WEBVTT - TechStuff Classic: The Comcast Story: Part One 0:00:04.400 --> 0:00:07.760 Welcome to tech Stuff, a production from I Heart Radio. 0:00:11.840 --> 0:00:14.480 Hey there, and welcome to tech Stuff. I'm your host, 0:00:14.560 --> 0:00:17.160 Jonathan Strickland. I'm an executive producer with I Heart Radio, 0:00:17.280 --> 0:00:21.239 and how the tech are you? It is time for 0:00:21.480 --> 0:00:25.480 a tech Stuff classic episode. This episode is called the 0:00:25.600 --> 0:00:30.400 Comcast Story Heart one. I bet you can't guess what 0:00:30.680 --> 0:00:34.919 next week's is called. This episode originally published on November four, 0:00:35.080 --> 0:00:38.159 two thousand and fifteen. It is of course covering the 0:00:38.240 --> 0:00:45.280 cable company Comcast, which had an interesting growth period. Uh 0:00:45.520 --> 0:00:48.320 and now, of course things are at a point where 0:00:48.320 --> 0:00:52.199 Comcast is kind of reaching a saturation point and requires 0:00:52.800 --> 0:00:57.280 other sources of revenue besides expanding into new markets. But 0:00:57.880 --> 0:00:59.960 we'll cover some of that in part two and clear 0:01:00.240 --> 0:01:03.680 this is one of those episodes where I could do 0:01:03.760 --> 0:01:06.680 an update because you know, two thousand fifteen to two 0:01:06.720 --> 0:01:11.920 thousand twenty two, we've been seeing a lot of changes 0:01:12.240 --> 0:01:15.400 in the cable space, not so much the I s 0:01:15.440 --> 0:01:21.400 P space, but definitely cable provider space. So I'll probably 0:01:21.440 --> 0:01:23.360 touch on that again by the end of the episode, 0:01:23.400 --> 0:01:27.200 but first let's listen to Part one, recorded and published 0:01:27.240 --> 0:01:32.720 on November four, two thousand fifteen. So the reason why 0:01:32.760 --> 0:01:34.360 I wanted to look at this. The thing that that 0:01:34.560 --> 0:01:38.560 kind of spurred me into talking about Comcast actually comes 0:01:38.600 --> 0:01:42.520 from a recent experience I had. So I'm recording this 0:01:42.840 --> 0:01:46.920 on Thursday, the twenty two of October two thousand fifteen. 0:01:46.959 --> 0:01:51.560 But on Monday, October nineteen, something special happened and I 0:01:51.600 --> 0:01:55.480 wanted to take part in it. That's something special was 0:01:55.920 --> 0:02:00.760 that Star Wars episode seven, the Force Awaitkins the the 0:02:00.800 --> 0:02:04.320 advanced tickets went on sale, and it was announced that 0:02:04.320 --> 0:02:06.480 they went on sale a little earlier than what people 0:02:06.520 --> 0:02:11.519 had originally anticipated. So I rushed to try and buy tickets, 0:02:12.320 --> 0:02:15.840 and one of the many things I tried to do 0:02:16.040 --> 0:02:19.880 was use Fandango. But it was very clear that there 0:02:19.919 --> 0:02:24.720 was an amazingly huge rush on tickets for the Fandango servers, 0:02:24.760 --> 0:02:28.919 as well as all the other services out there, and 0:02:29.040 --> 0:02:32.799 so you could say that the servers for Fandango weren't 0:02:33.040 --> 0:02:36.760 fully operational in the parlance of Star Wars, and I 0:02:36.760 --> 0:02:40.720 started getting irritated. But then I remembered that Fandango is 0:02:40.760 --> 0:02:45.440 owned by Comcast, and then I thought, anger leads to hate. 0:02:46.240 --> 0:02:50.440 Hate leads to podcasts. But I promise I will do 0:02:50.520 --> 0:02:53.680 my best to remain objective and dispassionate as we look 0:02:53.720 --> 0:02:55.799 at the company, its history and the role it plays 0:02:55.840 --> 0:02:59.400 in their entertainment. And it's a really long history too. 0:03:00.320 --> 0:03:03.920 So before I talked about Comcast in particular, let me 0:03:03.960 --> 0:03:08.000 set the stage with some history about cable television. Now. 0:03:08.040 --> 0:03:11.000 Cable tv got its start back in the nineteen forties 0:03:11.040 --> 0:03:13.360 in the United States, and there was a need for 0:03:13.400 --> 0:03:17.160 an alternative to over the air broadcasts because some people 0:03:17.200 --> 0:03:19.920 lived in remote locations that were too far away for 0:03:20.040 --> 0:03:22.560 over the air air waves to make it to their 0:03:22.600 --> 0:03:25.760 homes with any sort of fidelity, or they might live 0:03:25.800 --> 0:03:28.360 in areas where radio waves had trouble reaching, like in 0:03:28.520 --> 0:03:32.800 mountainous areas where a mountain might be blocking the radio waves. 0:03:32.840 --> 0:03:35.720 So cable TV was the solution, and the basic model 0:03:35.800 --> 0:03:39.360 was pretty simple in its design. In fact, the earliest 0:03:39.400 --> 0:03:42.880 models just involved people setting up an antenna on a 0:03:42.920 --> 0:03:46.240 really tall structure or a mountain or something like that, 0:03:46.760 --> 0:03:50.560 and then physically running a cable from the antenna to 0:03:50.680 --> 0:03:54.040 their television sets. But beyond that you started to get 0:03:54.200 --> 0:03:58.640 actual organized businesses that would do this on behalf of customers. You, 0:03:58.760 --> 0:04:01.520 as a customer, would pay the business for the access 0:04:01.560 --> 0:04:04.600 to these over the way air broadcast that otherwise you 0:04:04.640 --> 0:04:06.680 would not be able to reach. So you would have 0:04:06.720 --> 0:04:10.000 a broadcast station that would send out television along a 0:04:10.040 --> 0:04:13.760 certain channel or frequency of radio waves, and your cable 0:04:13.800 --> 0:04:17.440 station would essentially just be a set of receivers antenna 0:04:17.440 --> 0:04:20.320 in other words, which would pick up these broadcasts and 0:04:20.360 --> 0:04:24.040 then feed them through physical cables to their destinations. So 0:04:24.240 --> 0:04:27.240 early cable was still very much reliant on over the 0:04:27.240 --> 0:04:29.840 air broadcast. It was just an alternative way to get 0:04:29.880 --> 0:04:34.680 that content, and channels don't take up much bandwidth on 0:04:34.880 --> 0:04:38.880 a physical cable. Each channel is six mega hurts, and 0:04:38.920 --> 0:04:41.920 a cable is capable of holding hundreds of mega hurts 0:04:41.920 --> 0:04:45.320 of signals, and using compression, you can even send multiple 0:04:45.360 --> 0:04:48.760 stations down a single six mega hurts channel, So you 0:04:48.760 --> 0:04:52.520 can blast a huge amount of channels through a single cable, 0:04:52.960 --> 0:04:55.160 and the cable box or television at the other end 0:04:55.160 --> 0:04:58.719 of that cable can tune into specific channels and block 0:04:58.760 --> 0:05:01.960 all the others out. In other words, imagine that you 0:05:02.040 --> 0:05:05.640 are in a room and there's every actor you've ever 0:05:06.080 --> 0:05:09.160 known about in that room, and they're all acting their 0:05:09.240 --> 0:05:11.599 hearts out at you at the same time. But you 0:05:11.680 --> 0:05:14.720 have the ability to tune into a specific actor and 0:05:14.800 --> 0:05:18.039 tune out everybody else. That's basically what's going on with 0:05:18.160 --> 0:05:22.400 cable on a technological level. And when you opt into 0:05:22.440 --> 0:05:26.000 a cable bundle, often that means that you're also getting 0:05:26.120 --> 0:05:30.800 the cable company to decrypt uh information. So what's happening 0:05:30.800 --> 0:05:33.960 on the cable side, the cable operator side, is that 0:05:34.000 --> 0:05:38.920 they will encrypt certain channels, like pay channels that otherwise 0:05:39.080 --> 0:05:43.080 you would get for free. If you didn't have that encryption, 0:05:43.720 --> 0:05:47.000 then you, as a customer would be able to access 0:05:47.120 --> 0:05:51.240 everything a cable channel operator had to offer. But by 0:05:51.360 --> 0:05:55.520 encrypting it, then the cable company can control which channels 0:05:55.560 --> 0:05:58.320 you can actually view and which ones are off limits. 0:05:58.600 --> 0:06:02.080 When you opt in to a cable bundle, like you 0:06:02.080 --> 0:06:05.680 you subscribe to a specific cable service, they essentially send 0:06:05.680 --> 0:06:07.760 a message to your television or a cable box and 0:06:07.800 --> 0:06:10.560 that allows you to decrypt the signal on your end 0:06:10.640 --> 0:06:13.919 so that you can actually watch it. And the United States, 0:06:14.640 --> 0:06:19.159 communities in Pennsylvania, Oregon, and Arkansas were among the first 0:06:19.360 --> 0:06:21.799 to receive cable service, and by that I mean people 0:06:21.800 --> 0:06:25.040 were actually going out and setting up these antenna By 0:06:25.080 --> 0:06:29.720 nineteen fifty two, there are about seventy actual cable systems 0:06:29.800 --> 0:06:33.640 in the entire country, So these were actual companies that 0:06:33.720 --> 0:06:37.880 had taken the same sort of model that these enterprising 0:06:37.920 --> 0:06:41.320 individuals had followed and actually made a business out of it. 0:06:41.760 --> 0:06:44.800 They only had about fourteen thousand customers back in nineteen 0:06:44.880 --> 0:06:48.599 fifty two. But cable television had a big advantage over 0:06:48.680 --> 0:06:52.279 home antennas in that if you use a sophisticate antenna 0:06:52.880 --> 0:06:54.440 and you were able to put it on a really 0:06:54.440 --> 0:06:58.039 tall building or a mountain or some other really tall structure, 0:06:58.440 --> 0:07:02.120 you could pick up signals from further away than folks 0:07:02.120 --> 0:07:05.719 who are just using regular rabbit ears on their televisions, 0:07:05.760 --> 0:07:09.720 which meant that cable customers sometimes could pick up signals 0:07:09.800 --> 0:07:13.760 from other broadcast regions, so you might be able to 0:07:13.800 --> 0:07:18.320 get content from multiple large cities. If you lived kind 0:07:18.320 --> 0:07:21.920 of in between two big cities and you had this cable, 0:07:22.200 --> 0:07:24.400 it might mean that you were able to double your 0:07:24.440 --> 0:07:27.720 programming options. At least. It may be that, you know, 0:07:27.840 --> 0:07:31.560 the two affiliates of of a major broadcast station are 0:07:31.560 --> 0:07:33.800 showing more or less the same thing, but throughout the 0:07:33.880 --> 0:07:36.720 day you would have some different options available to you, 0:07:37.120 --> 0:07:41.200 which made cable fairly attractive. It was sort of the 0:07:41.240 --> 0:07:46.240 beginning of cable's advantage over over the air broadcast, although, 0:07:46.960 --> 0:07:48.680 as we'll talk about a little bit later, over the 0:07:48.680 --> 0:07:53.239 air still had a lot of other advantages. So interest 0:07:53.240 --> 0:07:57.200 in cable TV began to grow, particularly among people who 0:07:57.360 --> 0:08:02.120 just couldn't get over the air easily. By nineteen sixty two, 0:08:02.160 --> 0:08:04.680 the number of customers had grown to more than eight 0:08:04.760 --> 0:08:07.600 hundred thousand people in the United States, So in ten 0:08:07.680 --> 0:08:11.200 years it went from fourteen thousand customers to eight hundred 0:08:11.360 --> 0:08:15.440 thousand in the US. Cable TV was becoming a viable alternative, 0:08:15.480 --> 0:08:19.040 even in communities that didn't have problems accessing over the 0:08:19.120 --> 0:08:21.640 year signals. But it was also one of those things 0:08:21.640 --> 0:08:24.000 that cities were starting to look into because if you 0:08:24.080 --> 0:08:26.440 lived in a city with lots of high rise buildings, 0:08:26.480 --> 0:08:29.840 sometimes that would block radio signals too. So it was 0:08:29.880 --> 0:08:32.400 one of those things that that you could see the 0:08:32.400 --> 0:08:36.520 the benefit, the potential application, but it was still going 0:08:36.559 --> 0:08:40.880 to be really expensive to roll out the infrastructure. All right, Well, 0:08:40.880 --> 0:08:43.680 that that sets the groundwork for what the cable industry 0:08:43.760 --> 0:08:46.160 was like in the early sixties. Let's take a look 0:08:46.320 --> 0:08:51.680 at Comcast specifically. The company actually traces its history back 0:08:51.720 --> 0:08:56.680 to nineteen sixty three. That's when Ralph J. Roberts, Daniel 0:08:56.760 --> 0:09:00.960 Aaron and Julian A. Broad Ski purchased a small cable 0:09:01.040 --> 0:09:06.880 TV operator called American Cable Systems, which was in Tupelo, Mississippi, 0:09:07.200 --> 0:09:10.439 and that service had just one thousand, two hundred subscribers 0:09:11.000 --> 0:09:14.280 and that was it. The three businessmen spent five hundred 0:09:14.320 --> 0:09:19.640 thousand dollars on that purchase. So who were these guys? Well, 0:09:19.720 --> 0:09:23.440 Ralph J. Roberts grew up in New York and in Philadelphia. 0:09:23.720 --> 0:09:26.559 He served in the United States Navy before going on 0:09:26.640 --> 0:09:30.480 to work several different jobs. He gradually earned enough money 0:09:30.520 --> 0:09:32.360 to purchase a business of his own. He and his 0:09:32.440 --> 0:09:34.960 brother went into a business they invested in, a company 0:09:35.000 --> 0:09:39.319 called Pioneer Suspender Company. Turns out there was money in 0:09:39.400 --> 0:09:43.400 Suspenders because he and his brother decided to sell the 0:09:43.440 --> 0:09:46.960 business off later on, and with that money it allowed 0:09:47.000 --> 0:09:50.480 them to invest in other companies. So Ralph Roberts ended 0:09:50.559 --> 0:09:54.480 up looking into the world of TV, and it was 0:09:54.559 --> 0:09:58.960 reportedly Roberts who came up with a name Comcast. In 0:09:59.160 --> 0:10:02.320 ninet lines of several years down the road, he would 0:10:02.320 --> 0:10:05.880 combine the words communications and broadcast together to create the 0:10:05.960 --> 0:10:09.360 name Comcast, and he would serve as Comcast Chief executive 0:10:09.360 --> 0:10:13.120 Officer for more than four decades. Uh Ralph J. Roberts 0:10:13.160 --> 0:10:16.360 passed away in June of two thousand and fifteen, so 0:10:16.480 --> 0:10:20.680 very recently as of the recording of this podcast. Now. 0:10:20.760 --> 0:10:25.880 Daniel Aharon was born in nineteen twenty six in Giessen, Germany. 0:10:25.920 --> 0:10:29.000 His family escaped Germany during the rise of the Nazi 0:10:29.120 --> 0:10:32.160 Party in World War Two and they settled in Queens, 0:10:32.280 --> 0:10:36.080 New York. Now. Tragically, when he was just thirteen years old, 0:10:36.120 --> 0:10:39.120 he lost his mother. She committed suicide, and less than 0:10:39.160 --> 0:10:43.960 a month later, his father also committed suicide. Daniel Aaron 0:10:44.040 --> 0:10:45.960 was orphaned and he was not yet a citizen. He 0:10:46.040 --> 0:10:49.600 continued to live in New York and eventually he would 0:10:49.600 --> 0:10:52.760 be drafted and sent to Germany during World War Two. 0:10:53.160 --> 0:10:56.520 When he returned, he pursued a career in journalism and 0:10:56.640 --> 0:11:01.320 public relations. Eventually he entered the cable business and that's 0:11:01.360 --> 0:11:05.359 when he met Roberts and agreed to co found Comcast. 0:11:05.960 --> 0:11:09.040 In his obituary, he was referred to as the conscience 0:11:09.200 --> 0:11:14.000 of the company, famously even buying coffee for picketing employees 0:11:14.040 --> 0:11:17.000 who were in a labor dispute with Comcast. So he 0:11:17.040 --> 0:11:21.240 was sort of the working man's representative among the three 0:11:21.280 --> 0:11:25.160 co founders of this company. He passed away in two 0:11:25.200 --> 0:11:29.120 thousand three. We'll be back with more of Comcast's history 0:11:29.440 --> 0:11:43.000 after this quick break. Julian Brodsky grew up in Philadelphia. 0:11:43.360 --> 0:11:45.720 He had served in the United States Army and he 0:11:45.800 --> 0:11:49.760 became an accountant after he left the service. So Bronsky 0:11:49.840 --> 0:11:54.040 served as Robert's accountant, Ralph J. Roberts. So he was 0:11:54.080 --> 0:11:57.640 actually the accountant for Ralph J. Roberts, and was approached 0:11:57.679 --> 0:12:01.320 by Roberts and by Aaron when they were preparing to 0:12:01.880 --> 0:12:05.520 purchase this company, this little cable company in Tiple of Mississippi, 0:12:06.160 --> 0:12:09.600 and Brodsky's main role was to raise money for the company. 0:12:09.679 --> 0:12:13.120 In two thousand eleven, Brodsky retired as the vice chairman 0:12:13.280 --> 0:12:15.680 of the company, and of the three founders, he is 0:12:15.679 --> 0:12:17.680 the only one who is still alive as of the 0:12:17.720 --> 0:12:22.240 recording of this podcast. Now. Daniel Aaron is credited with 0:12:22.320 --> 0:12:26.240 having compared the three co founders as three people trying 0:12:26.280 --> 0:12:29.439 to drive a single car, and he said that Brodsky 0:12:29.600 --> 0:12:31.920 was the guy who had his foot on the accelerator 0:12:31.960 --> 0:12:35.800 as he was raising capital for the venture. Uh, Meanwhile, 0:12:35.840 --> 0:12:38.320 his own foot, Aaron, his own foot was on the 0:12:38.400 --> 0:12:41.400 break to make sure the company was a good corporate citizen, 0:12:41.679 --> 0:12:44.199 stepping on the brakes to slow down the company if 0:12:44.200 --> 0:12:46.800 he thought that they were about to do something reckless 0:12:46.960 --> 0:12:51.600 or damaging or or just unethical. And meanwhile, or alf 0:12:51.720 --> 0:12:54.920 Day Roberts, his hands were on the steering wheel, guiding 0:12:54.920 --> 0:12:58.760 the company along. In those early days of cable, the 0:12:58.760 --> 0:13:03.559 company faced some pretty big challenges. According to the founders, 0:13:03.600 --> 0:13:07.040 they actually had to act as door to door salespeople 0:13:07.080 --> 0:13:09.920 on occasion in an effort to grow. So they were 0:13:10.000 --> 0:13:14.600 physically going out knocking on people's doors and telling them 0:13:14.640 --> 0:13:17.920 about cable service. In an effort to get more customers. 0:13:18.320 --> 0:13:21.880 They came to the conclusion that expansion would require purchasing 0:13:22.000 --> 0:13:25.680 other cable companies. And this is a philosophy that Comcast 0:13:25.960 --> 0:13:30.640 has stuck with time and time again over its long history. 0:13:30.679 --> 0:13:34.240 They have purchased numerous companies that I will go into 0:13:34.280 --> 0:13:39.319 in some detail throughout these two episodes. Now, originally they 0:13:39.360 --> 0:13:43.000 focused on other cable services in the state of Mississippi. 0:13:43.360 --> 0:13:46.240 So they began to expand both in eastern and western 0:13:46.240 --> 0:13:49.600 Mississippi and really focused on that state, but they were 0:13:49.640 --> 0:13:52.520 still finding it difficult to get enough customers to make 0:13:52.559 --> 0:13:55.400 a profit after going through the expense of setting up 0:13:55.400 --> 0:13:59.600 and maintaining cable systems. So, in other words, they're operating 0:14:00.040 --> 0:14:02.480 expenses were too close to the amount of money they 0:14:02.480 --> 0:14:06.880 were bringing in. It wasn't really a fast growing company. 0:14:06.920 --> 0:14:10.079 It wasn't a fast growing business, and they were trying 0:14:10.080 --> 0:14:13.560 to find new ways to add to that as quickly 0:14:13.600 --> 0:14:18.360 as they possibly could. In the company, which at that 0:14:18.400 --> 0:14:22.240 point was still known as American Cable Systems, purchased another 0:14:22.280 --> 0:14:27.360 company called Storecast Corporation of America. Here's the difference. Though 0:14:27.360 --> 0:14:30.960 Storecast was not a cable service company, it was a 0:14:31.000 --> 0:14:33.760 marketing firm. And only was it a marketing firm, it 0:14:33.840 --> 0:14:36.760 was a marketing firm that had a very specific kind 0:14:36.760 --> 0:14:40.840 of clientele. They were chiefly known for helping food companies 0:14:40.920 --> 0:14:45.760 work with supermarkets to maximize sales prices are sales of 0:14:45.800 --> 0:14:49.360 the products, by placing those products in prominent locations. In 0:14:49.360 --> 0:14:53.240 other words, they would go into a supermarket on behalf 0:14:53.400 --> 0:14:57.000 of a client. Let's say wonder Bread. I'm just taking 0:14:57.000 --> 0:15:00.000 that as a random example. I don't know if wonder 0:15:00.040 --> 0:15:02.280 Bread was actually one of their clients. But let's say 0:15:02.280 --> 0:15:05.240 they go into a supermarket. They're representing Wonderbread, and they 0:15:05.280 --> 0:15:07.880 go to the bread aisle and they look around and 0:15:07.920 --> 0:15:11.720 they say, well, this is not great for our client. 0:15:12.280 --> 0:15:15.480 We recommend you move this to this shelf. You're gonna 0:15:15.480 --> 0:15:18.640 move more product this way. You're gonna increase your sales. 0:15:18.800 --> 0:15:21.320 Our client will be happy, you'll be happy. That's the 0:15:21.400 --> 0:15:24.280 kind of work they were mostly known for doing. So 0:15:24.400 --> 0:15:28.000 a little odd that Comcast, or at that time, American 0:15:28.080 --> 0:15:32.320 Cable Systems would purchase this type of company. Comcast continued 0:15:32.360 --> 0:15:35.680 to try and grow through acquisitions during this time, and 0:15:35.720 --> 0:15:40.200 in nineteen sixty six, Ralph J. Roberts turned his attention 0:15:40.280 --> 0:15:43.480 to Philadelphia. Keep in mind, that's one of the cities 0:15:43.480 --> 0:15:45.600 he grew up in New York and Philadelphia is where 0:15:45.600 --> 0:15:49.280 he spent in his childhood, and he bought cable systems 0:15:49.320 --> 0:15:52.560 that were serving the suburbs of Philadelphia, and later on 0:15:52.680 --> 0:15:56.040 he would also purchase a few that we're serving western Pennsylvania. 0:15:56.160 --> 0:15:59.880 Philadelphia is in the east part of Pennsylvania. He then 0:16:00.000 --> 0:16:03.160 again to expand that service into neighboring communities and an 0:16:03.160 --> 0:16:06.560 effort to scale up operations so instead of just acquiring 0:16:06.560 --> 0:16:09.400 cable businesses, he was actually trying to lay out the 0:16:09.440 --> 0:16:14.840 infrastructure to connect these various areas and scale up the 0:16:14.960 --> 0:16:19.760 entire operation, kind of consolidating them. In nineteen sixty eight, 0:16:20.360 --> 0:16:24.560 they would make another slightly weird purchase Comcast or or 0:16:24.600 --> 0:16:27.680 American Cable System still at that time, bought a Musaic 0:16:28.160 --> 0:16:34.000 franchise in Orlando, Florida. You're probably aware of music. Music 0:16:34.120 --> 0:16:37.120 if you're if you never directly experienced it, you definitely 0:16:37.120 --> 0:16:40.440 have probable. I'm guessing you've heard the term music is 0:16:40.480 --> 0:16:45.520 a company that would create and distribute very soothing music, 0:16:45.640 --> 0:16:50.120 sometimes very soothing versions of popular songs that would play 0:16:50.160 --> 0:16:53.480 in the background of things like elevators and grocery stores 0:16:53.640 --> 0:16:57.240 and you know other places, dentist office, that kind of 0:16:57.280 --> 0:17:01.320 stuff where it's supposed to, you know, lull you and 0:17:01.360 --> 0:17:05.640 relax you. And it often makes me angry because often 0:17:05.680 --> 0:17:08.600 I can recognize the original song that the music is doing, 0:17:08.680 --> 0:17:11.560 and it doesn't necessarily make me happy to hear it 0:17:11.600 --> 0:17:17.600 in a very laid back kind of approach at any rate, 0:17:18.320 --> 0:17:23.040 they wanted to purchase a franchise in Orlando, Florida, and 0:17:23.200 --> 0:17:25.439 one of the reasons this might be the case is 0:17:25.480 --> 0:17:30.520 because Ralph Roberts's brother, Joe, was an executive vice president 0:17:30.600 --> 0:17:34.879 of the Music Corporation, which might raise a few eyebrows 0:17:34.920 --> 0:17:38.240 today that two brothers are essentially doing business with one 0:17:38.240 --> 0:17:42.400 another and doing acquisitions of companies, one selling to the other, 0:17:42.800 --> 0:17:46.879 But at any rate, that's what happened in Night In. 0:17:48.400 --> 0:17:51.680 The company finally changed his changes its name to Comcast 0:17:52.080 --> 0:17:57.800 and reincorporates, this time in Pennsylvania. In nineteen seventy, the 0:17:57.840 --> 0:18:02.160 company reorganized so it's so off It's Florida Operations, which 0:18:02.200 --> 0:18:05.760 had just bought two years earlier to another company called 0:18:05.960 --> 0:18:09.480 STORER Communications, which will come back into play a little 0:18:09.560 --> 0:18:14.240 later in the episode. And Comcast began to expand into 0:18:14.280 --> 0:18:18.360 other markets, primarily Maryland at that point, and also explored 0:18:18.359 --> 0:18:23.760 options and limited partnerships rather than outright acquisitions, which gave 0:18:24.200 --> 0:18:28.280 the company a bit of an advantage in that through 0:18:28.280 --> 0:18:32.199 a limited partnership, Comcast could get access to customers but 0:18:32.359 --> 0:18:35.800 not have to commit so much of its operating funds 0:18:36.200 --> 0:18:38.800 to expand the company, and this way it would allow 0:18:38.840 --> 0:18:42.280 the company to grow without having to spend millions of 0:18:42.320 --> 0:18:46.520 dollars acquiring other cable systems although it's still pursued that 0:18:46.600 --> 0:18:50.080 as well, and the music party continued. At the same time, 0:18:50.200 --> 0:18:54.080 Comcast bought franchises and multiple cities like Detroit, San Diego, 0:18:54.240 --> 0:19:00.400 and Hartford, Connecticut. By Nino, Comcast was a to hold 0:19:00.440 --> 0:19:03.720 an initial public offering was able to launch as a 0:19:03.760 --> 0:19:08.520 publicly traded company. Stocks were traded on the NASDAK stock 0:19:08.600 --> 0:19:12.240 market and the ticker symbol was c m c s A, 0:19:13.400 --> 0:19:16.840 and it continued to grow. It would acquire smaller cable 0:19:16.840 --> 0:19:19.600 companies and incorporate them into its own service, and the 0:19:19.640 --> 0:19:23.240 company spread across the United States using these sort of acquisitions, 0:19:23.480 --> 0:19:26.240 but it was still finding it challenging to penetrate markets 0:19:27.000 --> 0:19:29.879 through other means. In other words, they were having trouble 0:19:30.040 --> 0:19:34.480 selling the idea of subscribing to Comcast. They found it 0:19:34.520 --> 0:19:37.879 easier to purchase the cable systems people were already using 0:19:37.960 --> 0:19:41.520 and then lump them under Comcast, and thus the people 0:19:41.720 --> 0:19:45.760 became Comcast customers by default. It wasn't necessarily that they 0:19:45.840 --> 0:19:49.040 chose Comcast, but rather that the company they had been 0:19:49.160 --> 0:19:54.800 a customer of before now belonged to Comcast, and that 0:19:54.960 --> 0:19:58.960 also included expanding its hold on music. By nineteen seventy three, 0:19:59.040 --> 0:20:04.679 Comcasts Music Network division was the largest independent musach operator. 0:20:05.119 --> 0:20:09.040 So music operates under a franchise system, which means that 0:20:09.440 --> 0:20:11.919 when Comcast would buy up a franchise would buy up 0:20:12.000 --> 0:20:16.600 one region and other franchises would remain independent of Comcast. 0:20:16.880 --> 0:20:19.359 But Comcast kept on doing this and thus became the 0:20:19.400 --> 0:20:22.919 largest independent musaic operator. So if you're a child of 0:20:22.920 --> 0:20:26.119 the early seventies and wondered where that easy listening music 0:20:26.200 --> 0:20:30.680 came from, there are good odds that Comcast was ultimately responsible. 0:20:32.160 --> 0:20:36.560 And also in nineteen seventy four, Ralph Roberts's son Brian 0:20:37.119 --> 0:20:42.160 started working at Comcast officially uh specifically working for Storecast 0:20:42.280 --> 0:20:45.399 as an intern, and by the following year he would 0:20:45.400 --> 0:20:49.560 start training as a cable installer, which included home installations 0:20:49.560 --> 0:20:54.240 and climbing poles to hook connections from drops to the 0:20:54.320 --> 0:20:58.680 home the home area, and by three he would become 0:20:58.720 --> 0:21:01.800 the general manager of the Trenton system for Comcast, and 0:21:01.840 --> 0:21:05.119 by four he would become vice president of Operations for 0:21:05.160 --> 0:21:09.480 the cable division. So within a decade of starting to 0:21:09.520 --> 0:21:13.199 work for the company officially, there are some reports that 0:21:13.240 --> 0:21:16.639 say that Brian Roberts was working at Comcast when he 0:21:16.720 --> 0:21:20.159 was just seven years old, which brings into questions some 0:21:20.240 --> 0:21:23.399 child labor laws, But at any rate, he within a 0:21:23.480 --> 0:21:26.399 decade he would go from intern to vice president of 0:21:26.440 --> 0:21:30.800 operations with a cable division. And uh, this also raised 0:21:30.800 --> 0:21:33.000 some questions because I mean, he's the son of one 0:21:33.000 --> 0:21:35.560 of the founders, so there's a little bit of legacy 0:21:35.600 --> 0:21:39.159 issue going on here. But he consistently showed that he 0:21:39.240 --> 0:21:41.680 was very dedicated to the company, so I don't mean 0:21:41.680 --> 0:21:45.720 to suggest that he didn't deserve this position. He certainly 0:21:45.960 --> 0:21:49.080 has been a great deal maker for Comcast and has 0:21:49.160 --> 0:21:52.800 led the company to some massive, massive business deals that 0:21:52.840 --> 0:21:55.960 we'll talk about in a second. But uh, it's still 0:21:56.040 --> 0:22:00.160 raised some eyebrows in the community of cable industry. We've 0:22:00.160 --> 0:22:03.879 got more to say about comcasts early history. After this 0:22:04.000 --> 0:22:17.840 commercial break in nineteen seventy six, the co founder, Daniel Aharon, 0:22:17.880 --> 0:22:22.359 would become the chairman of the National Cable and Television Association, 0:22:22.880 --> 0:22:25.679 which is essentially a lobby group. It's it's kind of 0:22:25.680 --> 0:22:31.320 an advocacy group for cable companies, cable industry, cable service providers, 0:22:32.000 --> 0:22:35.399 and was really focused on helping shape policy in the 0:22:35.480 --> 0:22:40.800 United States that would remove challenges obstacles and restrictions facing 0:22:40.800 --> 0:22:43.960 the cable industry, and in some cases these were restrictions 0:22:43.960 --> 0:22:47.480 that were entirely arbitrary and unfair. I don't mean to 0:22:47.520 --> 0:22:50.919 suggest that they were working to completely leverage everything so 0:22:50.960 --> 0:22:56.120 that cable companies could dominate all telecommunications industries, but rather 0:22:56.359 --> 0:23:00.920 to try and address some problems that the cable industry face. 0:23:01.040 --> 0:23:03.640 Because it was brand new, this was something, I mean 0:23:03.680 --> 0:23:06.600 even even by the seventies, this was still relatively new 0:23:07.080 --> 0:23:10.240 and still uh something that had to battle with much 0:23:10.280 --> 0:23:15.200 more entrenched systems like the telephone companies and the over 0:23:15.280 --> 0:23:20.600 the air broadcast companies. Also in nineteen seventy seven, Comcast 0:23:20.680 --> 0:23:24.879 would add HBO to twenty thousand customers in Pennsylvania with 0:23:24.960 --> 0:23:31.120 a five night preview, so customers got five nights free HBO, 0:23:31.240 --> 0:23:35.360 which was a fledgling company at that point, and afterward, 0:23:35.880 --> 0:23:40.320 Comcast received three thousand subscription orders once the preview period end, 0:23:41.080 --> 0:23:44.840 so it was a fairly successful preview. And if you 0:23:44.920 --> 0:23:48.200 listen to the story of HBO, which I believe was 0:23:48.240 --> 0:23:52.080 a three part episode that that I did, it's at 0:23:52.160 --> 0:23:53.879 least two parts at the new rate, but I did 0:23:53.960 --> 0:23:56.000 that quite a while ago. If you go and look 0:23:56.040 --> 0:23:59.160 at the Tech Stuff archives, you can find the HBO 0:23:59.280 --> 0:24:02.480 story where we talk a little more about how HBO 0:24:02.640 --> 0:24:07.160 also really shaped the cable industry as it became more 0:24:07.200 --> 0:24:13.639 and more important. In night Daniel Aaron would become UH. 0:24:13.800 --> 0:24:15.920 He would use his position as the Chairman of the 0:24:16.000 --> 0:24:19.880 National Cable Television Association or in c t A UH 0:24:19.920 --> 0:24:23.159 and successfully lobby the United States government to reduce restrictions 0:24:23.160 --> 0:24:26.439 on what cable operators could carry. So up to that point, 0:24:26.760 --> 0:24:29.240 there had been some limitations on some of the programming 0:24:29.320 --> 0:24:33.240 that cable operators could offer their customers, and often this 0:24:33.359 --> 0:24:36.760 was programming that their customers actually wanted access to, but 0:24:36.880 --> 0:24:39.520 the cable operators their hands were tied. They were not 0:24:39.600 --> 0:24:43.199 allowed by law to carry that programming. So the n 0:24:43.200 --> 0:24:46.000 c t A was able to argue successfully on behalf 0:24:46.000 --> 0:24:48.960 of cable operators and even reach the point where cable 0:24:49.000 --> 0:24:52.080 could offer up channels that weren't broadcast over the air, 0:24:52.119 --> 0:24:55.840 meaning that cable companies could now create or partner with 0:24:55.920 --> 0:25:00.280 creators to provide content that otherwise people would never see 0:25:00.440 --> 0:25:03.199 because there'd be no other way of getting it. That 0:25:03.240 --> 0:25:06.640 actually created a market advantage for cable over classic Over 0:25:06.680 --> 0:25:10.400 the year broadcasts because now not only could you get 0:25:10.480 --> 0:25:14.280 something that wasn't going to be affected by radio transmissions, 0:25:14.280 --> 0:25:17.320 but you could see content that would not be available 0:25:17.320 --> 0:25:20.679 to you otherwise. And by nineteen seventy eight, Comcast earnings 0:25:20.680 --> 0:25:24.760 were an excess of three million dollars, which is chicken 0:25:24.760 --> 0:25:27.280 feed compared to what they make today, but still was 0:25:27.320 --> 0:25:32.359 impressive at the time, and Comcast made its first international 0:25:32.440 --> 0:25:37.160