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Roberts: Sharper Focus Works

Comcast chairman and CEO Brian Roberts told an industry audience Wednesday that the cable giant’s sharper focus and concentration on improving its broadband, cable and content offerings have helped drive some of its best results in nearly a decade.

Speaking at the Goldman Sachs Communacopia conference in New York, Roberts pointed to performance at its NBCUniversal businesses (where cash flow has nearly doubled since Comcast took control more than four years ago); its cable operations (where subscriber metrics were its best in nine years) and improved ratings at its NBC broadcast unit.

Roberts said that when Comcast first took the help at NBCU, the broadcast unit had no retransmission consent revenue, affiliate fees for its networks were below peers and advertising rates were 15% less than comparable networks, what he said the company called the “entitlement gap." Now NBC broadcast has had two straight years as the No. 1 rated broadcaster in the 18-49 demographic, retrans fees are pacing up and with improved ratings comes higher advertising rates, as was evident in a strong upfront and scatter market.

Now, despite the added threat of over-the-top television services and skinnier bundles, Roberts added that Comcast is well positioned for growth.

“We had the best Q2 in nine years – it was still a loss; we’re not declaring victory," Roberts said, adding that innovative products, lower churn and a renewed focus on improving the customer experience shows that its "sharper focus is working.”

On the innovation side, Roberts pointed to Comcast’s X1 operating system and its talking remotes, which he said Comcast is deploying at a rate of more than 70,000 per month. Comcast is continually improving its products – the company is working on a new feature in the talking remote that when a person speaks Spanish into the device, the program guide on their TV automatically converts to Spanish as well.

“We’re going to be able to do things that nobody else has done,” Roberts said. “I think the innovation is going to continue and this roadmap of differentiating ourselves is a huge opportunity.”

As far as over-the-top video goes, Roberts said better over-the-top products require faster broadband service, which helps the cable operator.

“Video over the Internet is more friend than foe,” Roberts said, adding that give Comcast’s unique assets and network, the company is in a strong position at the new crossroads between media and technology. “The more you rely on video, you need WiFi, you need broadband. We want to be the fastest and best network.”

Comcast also used the conference to officially introduce its new chief financial officer Michael Cavanagh, who joined the company about 100 days ago. Cavanagh said that programming costs are expected to continue to rise at their current pace for at least the next two years. But he said Comcast’s practice of securing additional rights, especially on demand  and mobile rights, in each of its programming deals is a key competitive weapon.

“We continue to invest in what the pay TV bundles are all about,” Cavanagh said.

Roberts added that when looked at closely, when you add up most over-the-top bundles, they end up being more expensive and offer less than the most popular cable bundles.

“We continue  to want to add more capabilities, more wireless rights, more out-of-home rights, more ease of use, more back seasons, more episodes, so that when you buy a subscription and its really clear what you get,” Roberts said. “I think that hasn’t been the case over the past five years; it’s been evolving to something. This conversation that is happening right now only is going to accelerate that. I do think on the other side, however , there is a realization that you can’t keep raising prices forever and [without] either having serious margin change or people saying ‘I’m going to live without some channels.’ I think you’re  seeing that tension rise. I think these things have a way of correcting or balancing out before something draconian happens. I’m hopeful that is the case.”