Roberts: Tensions Could Rise On Programming Costs

Comcast chairman and CEO Brian Roberts weighed in on programming costs increases at an industry conference Tuesday, adding that programmers are searching for alternatives to the age-old practice of selling bundles of popular channels with less watched networks.

“I think you're going to see real tension around, ‘Is that sustainable? Is that a product that shrinks?’” Roberts said at the Morgan Stanley Technology, Media & Telecom conference in San Francisco. “One of the reasons we bought NBCUniversal was to be on both sides of that conversation.”

Roberts added that he had no concrete answers to the problem of rising programming costs – Comcast has averaged increases of between 7% and 10% annually for the past three-to-10 years and this year the increase is expected to be slightly higher. But he said programmers are recognizing there is a problem.

“Is the pendulum swinging?” Roberts asked. “I think there is a real awareness by many of the programmers that we have to create alternatives for consumers and not just make it a binary decision, all or nothing. That’s an ongoing conversation.”

Roberts praised Comcast Cable CEO Neil Smit for refocusing the company after it abandoned its merger with Time Warner Cable in April.

“I credit Neil Smit for one of the best leadership calls to action I have ever witnessed,” Roberts said, adding that the Cable unit CEO made improved customer service the company’s main goal. As a result, Comcast has more video customers today than it did a year ago, has reduced churn, increased on-demand usage and launched new technology like its voice remote.  Roberts said that about 5 million voice remotes have been deployed into customer homes. He added that the goal going forward is to allow customers to make every single transaction with the company over a mobile phone if they so desire.

In addition, Comcast has rolled out its X1 platform to about one-third of its footprint, and should have it available to half of its service area by the end of the year.