Comcast Corporation (NASDAQ:CMCSA), the top cable company in America, recently posted solid numbers that were above analyst expectations, netting a 29% increase in earnings year-over-year. But traditional cable television is only part of the Philadelphia-based company’s earnings. In fact, the entire industry seems to have realized that cable is going to become a shrinking part of the American landscape over the next couple of decades.
TVs Get Smart
Thanks to Smart TVs and services like Netflix, Inc. (NASDAQ:NFLX), consumers are gravitating toward online streaming as a way of life. Families can watch entire seasons of shows for less than $10 a month, rather than paying more than $30 a month for Comcast Corporation (NASDAQ:CMCSA)’s most basic plan.
With its new Chromecast product, Google Inc (NASDAQ:GOOG) aims to do just that. Instead of using the remote to find a video, consumers merely find the video on a laptop, tablet, or smartphone and tap the Chromecast icon to send it to your TV. The device communicates with a flash drive-shaped dongle that plugs directly into a USB port on a TV.
Currently, Google Inc (NASDAQ:GOOG)’s new product only interacts with YouTube, Netflix, and Google Inc (NASDAQ:GOOG) Play, but if the product takes off, more will follow. Which leads industry analysts to conclude that more consumers will gravitate toward streaming, with the final inconveniences now out of the way. Google is known for its innovation and, as owner of YouTube, stands to gain much by ensuring YouTube viewership remains high. Earlier this year, YouTube unveiled “paid subscription channels,” where cable networks and other providers could offer content for a monthly fee.
These days, Google Inc (NASDAQ:GOOG) is working hard to justify its stock price. Investors were eager to shell out $900 a share when the company was doing well, but while it reported solid earnings, it missed expectations. Revenue was up 19% to $14 billion for the company’s second quarter and earnings per share fell $0.42 to $9.71. Analysts were predicting $10.78 per share on revenue of $14.41 billion.
Still, the future is bright for Google Inc (NASDAQ:GOOG), as CEO Larry Page emphasized in a press release. Stellar sales of Chromecast could provide Google Inc (NASDAQ:GOOG) with the boost it needs to beat analyst expectations of only $10.60 a share on $11.8 billion in sales in its current quarter.
AT&T Inc. (NYSE:T), traditionally a phone service provider, has moved into the cable TV space, going head-to-head with Comcast Corporation (NASDAQ:CMCSA) and other cable providers. And like those other companies, AT&T Inc. (NYSE:T)’s offerings run the gamut, from cell phone service to Internet, TV, landline, and more. But for AT&T, cable TV has become a lucrative business, making up for a 0.9% landline revenue drop in its last quarter. To recover from America’s shift toward VoIP and mobile phone services, AT&T Inc. (NYSE:T) has been beefing up subscribers for its U-Verse cable TV service, adding 233,000 customers over the last three months.