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Comcast has created a monster… and its name is Netflix

Published Jul 23rd, 2015 12:40PM EDT
Comcast Vs Netflix
Image: Netflix

Oops. Netflix has quickly grown from a nifty little site that streams a bunch of old movies to a game-changing entertainment powerhouse that makes it easier than ever to cut the cord. Long story short, it has become pay TV providers’ worst nightmare. Users love Netflix, investors love Netflix, and the company’s future looks brighter than ever as the cord cutting trend picks up steam.

Typically, service providers try to downplay Netflix’s impact on their business. Of course, one need only look at cable company’s subscriber trends to see how seriously Netflix and similar services are affecting these companies’ bottom lines. In an interesting moment of candor, however, one top cable company lobbyist admitted that Netflix is indeed hurting its business.

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Top Comcast lobbyist David Cohen is very good at… being a lobbyist. If you’re unfamiliar with his masterpieces of fiction, check out this post from back when Cohen said that Comcast’s customer service does a great job “way more than 99%” of the time.

Clearly, Cohen has never had to place a call to Comcast customer service.

Speaking at a panel session during the annual New England Cable & Telecommunications Association conference, Cohen put some nice spin on Netflix’s impact on Comcast’s business. Rather than focus on the fact that subscribers are cutting cable TV at an accelerating rate, Cohen discussed how Netflix is helping boost two of Comcast’s most profitable businesses: content licensing and broadband.

“Remember, you can’t get Netflix without broadband service,” Cohen said while speaking of Netflix’s recent earnings, when the company announced that it added 3 million new subscribers in the second quarter. “Those are 3 million customers of our broadband service.”

In a moment of candor, however, Cohen actually admitted that Netflix actually is hurting Comcast — specifically, he called it a “wound.” He also admitted that it’s Comcast’s own fault, in part, that Netflix has grown to become the powerhouse it is today.

“Part of this is a self-inflicted wound,” Cohen admitted. “We have made video too expensive.”

A recent study found that Netflix continues to have a huge impact on the pay TV industry as it draws households away from pay TV packages and drives them to cut the cord. According to the study, 9% of Netflix subscribers who currently also pay for cable or satellite TV plan to cancel their pay TV subscriptions in the next year, and another 16% are at least considering cutting the cord.

Zach Epstein
Zach Epstein Executive Editor

Zach Epstein has been the Executive Editor at BGR for more than 10 years. He manages BGR’s editorial team and ensures that best practices are adhered to. He also oversees the Ecommerce team and directs the daily flow of all content. Zach first joined BGR in 2007 as a Staff Writer covering business, technology, and entertainment.

His work has been quoted by countless top news organizations, and he was recently named one of the world's top 10 “power mobile influencers” by Forbes. Prior to BGR, Zach worked as an executive in marketing and business development with two private telcos.