Comcast 2011 Annual Report Download - page 32

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as wireless data cards, tablets, smartphones and mobile wireless routers that connect to such devices, may
compete with our high-speed Internet services. Our voice services are facing increased competition from
wireless and Internet-based phone services as more people choose to replace their traditional wireline phone
service with these phone services. The success of any of these ongoing and future developments may have
an adverse effect on our cable communications’ competitive position, business and results of operations.
New technologies also are affecting consumer behavior in ways that affect how content is viewed, which may
have a negative impact on NBCUniversal’s business and results of operations. For example, the increased
availability of video on demand services, DVRs and video programming on the Internet (including high-quality
original video programming that may be viewed only through Internet streaming services), as well as
increased access to various media through wireless devices, have the potential to reduce the viewing of our
content through traditional distribution outlets, which could adversely affect the price and amount of advertis-
ing that advertisers are willing to purchase from us, the amount multichannel video providers are willing to
pay for our content and the levels of DVD and theatrical sales. Some of these new technologies also give
consumers greater flexibility to watch programming on a time-delayed or on-demand basis or to fast-forward
or skip advertisements within our programming, which also may adversely impact the advertising revenue we
receive. Delayed viewing and advertising skipping have the potential to become more common as the pene-
tration of DVRs increases and content becomes increasingly available via video on demand services and
Internet sources. These and other changes in technology, distribution platforms and consumer behavior
could have an adverse effect on our competitive position, businesses and results of operations.
Programming expenses for our video services are increasing, which could adversely affect our future
results of operations.
We expect programming expenses for our video services to continue to be our Cable Communications
segment’s largest single expense item in the foreseeable future. The multichannel video provider industry has
continued to experience an increase in the cost of programming, especially sports programming. In addition,
as we add programming to our video services or distribute existing programming to more of our customers
and through additional delivery platforms, we incur increased programming expenses. We have recently
begun paying certain local television stations in exchange for their required consent for the retransmission of
broadcast programming to our video services customers and expect to continue to be subject to increasing
demands for direct monetary compensation and other concessions from local television stations. If we are
unable to raise our customers’ rates or offset such programming cost increases through the sale of additional
services, the increasing cost of programming could have an adverse impact on our results of oper-
ations. Moreover, as our contracts with content providers expire, there can be no assurance that they will be
renewed on acceptable terms or that they will be renewed at all, in which case we may be unable to provide
such content as part of our video services and our business and results of operations could be adversely
affected.
We are subject to regulation by federal, state, local and foreign authorities, which may impose additional
costs and restrictions on our businesses.
Federal, state and local governments extensively regulate the video services industry and may increase the
regulation of the Internet service and VoIP phone service industries. We expect that legislative enactments,
court actions and regulatory proceedings will continue to clarify, and in some cases may adversely affect, the
rights and obligations of cable operators and other entities under the Communications Act and other laws.
Our broadcast television business also is highly regulated by federal laws and regulations, and our cable
networks, filmed entertainment and theme parks businesses are subject to various other laws and regulations
at the international, federal, state and local levels, including laws and regulations relating to environmental
protection, that have become more stringent over time, and the safety of consumer products and theme park
operations. In addition, as a result of the NBCUniversal transaction, we are subject to the NBCUniversal
Comcast 2011 Annual Report on Form 10-K 30