Is Comcast Trolling For Content?

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Comcast chief operating officer Steve Burke gave some fleeting hope to
deal brokers at an industry conference Wednesday, stating that the
cable giant would take a hard look at content deals, while also saying
Comcast has no plans to make make any transformational deals.

Burke, speaking at the Bank of America Merrill Lynch Media,
Communications & Entertainment conference in Marina del Rey, Calif., said
that while some companies have decided to separate their cable distribution
business from their cable content holdings (a la Time Warner Inc. earlier this
year), Comcast believes that the two can work harmoniously together.

Steve Burke of Comcast

He pointed
to News Corp. and Liberty Media as successful content companies that also have
distribution arms -- News Corp. with British Sky Broadcasting and Liberty with DirecTV.

"You really can create a lot of value by putting content and
distribution together, particularly of the content is cable content," Burke
said. "When you look at the big media companies, the best businesses that all
of us have in the entertainment business are cable content channels, which have
a dual revenue stream. I think we would not be doing our job if we weren't
trying to figure out how to get bigger in those businesses. If the opportunity came
about where we could add cable content to our portfolio, I think we would do
it."

Burke estimated that about 95% of Comcast's business is
cable distribution with 5% coming from video and internet content. Among
Comcast's programming assets are cable channels E! Entertainment Television,
Versus, The Golf Channel, several regional sports networks and G4. The company
also is a investor in The Style Network, TV One and PBS Kids Sprout.

While Burke did not identify any potential targets, Comcast
has been reportedly among the early bidders for the Travel Channel and is perennially among the candidates when any programming or cable asset
comes up for auction. The company has also been named as a possible suitor for
NBC Universal which, according to Broadcasting & Cable, is reportedly making moves to change its
ownership structure. 

But Burke stopped short of claiming that Comcast was gearing
up for a buying spree, adding that Comcast is not looking to do a major deal.

"I don't think that means doing a big deal with our stock,"
Burke said. "I also don't think that means doing a big $50 billion acquisition.
I think it's more trying to find opportunities that are complementary with our core
business."

Burke essentially put the damper on any speculation that it
would be hunting for more cable systems in light of the repeal of the 30%
cable ownership cap
.

Burke said that adding scale doesn't mean as much to the
company, which currently has 24 million subscribers, as it did 10 years ago
when it had 8 million customers.

"We would like to get bigger if the economics were right,"
Burke said. "Its pretty hard for me to see how there would be synergies on the programming
side or on the hardware side when you go from 24 million subscribers to 27 [million]
or 30 [million]. Ten years ago, we looked at it and said in the world we see
coming, we need some scale."

Burke said he sees considerable growth in the business as it
stands today, noting that commercial services could represent $2.5 billion in
revenue alone by 2012.

Steve Burke and Brian Roberts of Comcast

He also sees substantial growth remaining in so-called
maturing products like high-speed Internet service, which he believes will
accelerate once its DOCSIS 3.0 products begin to be more widely available.

Burke said that Comcast currently has 15 million high-speed
Internet subscribers out of a footprint of 50 million homes. That service has
the potential to add between $2 billion and $3 billion in revenue over the next
three to five years, he added.

Burke also said ongoing initiatives like TV Everywhere --
currently in trials with about 5,000 customers -- and interactive advertising
also should add to the value of the company.

He said the TV Everywhere concept should go
national in the next 30 to 60 days and has about two dozen programmers already
participating.        

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