieutenant commander) — the most important aspect of the job has been the people that surround him.

That’s never been more true now as head of the Comcast Cable division for the past six years, Smith said. It was even obvious back when he first met with Comcast’s top brass — chairman and CEO Brian Roberts and then-chief operating officer Steve Burke, now the CEO of NBCUniversal — about possibly running the cable unit.

“My wife and I came out to meet Brian and his wife and Steve and [his wife] Gretchen Burke and the rest of the team and their spouses,” Smit said. “I asked her on the way home, ‘What do you think?’ She said, ‘I think they are good people with good values and you prefer working in a team environment.’ I felt the same way. That’s been the best part about being here, being able to work with that team day in and day out.”

Teams have been a big part of Smit’s career through stints at Nabisco, where he was a regional president, a five-and-a-half-year tour with the SEALs and at AOL, where he oversaw that company’s Internet access business. Smit also spent five years as CEO of Charter Communications, building up that midsized cable operator and steering it through a bankruptcy that freed up its crushing debt load and allowed it to invest in the business, a move that many believe laid the foundation for Charter’s success today.

He joined Comcast in 2010 as president of its cable unit (he was named CEO in 2011) and began setting the stage for what could be the first full year of positive video customer growth in a decade for the nation’s largest MSO. For that performance, Smit has been named Multichannel News’s 2016 Executive of the Year.

Related: X1: The Rocket Fueling Comcast Growth [subscription required]

‘LASER-FOCUSED’ EXEC

“Neil is one of the best and most thoughtful leaders I know,” Roberts said in an email message. “He’s smart, strategic and laser-focused on execution. He’s critical to our growth and evolution — driving our product innovation and transforming the customer experience.

“His passion, focus and optimism these past few years make him truly worthy of this wonderful and, in my opinion, very well-deserved recognition,” Roberts said.

Smit, in typical modest fashion, defers most of the credit for Comcast’s success to the cable company’s employees. But that sense of collaboration has been with him throughout his career, whether it be in the military, where the people that surround you make literal life-and-death decisions, to the business world, where the right team can mean the difference between success or failure.

“For me it’s less about the work and more about the people I get to work with,” Smit said.

But make no mistake about it, the work is important. Roberts crowed days after Smit was hired back in 2010 that the new cable division president came into the office on the weekend before he was officially supposed to start just to listen in on customerservice calls. It was a habit that Smit picked up when he was at AOL and brought with him when he took over Charter in 2005.

He still does that today, he said, adding that he makes all of his senior managers — including himself — follow up personally on service calls. When a customer gets a callback from Neil from Comcast, it could very well be Smit on the line.

Smit said he makes about three customer callbacks a week. “I think it’s important to stay in touch with the customer,” he said.

Keeping a sharp focus on the customer experience has been Smit’s mantra since he came on board, and it has paid off in spades for Comcast and its investors.

In the six years that Smit has been head of the cable unit — which accounts for more than 60% of Comcast’s total revenue and more than 75% of its cash flow — Smit has consistently improved the video and high-speed data businesses. In those six years, Comcast has improved video customer losses in 25 of 27 quarters, a pace that Smit picked up from Burke when he ran the cable unit, and high-speed data customers have increased nearly 30% in the same period.

At the same time, cable unit revenue has risen 33% since Smit joined in January 2010 and cash flow has improved by 35%.

That customer focus and the power of its state-of-the-art operating platform, X1, has led to six consecutive years of improved video subscriber losses. This year, Comcast is expected to report its first full year of video customer gains in a decade, with most analysts predicting the cable operator will add at least 100,000 basic video customers for 2016. It would be the cherry on top of a six-year period in which basic video-subscriber losses have been reduced 21-fold, from 756,000 in 2010 to just 36,000 in 2015.

Smit will give most of the credit to his team, a seasoned cadre of executives that includes executive vice president and chief operating officer Dave Watson; and president, technology and product Tony Werner, as well as the thousands of frontline employees under them who have served as the foundation for Comcast’s success.

“From an operations standpoint, he has a great appreciation for detail, but he lets his team go ahead and get the job done,” Watson said in an interview. “He has a tremendous focus, but he lets you get the job done.”

MoffettNathanson principal and senior analyst Craig Moffett agreed.

“His real success comes not just from the fact that he’s a smart guy, but because he’s an exceptionally good leader,” Moffett said. “Comcast over the last five years has really upgraded its talent immensely. It’s a double-edged sword — an organization with lots of talent can easily become unwieldy unless you have a good orchestra leader who’s able to make everybody play together. That’s really where I think he has distinguished himself.”

GOAL-SETTING FOR INNOVATION

Straight out of the box in 2010, Smit challenged Comcast employees by setting a goal of at least one new product or service enhancement per quarter. Nearly 24 quarters later, the company has released dozens of new offerings, including Xfinity on Campus, a service that lets college students watch live TV and on-demand content on IP-enabled devices while at college; various “skinny bundle” offerings; multiscreen streaming video-on-demand offerings such as Stream TV; and others.

While Comcast has excelled on all product fronts — it added about 8.4 million broadband customers since 2010 and its X1 operating platform is considered by many to be the gold standard for the industry — video has been at the heart of the company’s cable success, dating back to Roberts’ efforts years earlier to bolster its on demand libraries and rights.

“At a time when everybody else in the industry was starting to coalesce around the vision of broadband first, Comcast kept their eyes on the prize of video,” Moffett said. “They never lost their enthusiasm for video as the core product. That’s not to say they didn’t invest in broadband, but they always saw themselves first and foremost as an entertainment company.”

Smit said he knew from the start that he and Roberts were on the same page.

“What’s great about working for Brian is he’s in it for the long haul,” Smit said. “He invests in the future, he believes in growth, he’s entrepreneurial and he’s up for new opportunities and new challenges. I’m a big believer in continuously looking for growth opportunities, whether it’s in people or platforms or technologies. We have a really good relationship.”

Video is just as important today, fueling new entrants in the SVOD and OTT space, as well as providing added fodder for mobile products from a wide range of competitors.

But programming alone won’t keep customers loyal, especially in today’s environment. Smit said that Comcast realized at the outset that it was the overall customer experience which fostered that loyalty. Early on Smit, Roberts and the rest of the Comcast team moved to drastically improve customer service, he said.

The efforts started out small. Comcast first guaranteed one-hour appointment windows for service calls and allowed customers to track technicians via an Uber-like app, for example. In 2015, Roberts unveiled an ambitious three-year, $300 million plan to build three new call centers, hire 5,500 customer-service representatives and revamp Xfinity retail stores across the country.

Smit said that the idea is to get staffing to the proper level — he defined that as having the right people taking the right service calls — which allows customer issues to be resolved more efficiently. That includes putting the right tools in the hands of both customers and service reps, including a knowledge-based system that prompts the best agent response to customer problems, overlaid with artificial intelligence that should improve the quality of responses even more. On the technician side, Comcast gives its workers better diagnostic tools to identify problems.

Even the network is getting in on the act. Comcast’s network is smarter, Smit said, allowing the company to restart a customer set-top box remotely to solve problems before they occur.

“We’re getting smarter — we’re getting more information from the set-tops and modems that we can leverage to make a self-healing system,” Smit said.

Comcast has also built call centers in Albuquerque, N.M., Spokane, Wash., and Tucson, Ariz., and has plans for additional call centers in Charlotte, S.C. and Fort Collins, Colo. Comcast also has hired many of the targeted 5,500 workers and has added additional enhancements to its service including access to Netflix service on its X1 set-tops.

“We can turn pretty quickly when we all get aligned around a product or a major initiative like this, the customer experience,” Smit said. “We do big things well.”

The numbers also speak loudly. In the third quarter, customer-service calls were down about 14% and Comcast’s on-time arrival rate for technicians improved to more than 97%. First call resolution of service issues improved by 7% and the company’s response time on social media channels has improved by 95% during the same period.

The Netflix addition to X1 was a milestone, as the SVOD pioneer has largely been considered to be a direct competitor to cable and a key contributor to the pay TV industry’s woes over the past few years. But Smit said the decision to incorporate the Netflix app on X1 boxes was easy: It was all about ease of use.

“I spoke with [Netflix CEO] Reed [Hastings] about six months before we got the product out and we got a deal done and released the product in that period of time,” Smit said. “The speed at which new content or new features or functions come out, you need to have the platforms in place to do that. In order for the cable industry to compete longer-term, it needs to have great content as well as a great user interface.”

NEXT UP: WIRELESS

Comcast’s next big investment likely will be tied to its next big product, a wireless offering slated for mid-2017 that will be created through an existing mobile virtual network operator agreement (MVNO) with Verizon Communications. Comcast created a wireless business unit earlier this year — Comcast Mobile, headed by former executive vice president of sales and marketing Greg Butz — to address the new product.

Comcast hasn’t given any details on the new product, and Smit wasn’t about to buck that trend. But he did say that mobile continues to be an important area for the company.

“We think leveraging our 28.5 million customer relationships, our 15 million WiFi hotspots and our Verizon MVNO is a good value and will continue to reduce churn,” Smit said. “[Customers] want more value and we think we can add value with the launch.”

Comcast has been less optimistic about over-the-top pay TV services. It has said it can’t see a viable business model there, even as services proliferate like Sling TV, DirecTV Now and Hulu’s planned OTT service slated for next year. Comcast is a part owner of Hulu through NBCUniversal.

Smit echoed Roberts’s sentiments on the issue, adding that for Comcast the economics of OTT are simply not as clear as in other products.

But the operator does see potential and value in one key component of OTT — the broadband network. Comcast has increased data speeds 17 times in the past 15 years as broadband consumption has increased 40% to 50% each year. Comcast has invested in new capacity, routers and DOCSIS 3.1, which promises Internet speeds of 10 Gigabits per second. On the programming side, NBCUniversal spent $3.8 billion to purchase DreamWorks Animation, a move that will add significantly to its content capabilities.

For Smit, those moves are merely another opportunity for collaboration and another chance for the team to prove its mettle.

“Brian and the team of us feel we can invest in the future of the company,” Smit said. “It’s a belief that the team can execute on those investments.”

Related > 'MCN' Exec of the Year Neil Smit: No Team, No Dream [subscription required]

With the prospect of its first full year of positive video subscriber growth staring it in the face, Comcast can point to many factors that have helped push the operator over the hump, but none perhaps with as much impact as its state-of-the art operating platform, X1.

Comcast introduced X1 in 2012 and to date it is available in about 45% of the cable company’s footprint, reaching 50% by the end of the year. With X1, Comcast customers get a state-of-the-art user interface, cloud digital video recording, home-streaming capabilities and other features, like an interactive voice remote. Those features have proven to be popular with customers.

For the cable company, the X1 architecture allows it to more easily overlay new services and products, essentially via software downloads from the cloud.

X1 also is having a big impact on customer retention and the uptake of new services. Customers of the platform are less likely to churn, DVR take rates for X1 users are about 3 times that of non X1 customers and X1 users are twice as likely to buy pay-per-view products.

FROM PLANS TO REALITY

Comcast Cable CEO Neil Smit said that X1 was still in the planning stages when he joined the company in 2010, adding that the platform dovetailed nicely with Comcast’s emphasis on video and the renewed focus on the customer experience.

In its final iteration, X1 had all the bells and whistles associated with new technology rollouts. But Smit said that at its core, X1’s message is simple.

“We invested in X1 and the on-demand content and the different platforms at a time when there was not a lot of significant investment going on,” Smit said. “Video is about great content but also about ease of discovery of that content — if you have great content and make it easy to find and you bring up new recommendations of things. We believed from the beginning we could achieve that.”

X1 was a collaborative effort from the beginning, Comcast executive vice president and chief operating officer Dave Watson said.

“One of the first things he did was prioritize the list,” Watson said in an interview. “We had so many things going on, a lot of promising things that were emerging post the early stages of DOCSIS — more VOD, all the standards we had invested in. The infrastructure stuff was for the most part coming to an end, but the product stuff was not. That’s where Neil came in and helped prioritize. X1 was at the top of the list.”

Watson added that in addition to X1’s chief architect — technology president Tony Werner and his team — Smit brought in other disciplines and executives to help shape the product.

“One of the things Neil did, he included [Comcast chairman and CEO] Brian [Roberts] in a lot of the early iterations of feature design,” Watson said. “A lot of others that were engaged — the marketing team, the rest of Tony Werner’s engineering team, there were a lot of people that were very focused.”

That sense of collaboration has been part of Comcast’s DNA for years, Watson said, but it was especially evident in the formation of X1.

INCLUSIVE PROCESS

“It goes back to that belief that an effective team gets better results,” Watson said. “You don’t roll out things at scale of this magnitude without having great teams on it.”

That kind of collaboration also led to one of the X1’s most popular features, the voice remote. The remote, which allows customers to search for shows and launch apps with voice commands, is one of the most popular features of X1. To date, about 10 million voice remotes have been deployed to Comcast customers.

Watson said Roberts championed the voice remote. “The engineering team had developed the capability, but Brian was focused on [the idea] that this could be special,” he said. “Neil then brought it to a whole other level. Neil got with his team and said, ‘Let’s scale this.’ And that’s what happened.”

Comcast recently incorporated the Netflix app into the X1, allowing for subscribers to the SVOD service to more easily access it. While that may have been unheard of several years ago — Netflix is considered a cable competitor by some — Smit said it fits in with Comcast’s overall philosophy.

“We’re all about saving the customers’ time,” Smit said. “Their time is precious and we have to respect that. The Netflix integration was saving the customer’s time; it was making it more convenient for them. They didn’t have to switch over to input B, they could just speak into their voice remote and say ‘Find Orange is the New Black.’ It was grounded in making the customer’s life more convenient and saving them time.”

The X1 has received rave reviews: Geekwire called it an “Escalade,” referring to the high-end Cadillac SUV. And Comcast doesn’t plan to keep the operating system to itself. It has already licensed X1 to two cable operators, Cox Communications in the U.S. and Shaw Communications in Canada, and hopes to add more licensees in the future.

WORKS FOR COX, TOO

At Cox, which markets X1 as New Contour, the platform has lived up to and exceeded expectations, executive vice president of product development and management Steve Necessary said.

Cox began rolling out New Contour in one market with 3,000 customers at the beginning of the year; by April, it was deployed in all 21 of the cable operator’s territories. By the end of the year, Necessary said Cox expects to have nearly 600,000 New Contour customers.

Because Cox has had the product less than a year, the operator hasn’t seen the full impact of the platform yet. But he said the company has seen a reduction in early life churn and customer satisfaction has risen. Necessary said New Contour has resulted in higher Net Promoter Scores — a more than 20-point lift for X1 users. And VOD usage has roughly doubled for X1 customers.

“The metrics we have to date are very positive and support or exceed our business expectations,” Necessary said. He expects the growth trajectory in 2016 to continue into next year.

Comcast chairman and CEO Brian Roberts didn’t offer any new news regarding the cable operator’s plans to launch a new wireless product next year, but added he thinks it will be a money-maker.

Comcast said last month that it expected to launch a wireless offering by mid-2017, building on its mobile virtual network operator (MVNO) agreement with Verizon Communications.  Comcast has been tight-lipped about what that product will be, but has formed a Mobile division, tapping former EVP of sales and marketing operations Greg Butz to spearhead the effort.

On a conference call with analysts Wednesday (Oct. 26) to discuss third quarter results, Roberts said there was no new news to offer on the product. 

“We fundamentally believe we can make money for the shareholders through a wireless offering with the unique relationship we have with the Verizon MVNO,” Roberts said. “We have the ability to do things that we believe make that statement come true and can create real value for shareholders along the way.”

Related:NBCU’s Burke: ‘Healthy Skepticism’ That OTT-TV Will Draw Subs by the Millions

Comcast Cable CEO Neil Smit added that other operators – particularly Rogers Communications, Telenet and Virgin Media – have used wireless to reduce churn and increase the customer’s lifetime value.

“In a way we’re already in the wireless business,” Smit said. “We deployed millions of wireless gateways and the WiFi service in the household is the fastest in the market. I think by leveraging [Comcast’s] 28 million customer relationships, the 15 million hotspots and the MVNO we can offer a really excellent service.”

Though the market is being flooded with new virtual MVPDs that are targeting the 20 million U.S. homes that don’t  subscribe to a pay TV service from a traditional provider, it’s unlikely that these new entrants will drive massive volumes, at least in the near term, NBCUniversal’s top exec said.

RELATED: DirecTV Now to Cost $35 Per Month

“The real promise of some of these new over-the-top entrants is that they would deliver incremental subscribers, which obviously would be good for the content side of the company,” NBCU CEO Steve Burke said Wednesday (Oct. 26) on Comcast’s Q3 earnings call. “I think we all have a healthy degree of skepticism that these new over-the-top entrants are going to create millions and millions and millions of subscribers anytime soon." 

While new entrants are taking a fractional share from existing MVPDs, most consumers, Burke said, still find value in their cable, telco or satellite TV service and aren’t looking to change.  

“I think there could be a modest positive for NBCUniversal,” he said with respect to the new OTT entrants.  

Comcast, meanwhile, has repeatedly argued that the economics of an OTT-TV service don’t add up.

RELATED: Roberts: ‘OTT Economics Are Unproven To Us’

Instead, Comcast has been focused on an in-market strategy with its cloud-powered X1 platform, which is testing an integration of Netflix ahead of a commercial rollout that will kick off later this year.  Notably, Comcast will be “upselling Netflix” as it would with premium networks such as HBO or Showtime, company chairman and CEO Brian Roberts said.

Neil Smit, Comcast Cable’s president and CEO, said the MSO will continue to target and segment how that platform is used, citing examples such as Xfinity On Campus (for college students), X1 double-play bundles, as well as Stream, a mobile-focused, slimmed-down pay TV product targeted to cord-cutters that is being tested in a few markets.

“We will continue to innovate on X1,” Smit said. “I think there's going to be more flavors and more competition, but we'll compete aggressively." 

Comcast secured about 948,000 net adds to X1 (new and existing customers) in Q3, and ended the period with about 45% of its video sub base on the platform, which has been driving higher customer satisfaction, DVR activations, home outlets, and twice the pay-per-view spend of non-X1 subs.

RELATED:Roberts: Comcast Can Make Money on Wireless

Smit also noted that 50% of Comcast video subs are using TV Everywhere, up from 30% last year. Those customers are also averaging 10 hours per month of TVE viewing, he added, noting that the platform now supports about 130 live streaming channels and more than 40,000 VOD selections.

As for in-home video, Comcast is pushing toward an all-IP migration over the next couple of years. “We have the product in the lab and it’s working well.”

And while customers might not care if video is entering the home as IP, the more important piece is the quality of the service and how it can improve the “onboarding” experience, Roberts said.

On that, Roberts pointed to the Xi5, Comcast’s first set-top that supports video-over-WiFi, meaning a traditional wired cable outlet is not required.

“The onboarding of that box is so different than any box we've ever had,” Roberts said, adding that the MSO is pursuing a connection/installation goal of two minutes “with a few simple keystrokes.”

The Xi5 is also the first Comcast box to support High Dynamic Range (HDR). The Xi6, a box that will be wireless and support 4K and HDR, is also in the works.

Comcast still hasn’t revealed a new sub number of Xfinity Home, its smart home/security product. It announced that it pushed past the 500,000 sub mark about a year and a half ago, and “it’s grown significantly from there,” Smit said.

RELATED: Why Comcast Is Buying IControl 

He said 55% of Xfinity Home subs are new to Comcast, and that 60% of Xfinity Home customers get a quad play (video, high-speed Internet, phone and home security/automation). “It’s a very sticky product,” Smit said.

Comcast added 330,000 high-speed Internet subs in Q3, extending that total to 24.32 million.

Smit said there’s about 6 million DSL subs in Comcast’s footprint. “We see plenty of room for growth.”

There are no barriers that would prevent Comcast from building and deploying its own OTT-TV service, but the MSO remains unconvinced that the model strikes the right business chord, Neil Smit, president and CEO of Comcast Cable, said Wednesday on the company’s first quarter earnings call.

Smit was responding to an analyst question about a set of new OTT services coming later this year from AT&T, including “DirecTV Now,” a service that aims to largely replicate the traditional DirecTV pay TV offering.

“There’s no reason we couldn’t do something very similar from a technology perspective or a rights perspective,” Smit said. “We would just have to go get the rights to deploy the product.”

But Smit, who said last year that Comcast is “comfortable” operating in its own footprint as it expands the reach of its next-gen X1 platform, also cast doubts that going OTT is the right approach.

“We, thus far, haven't seen an OTT model that really hunts,” he said. “But we'll continue to stay tuned into the market and be prepared to respond accordingly." 

Thanks to X1, Comcast continues to make progress on the video front, as it added 53,000 video subs in Q1 2016.

Comcast said nearly 35% of its 22.4 million video subs are now on X1, and that it added 1.1 million X1 subs to the mix in Q1, a 53% increase on net adds versus the year-ago quarter.

Comcast SVP and CFO Michael Cavanagh said 86% of X1 subs are watching Xfinity on Demand monthly, and are viewing 25 hours per month on average. “We believe [X1] is a real competitive differentiator,” he said.

He also said 42% of video subs are using Comcast’s TV Everywhere app monthly, and are viewing about seven hours per month on the authenticated platform. “We think this adds great utility to our video service.”

The discussion also turned to the FCC’s proposed set-top box rules, with Comcast reiterating its opinion that it believes a market-driven, apps-based economy is better than another government mandate.

Last week, Comcast launched the Xfinity TV Partner Program, which will enable retail CE partners to offer an app that delivers the MSO’s full suite of pay TV services. Samsung is the first TV maker on board, and  Roku is set to offer the Xfinity TV app on its streaming platform.

“Set-top boxes will continue to be part of our ecosystem, as will apps,” he said.

Smit also took exception to the FCC’s skeptical reaction to the program, saying he thought it was “uncalled for.”

“I thought their reaction was unnecessary…I think we are working hard with our partners,” he said, noting that more than 40 companies have called Comcast to sign up since the program was introduced.

Smit also downplayed the competitive threat posed by 5G, which is sometimes viewed as a technology that could serve as a complement or replacement to wireline-based broadband services.

“5G is an exciting new platform,” he said, but noted that it’s still “early days” for the technology and that its propagation distance and ability to pass through objects like trees and buildings leave something to be desired.

Still, Comcast, he said, is “well positioned” because it can help out with other elements required for 5G deployments, including space, power and backhaul.

Comcast chairman and CEO Brian Roberts received $36.2 million in total compensation in 2015, a 10% increase over the prior year, according to a proxy statement filed Friday.

Roberts, who received $32.9 million in compensation in 2014, stayed relatively level on the annual base salary ($2.9 million), stock awards ($5.4 million) and option awards ($5.4 million) fronts, with the biggest change coming in pension value and deferred compensation earnings.  Roberts received $8.7 million in deferred comp and increased pension value in 2015, compared to $6.5 million in 2014.

But Roberts wasn’t Comcast’s highest paid executive – that honor went to new chief financial officer Michael Cavanagh, who joined Comcast in January, replacing former vice chairman and CFO Michael Angelakis, who resigned last year. Cavanagh took home $40.6 million in total compensation, including $16.5 million in stock awards and $11.9 million in “other” compensation, mainly deferred comp.

Other Comcast execs fared better. Comcast Cable unit CEO Neil Smit received $27.9 million in total compensation in 2015, a 21% increase over the $23.1 million he received in the previous year. And executive vice president David Cohen took home $17.9 million in total comp, a 33% increase over the $13.5 million he received in 2014.

NBC Universal CEO Stephen Burke made $33.7 million in 2015, slightly less than the $33.9 million he took home in 2014.  

Angelakis, who resigned in June but stayed on to help with the transition to a new CFO, received $20.2 million in total compensation in 2015, a 7% increase over the prior year. Angelakis became CEO of Atairos Group, an investment fund backed by Comcast in January. Atairos recently made its first major investment, $250 million for a stake in Internet company Groupon.