As HDTV Moves In, Cable’s House Gets Trashed (CMCSA)
October 11, 2007 by Douglas A. McIntyreCable companies had all of the competitive advantages. They could offer broadband, TV, and voice service in one package. Satellite TV could only offer television. Telecom companies had slow DSL, and building fiber-to-the-home was expensive and would take years.
So, why is Comcast (CMCSA) trading at a 52-week low while DirecTV (DTV) and AT&T (T) trade near their period highs?
Part of the answer is that homes with HDTV capacity are growing quickly as are the number of TVs that have HDTV capacity.
DirecTV can now offer 55 HDTV channels. Comcast and Time Warner (TWC) are at about half of that. Small cable systems may have no HDTV channels.
Verizon’s (VZ) FiOS fiber product has so much bandwidth that it will be able to top what any other HDTV delivery system can. As The Wall Street Journal writes "the new fiber network that Verizon is building has greater capacity than the average cable system."
Cable is working on new technology to increase bandwidth to allow for more HDTV channels.
But, the question is, why did the cable companies wait so long? They had an advantage, but did not exploit it.
Cable let the competition back in the game.
Douglas A. McIntyre
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