About a month ago, Comcast announced that it was purchasing Time Warner Cable for $45 billion. According to CNN Money, the merger means that one in three Americans will have their cable and Internet provided by this new media giant. So why is this such a huge story? Well, from a business standpoint, this is the sign of a two major companies looking to spread themselves out across the market against companies like DirecTV and AT&T, along with new streaming services like Netflix.
In class this week, we talked about companies and what they need to do to be functional. Of course, profits are very important to a company’s success. So what’s the potential for Comcast and Time Warner? Time Warner Cable has close to 11 million subscribers, while Comcast has near 30 million subscribers. Combining the subscribers will certainly open prospects for a serge in profits. Time Warner and Comcast are the two largest cable and Internet providers in America, so seeing how the customers of these two companies share services will be interesting.
CNN Money reports that Comcast had positive customer reviews recently for its software, however Time Warner had very poor customer reviews last Spring. Time Warner had complaints against it for keeping CBS and Showtime out of many homes. Customer satisfaction needs to be made a vital part of a company, so Comcast needs to share their secrets to success with Time Warner in order to create as much satisfaction as possible. Keeping connected with the community a company is selling to is extremely vital.
The merger of Comcast and Time Warner is a huge story because it is the two largest cable companies in the country coming together. Now this kind of merger has backfired before (the AOL/Time Warner merger in 2000), so there has to be more control in this new outing. Comcast needs to give new ideas to Time Warner in order to expand. This cannot be just a business move to share customers and earn more profits. The world will be looking to see how these two companies change their business plan.