Comcast may be celebrating its 50th anniversary this month, but chairman and CEO Brian Roberts isn’t spending a lot of time looking back. He’s much more interested in trying to figure out what’s in store for the company his dad, Ralph Roberts, built up over half a century.
In fact, the company’s new slogan — “Welcome to What’s Next” — embodies Brian Roberts’s attitude about moving forward.
“It’s a phrase that is constantly on my mind,” Roberts told Multichannel News earlier this fall. “Where do we go from here? We are growing in so many different ways and the opportunities are tremendous and lots of fun.”
JOURNEY FROM TUPELO
Founder Ralph Roberts, Julian Brodsky and Dan Aaron embarked on a journey in the fall of 1963 that would turn one small cable system in Elvis Presley’s hometown of Tupelo, Miss., into one of the world’s largest and most successful media conglomerates. The three men had different personalities and skill sets, but together they built a terrific car.
Indeed, in his 2001 memoir, Take the Measure of the Man, co-written by David A. Long (Veritas Press), Aaron said Brodsky was always stepping on the gas; Aaron was always pounding on the brakes; and Roberts was calmly steering the wheel. It sounds chaotic, and even a bit dangerous, but it worked.
Ralph Roberts always had a vision that was bigger than his company at the time. “When we only had five or six employees, he was always drawing up tables of organization with 30 or 40 people,” Aaron wrote in his book. “When he had 30 or 40 people, he was making organizational charts for 100 people. He was always looking at the future.”
Roberts’s son, Brian, who is now at the wheel, has the same proclivities. The car his dad drove has been supercharged and Roberts has assembled a strong pit team that makes sure its engine runs smoothly at breakneck speeds. He is always thinking about what’s around the next bend in the road and is not shy when it comes to taking risks.
The younger Roberts was at the helm in 2001, when Comcast outwitted several wellheeled competitors to acquire AT&T Broadband, and in 2009, when he bargained for a controlling interest in NBCUniversal.
Comcast has become a leading adopter and developer of new technologies that afford customers more ways to use its network or consume more of its content. “We change every day, and we take what’s working and keep improving it,” Brian Roberts said. “The key to success is to continue taking chances or risk getting run over.”
ENTERING GENERATION X1
The younger Roberts’s latest gambit is more of a technology play than a big business deal, but it is no less strategic. Comcast’s X1 platform could transform the cable industry, giving operators a standards-based, upgradable platform to launch the industry’s next generation of products and services. It expects to have the technology available in all its markets by the end of the year.
Comcast is now also talking to other operators about licensing the X1 technology, a move executives believe will better prepare cable to compete against its telephone and satellite rivals. Brian Roberts is also a big believer in cloud technology, a key piece of X1.
“Our video business is really exciting,” he said. “I believe you’ll see more innovation in the next five years than we’ve seen in the last 50. Most of the innovation will be on our X1 platform, and it will be great for customers.”
Roberts may see good things down the road for Comcast (this year’s Multichannel News Operator of the Year), but the company has had a pretty good run leading up to tomorrow’s opportunities. Cable revenue has grown an average of 6% per quarter for the past 10 periods, as its publicly traded peers struggled to eke out an average of 4.7% growth over that span. At the same time, Comcast has averaged 6.8% operating cashfl ow growth over the period, compared to an average of 1.17% for the other publicly traded MSOs.
The company has trimmed its video subscriber rolls, although it missed analysts’ targets in the third quarter. It has been a leader in telephony, adding 372,000 new voice customers this year alone. That also holds true for high-speed data, as Comcast has signed up some 620,000 cable-modem customers this year.
Comcast went public on June 30, 1972, at $7 a share and the stock has had quite a run. According to Brodsky, the company’s retired vice chairman, 1,000 of those $7 shares would be worth more than $6.5 million today.
Shares of the company’s stock traded at lifetime highs and the stock has rallied 29% in 2013, outperforming the rise in the Standard & Poor’s 500 Index during the same period. Comcast’s Class-A shares closed Nov. 11 at $47.35, close to its 52-week high of $48.90 earlier this year.
The company is currently valued at $100 billion, according to The Philadelphia Inquirer. Comcast processes more than 1 million job applications a year and is currently home to more than 129,000 full- and part-time employees.
It’s diffi cult to create a family environment in an enterprise of that size, but Brian Roberts and his lieutenants work hard to make sure people have positive career opportunities from day one through retirement. The company routinely rotates staffers to different departments so they can receive a well-rounded base of knowledge about the business.
When Comcast took over NBCUniversal two years ago, then-chief operating officer Steve Burke (now CEO of NBCU) met with NBCU staffers in a Town Hall and talked up the potential of combining NBCU content with Comcast’s distribution and technology assets. He predicted in a chat with NBC Nightly News anchor Brian Williams that it would soon be clear Comcast is “a company people are glad to be a part of.”
Comcast’s foundation is based on video subscribers, and a lot of attention is still paid to how many customers are gained or lost each quarter. But video is beginning to take a back seat to other parts of the business.
Brian Roberts is convinced that in the not-too-distant future, Comcast will have more broadband subscribers than video customers. He’s happy with the cable unit’s financial performance and technological advancements, but wants to see improvements in customer service.
“We are incredibly focused on continuing to improve the customer experience. It is our No. 1 priority,” he said.
Ralph Roberts has been asked many times if he envisioned Comcast morphing into the behemoth it has become today.
“If you had told me 50 years ago that Comcast would grow into the company it is today, I wouldn’t have believed it,” the MSO’s founder replied.
“In 1963, it was just a wonderful idea,” Roberts continued. “And now, I am so proud of the company we have become, and grateful to the many, many people who helped us grow along the way. I think Comcast is an example of what you can do when you put your nose to the grindstone, take some smart risks, and work with incredibly wonderful people. I can’t wait to see what happens next.”
Brian Roberts is grateful for the mentoring he received throughout his career and for the close relationship he has managed to maintain with his dad. The duo has been so successful that business colleges all across the country use Comcast as a model for succession planning and execution.
“I am the lucky benefi ciary of my father Ralph Roberts, and Julian Brodsky and Dan Aaron, who wanted to see me succeed above all else,” the younger Roberts said. “It’s hard to express what their confi dence and mentoring really meant to me. It allowed me to take risks. I was nurtured and empowered rather than squashed.
“My father wanted Comcast to grow and become an IBM,” he added. “Julian wanted fi nancial integrity for the company and Dan had the heart of the employees and customers. Those ingredients gave the company and me an amazing launch pad.”
Multichannel News celebrates Comcast’s 50th anniversary with a look back at the company’s progression and expansion from a small, independently owned cable company run by three smart guys, each with different skill sets, into the multi media powerhouse it is today.