It's not me, it's you.
Everybody hates Comcast. The cable giant consistently ranks last or near last among all companies on consumer satisfaction surveys. Hurling insults at Comcast — its prices, its speeds, its customer service — has risen nearly to the level of a national pastime.
But what if there's nothing the company can do to change its customers' minds? What if most of what people hate about Comcast has its roots in the structure of America's cable market?
That's what the company's CEO, Brian Roberts, suggested last weekend when asked about the company's poor record in an interview with Business Insider founder Henry Blodget.
Comcast CEO Brian Roberts says the company is a victim of its licensing fees
Roberts argues that people might hate Comcast, but they hate other cable companies too:
"We're with all the other cable companies, within spitting distance of each other. As a group, that is what the results show.
Like... "Well, your people didn’t show up on time" and therefore let’s fix that and will that actually change the score and suddenly we’re the best company in America? Google’s free. Facebook is free. We charge, and we collect for every piece of content rights. Every movie star. Every athlete. Every possible piece of content we pay.
We’re up to well in excess of $13 [billion] to $14 billion a year at this one company to procure that content on behalf of the consumer, and it’s grown on average as an industry about 8% to 12% a year compounded for a decade. If you drop a channel, you’re incredibly unpopular, and if you pass along a rate increase, you’re incredibly unpopular."
The problem isn’t Comcast’s service, Roberts is saying; it’s that people have to pay for it. Comcast operates by striking deals with content creators and publishers — ABC, CBS, FOX, ESPN, HBO, and the rest — for the right to broadcast their shows, movies, football, baseball, and basketball games. And as Roberts said, it doesn’t come cheap.
And there’s not much the company, or other cable companies, can do about that, in Roberts's view, because content companies have too much leverage.
Licensing fees may be expensive, but Comcast can afford them
One problem with Robert’s argument is that Comcast makes money too — a lot of it.
In 2014, it brought in nearly $69 billion in revenue, with $14.9 billion of that being operating income, a.k.a. profits.
So, yes, Comcast has to charge its customers, but it could charge them less if it wanted to. It could also invest more heavily in more and better-trained customer service workers. It could boost those data caps that customers are always complaining about.
In 2014, it brought in nearly $69 billion in revenue, with $14.9 billion of that being operating income, a.k.a. profits.
So, yes, Comcast has to charge its customers, but it could charge them less if it wanted to. It could also invest more heavily in more and better-trained customer service workers. It could boost those data caps that customers are always complaining about.
Customers don’t hate every service they pay for
To be fair, elsewhere in the interview Roberts described some of the company’s plans to improve its customer service, including an Uber-like tracking system for Comcast’s technicians.
But he seems to believe that it may just never be enough. No matter how hard Comcast tries to make its customers happy, they still wind up disgruntled. Customers just can’t stand paying for things, and the only way Comcast could really earn their love is by giving away its product, as Google and Facebook do.
The problem with this argument is that most companies do charge for their products, and few if any are as hated as Comcast. Indeed, the cable TV industry’s upstart rivals — Netflix, Hulu, Amazon Prime — charge their customers as well.
And customers don't hate Netflix the way they hate Comcast. In 2014, Comcast scored a 54 out of 100 on the American Customer Satisfaction survey — down from 64 in 2001. On the same survey, Netflix came in at 81. In eight years of measurement, it's never dropped below a 74.
One reason for this: Online streaming services charge a lot less. Netflix’s basic service costs $7.99 a month, as does Hulu’s. Comcast’s "digital starter" TV package, which doesn’t include premium channels like HBO, costs $49.99.
On the other hand, some companies charge a premium while still earning high marks, because their products are great. For instance, iPhones are way more expensive than a lot of Android-based smartphones, yet they’ve earned fanatical customer loyalty.
So maybe Comcast can’t please its customers. Maybe it’s doomed to its abysmal Yelp reviews and a rock-bottom reputation. But it could probably try a bit harder too.
To be fair, elsewhere in the interview Roberts described some of the company’s plans to improve its customer service, including an Uber-like tracking system for Comcast’s technicians.
But he seems to believe that it may just never be enough. No matter how hard Comcast tries to make its customers happy, they still wind up disgruntled. Customers just can’t stand paying for things, and the only way Comcast could really earn their love is by giving away its product, as Google and Facebook do.
The problem with this argument is that most companies do charge for their products, and few if any are as hated as Comcast. Indeed, the cable TV industry’s upstart rivals — Netflix, Hulu, Amazon Prime — charge their customers as well.
And customers don't hate Netflix the way they hate Comcast. In 2014, Comcast scored a 54 out of 100 on the American Customer Satisfaction survey — down from 64 in 2001. On the same survey, Netflix came in at 81. In eight years of measurement, it's never dropped below a 74.
One reason for this: Online streaming services charge a lot less. Netflix’s basic service costs $7.99 a month, as does Hulu’s. Comcast’s "digital starter" TV package, which doesn’t include premium channels like HBO, costs $49.99.
On the other hand, some companies charge a premium while still earning high marks, because their products are great. For instance, iPhones are way more expensive than a lot of Android-based smartphones, yet they’ve earned fanatical customer loyalty.
So maybe Comcast can’t please its customers. Maybe it’s doomed to its abysmal Yelp reviews and a rock-bottom reputation. But it could probably try a bit harder too.
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