Comcast 2014 Annual Report Download - page 39

Table of Contents
Programming expenses for our video services are increasing, which could adversely affect our Cable Communications
segment’s businesses.
We expect programming expenses for our video services to continue to be our Cable Communications segment’
s largest single
expense item and to increase in the foreseeable future. The multichannel video provider industry has experienced continued
increases in the cost of programming, especially sports programming, which we expect will continue for the foreseeable future. Our
programming expenses may also increase as we add programming to our video services or distribute existing programming to
more of our customers or through additional delivery platforms, such as On Demand or mobile apps. Additionally, in the past few
years, we have begun paying certain local broadcast television stations in exchange for their required consent for the
retransmission of broadcast network programming to our video services customers; we expect to continue to be subject to
increasing demands for payment and other concessions from local broadcast television stations. These market factors may be
exacerbated by the increasing trend of consolidation in the media industry, which may further increase our programming expenses.
If we are unable to raise our customers’
rates or offset programming cost increases through the sale of additional services, the
increasing cost of programming could have an adverse impact on our Cable Communications segment’
s results of operations.
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
businesses and results of operations could be adversely affected.
NBCUniversal’
s success depends on consumer acceptance of its content and its businesses may be adversely affected if
its content fails to achieve sufficient consumer acceptance or the costs to create or acquire content increase.
Most of NBCUniversal’
s businesses create and acquire media and entertainment content, the success of which depends
substantially on consumer tastes and preferences that change in often unpredictable ways. The success of these businesses
depends on our ability to consistently create, acquire, market and distribute cable network and broadcast television programming,
filmed entertainment, theme park attractions and other content that meet the changing preferences of the broad domestic and
international consumer market. We have invested, and will continue to invest, substantial amounts in our content, including in the
production of original content on our cable networks and broadcast television networks, in our films and for theme park attractions,
before learning the extent to which it would earn consumer acceptance.
We also obtain a significant portion of our content from third parties, such as movie studios, television production companies, sports
organizations and other suppliers. Competition for popular content, particularly for sports programming, is intense, and we may
have to increase the price we are willing to pay or be outbid by our competitors for popular content. Entering into or renewing
contracts for such programming rights or acquiring additional rights may result in significantly increased costs. Moreover,
particularly with respect to long-
term contracts for sports programming rights, our results of operations and cash flows over the term
of a contract depend on a number of factors, including the strength of the advertising market, our audience size, and the ability to
secure distribution
from and impose surcharges or obtain carriage on, multichannel video providers for the content and the timing
and amount of our rights payments. There can be no assurance that revenue from these contracts will exceed our cost for the
rights, as well as the other costs of producing and distributing the programming. If our content does not achieve sufficient consumer
acceptance, or if we cannot obtain or retain rights to popular content on acceptable terms, or at all, our businesses may be
adversely affected.
The loss of NBCUniversal’
s programming distribution agreements, or the renewal of these agreements on less favorable
terms, could adversely affect its businesses.
Our cable networks depend on their ability to secure and maintain distribution agreements with multichannel video providers. Our
broadcast television networks depend on their ability to secure and maintain network
Comcast 2014 Annual Report on Form 10
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