Comcast Corporation (CMCSA), AT&T Inc. (T)- Profiting From the Battle for the Future of Television: Part 1

As technology continues to advance, an increasing number of companies are competing for supremacy in the field of television. Even the term “television” no longer really captures the full spectrum of how we consume visual entertainment, and the battle is just getting warmed up. Whereas just a few decades ago we took a huge leap forward from broadcast TV and the antenna to cable options — like those from Comcast Corporation (NASDAQ:CMCSA) — the landscape today is becoming increasingly diversified and technology-driven.

What you see emerging are four very distinct segments: cable and satellite, streaming video, TV enhancement, and advanced options. While there is certainly overlap among these four areas, both in terms of provider and functionality, each area is critical to understanding the overall market. In this series, I will explore each of the four segments — and the investment options of each — and conclude by giving you one view of where the industry may go and how we’ll get there.

The traditional players
Cable companies like Comcast and satellite providers like DIRECTV (NASDAQ:DTV) and DISH Network Corp (NASDAQ:DISH) make up the traditional cadre of competitors in this space, although some of the communications companies like AT&T Inc. (NYSE:T) and Verizon Communications Inc. (NYSE:VZ) have made a push to deliver content through these means as well. What makes each of these companies interesting is how they have tried to expand and bring slightly different strengths to the market:

Comcast Corporation (NASDAQ:CMCSA)

Comcast Corporation (NASDAQ:CMCSA) is the ultimate cable company, but has wisely chosen not to rely only on its distribution business. The company recently acquired NBC, demonstrating its knowledge that if you want to succeed in the new frontier of entertainment, content is king. Where Comcast Corporation (NASDAQ:CMCSA) also excels in is in its efforts to stay current with its service offerings. In response to streaming video, the company rolled out Streampix; in response to DVR competitors, it began offering its own DVR options; and in response to smart TV, the company recently rolled out its X1 service. While Comcast Corporation (NASDAQ:CMCSA) may be the old guard, it has made very clear its willingness to adapt to the changing environment.

DIRECTV (NASDAQ:DTV) and DISH Network Corp (NASDAQ:DISH)
In many ways, these two satellite providers have been the slowest to adapt to the changing environment. DIRECTV’s biggest strength is its close association with the NFL — sports programming is a critical area for these companies.