Welcome to tech Stuff, a production from I Heart Radio. Hey there, and welcome to tech Stuff. I'm your host, Jonathan Strickland. I'm an executive producer with I Heart Radio, and how the tech are you? It is time for a tech Stuff classic episode. This episode is called the Comcast Story Heart one. I bet you can't guess what next week's is called. This episode originally published on November four, two thousand and fifteen. It is of course covering the cable company Comcast, which had an interesting growth period. Uh and now, of course things are at a point where Comcast is kind of reaching a saturation point and requires other sources of revenue besides expanding into new markets. But we'll cover some of that in part two and clear this is one of those episodes where I could do an update because you know, two thousand fifteen to two thousand twenty two, we've been seeing a lot of changes in the cable space, not so much the I s P space, but definitely cable provider space. So I'll probably touch on that again by the end of the episode, but first let's listen to Part one, recorded and published on November four, two thousand fifteen. So the reason why I wanted to look at this. The thing that that kind of spurred me into talking about Comcast actually comes from a recent experience I had. So I'm recording this on Thursday, the twenty two of October two thousand fifteen. But on Monday, October nineteen, something special happened and I wanted to take part in it. That's something special was that Star Wars episode seven, the Force Awaitkins the the advanced tickets went on sale, and it was announced that they went on sale a little earlier than what people had originally anticipated. So I rushed to try and buy tickets, and one of the many things I tried to do was use Fandango. But it was very clear that there was an amazingly huge rush on tickets for the Fandango servers, as well as all the other services out there, and so you could say that the servers for Fandango weren't fully operational in the parlance of Star Wars, and I started getting irritated. But then I remembered that Fandango is owned by Comcast, and then I thought, anger leads to hate. Hate leads to podcasts. But I promise I will do my best to remain objective and dispassionate as we look at the company, its history and the role it plays in their entertainment. And it's a really long history too. So before I talked about Comcast in particular, let me set the stage with some history about cable television. Now. Cable tv got its start back in the nineteen forties in the United States, and there was a need for an alternative to over the air broadcasts because some people lived in remote locations that were too far away for over the air air waves to make it to their homes with any sort of fidelity, or they might live in areas where radio waves had trouble reaching, like in mountainous areas where a mountain might be blocking the radio waves. So cable TV was the solution, and the basic model was pretty simple in its design. In fact, the earliest models just involved people setting up an antenna on a really tall structure or a mountain or something like that, and then physically running a cable from the antenna to their television sets. But beyond that you started to get actual organized businesses that would do this on behalf of customers. You, as a customer, would pay the business for the access to these over the way air broadcast that otherwise you would not be able to reach. So you would have a broadcast station that would send out television along a certain channel or frequency of radio waves, and your cable station would essentially just be a set of receivers antenna in other words, which would pick up these broadcasts and then feed them through physical cables to their destinations. So early cable was still very much reliant on over the air broadcast. It was just an alternative way to get that content, and channels don't take up much bandwidth on a physical cable. Each channel is six mega hurts, and a cable is capable of holding hundreds of mega hurts of signals, and using compression, you can even send multiple stations down a single six mega hurts channel, So you can blast a huge amount of channels through a single cable, and the cable box or television at the other end of that cable can tune into specific channels and block all the others out. In other words, imagine that you are in a room and there's every actor you've ever known about in that room, and they're all acting their hearts out at you at the same time. But you have the ability to tune into a specific actor and tune out everybody else. That's basically what's going on with cable on a technological level. And when you opt into a cable bundle, often that means that you're also getting the cable company to decrypt uh information. So what's happening on the cable side, the cable operator side, is that they will encrypt certain channels, like pay channels that otherwise you would get for free. If you didn't have that encryption, then you, as a customer would be able to access everything a cable channel operator had to offer. But by encrypting it, then the cable company can control which channels you can actually view and which ones are off limits. When you opt in to a cable bundle, like you you subscribe to a specific cable service, they essentially send a message to your television or a cable box and that allows you to decrypt the signal on your end so that you can actually watch it. And the United States, communities in Pennsylvania, Oregon, and Arkansas were among the first to receive cable service, and by that I mean people were actually going out and setting up these antenna By nineteen fifty two, there are about seventy actual cable systems in the entire country, So these were actual companies that had taken the same sort of model that these enterprising individuals had followed and actually made a business out of it. They only had about fourteen thousand customers back in nineteen fifty two. But cable television had a big advantage over home antennas in that if you use a sophisticate antenna and you were able to put it on a really tall building or a mountain or some other really tall structure, you could pick up signals from further away than folks who are just using regular rabbit ears on their televisions, which meant that cable customers sometimes could pick up signals from other broadcast regions, so you might be able to get content from multiple large cities. If you lived kind of in between two big cities and you had this cable, it might mean that you were able to double your programming options. At least. It may be that, you know, the two affiliates of of a major broadcast station are showing more or less the same thing, but throughout the day you would have some different options available to you, which made cable fairly attractive. It was sort of the beginning of cable's advantage over over the air broadcast, although, as we'll talk about a little bit later, over the air still had a lot of other advantages. So interest in cable TV began to grow, particularly among people who just couldn't get over the air easily. By nineteen sixty two, the number of customers had grown to more than eight hundred thousand people in the United States, So in ten years it went from fourteen thousand customers to eight hundred thousand in the US. Cable TV was becoming a viable alternative, even in communities that didn't have problems accessing over the year signals. But it was also one of those things that cities were starting to look into because if you lived in a city with lots of high rise buildings, sometimes that would block radio signals too. So it was one of those things that that you could see the the benefit, the potential application, but it was still going to be really expensive to roll out the infrastructure. All right, Well, that that sets the groundwork for what the cable industry was like in the early sixties. Let's take a look at Comcast specifically. The company actually traces its history back to nineteen sixty three. That's when Ralph J. Roberts, Daniel Aaron and Julian A. Broad Ski purchased a small cable TV operator called American Cable Systems, which was in Tupelo, Mississippi, and that service had just one thousand, two hundred subscribers and that was it. The three businessmen spent five hundred thousand dollars on that purchase. So who were these guys? Well, Ralph J. Roberts grew up in New York and in Philadelphia. He served in the United States Navy before going on to work several different jobs. He gradually earned enough money to purchase a business of his own. He and his brother went into a business they invested in, a company called Pioneer Suspender Company. Turns out there was money in Suspenders because he and his brother decided to sell the business off later on, and with that money it allowed them to invest in other companies. So Ralph Roberts ended up looking into the world of TV, and it was reportedly Roberts who came up with a name Comcast. In ninet lines of several years down the road, he would combine the words communications and broadcast together to create the name Comcast, and he would serve as Comcast Chief executive Officer for more than four decades. Uh Ralph J. Roberts passed away in June of two thousand and fifteen, so very recently as of the recording of this podcast. Now. Daniel Aharon was born in nineteen twenty six in Giessen, Germany. His family escaped Germany during the rise of the Nazi Party in World War Two and they settled in Queens, New York. Now. Tragically, when he was just thirteen years old, he lost his mother. She committed suicide, and less than a month later, his father also committed suicide. Daniel Aaron was orphaned and he was not yet a citizen. He continued to live in New York and eventually he would be drafted and sent to Germany during World War Two. When he returned, he pursued a career in journalism and public relations. Eventually he entered the cable business and that's when he met Roberts and agreed to co found Comcast. In his obituary, he was referred to as the conscience of the company, famously even buying coffee for picketing employees who were in a labor dispute with Comcast. So he was sort of the working man's representative among the three co founders of this company. He passed away in two thousand three. We'll be back with more of Comcast's history after this quick break. Julian Brodsky grew up in Philadelphia. He had served in the United States Army and he became an accountant after he left the service. So Bronsky served as Robert's accountant, Ralph J. Roberts. So he was actually the accountant for Ralph J. Roberts, and was approached by Roberts and by Aaron when they were preparing to purchase this company, this little cable company in Tiple of Mississippi, and Brodsky's main role was to raise money for the company. In two thousand eleven, Brodsky retired as the vice chairman of the company, and of the three founders, he is the only one who is still alive as of the recording of this podcast. Now. Daniel Aaron is credited with having compared the three co founders as three people trying to drive a single car, and he said that Brodsky was the guy who had his foot on the accelerator as he was raising capital for the venture. Uh, Meanwhile, his own foot, Aaron, his own foot was on the break to make sure the company was a good corporate citizen, stepping on the brakes to slow down the company if he thought that they were about to do something reckless or damaging or or just unethical. And meanwhile, or alf Day Roberts, his hands were on the steering wheel, guiding the company along. In those early days of cable, the company faced some pretty big challenges. According to the founders, they actually had to act as door to door salespeople on occasion in an effort to grow. So they were physically going out knocking on people's doors and telling them about cable service. In an effort to get more customers. They came to the conclusion that expansion would require purchasing other cable companies. And this is a philosophy that Comcast has stuck with time and time again over its long history. They have purchased numerous companies that I will go into in some detail throughout these two episodes. Now, originally they focused on other cable services in the state of Mississippi. So they began to expand both in eastern and western Mississippi and really focused on that state, but they were still finding it difficult to get enough customers to make a profit after going through the expense of setting up and maintaining cable systems. So, in other words, they're operating expenses were too close to the amount of money they were bringing in. It wasn't really a fast growing company. It wasn't a fast growing business, and they were trying to find new ways to add to that as quickly as they possibly could. In the company, which at that point was still known as American Cable Systems, purchased another company called Storecast Corporation of America. Here's the difference. Though Storecast was not a cable service company, it was a marketing firm. And only was it a marketing firm, it was a marketing firm that had a very specific kind of clientele. They were chiefly known for helping food companies work with supermarkets to maximize sales prices are sales of the products, by placing those products in prominent locations. In other words, they would go into a supermarket on behalf of a client. Let's say wonder Bread. I'm just taking that as a random example. I don't know if wonder Bread was actually one of their clients. But let's say they go into a supermarket. They're representing Wonderbread, and they go to the bread aisle and they look around and they say, well, this is not great for our client. We recommend you move this to this shelf. You're gonna move more product this way. You're gonna increase your sales. Our client will be happy, you'll be happy. That's the kind of work they were mostly known for doing. So a little odd that Comcast, or at that time, American Cable Systems would purchase this type of company. Comcast continued to try and grow through acquisitions during this time, and in nineteen sixty six, Ralph J. Roberts turned his attention to Philadelphia. Keep in mind, that's one of the cities he grew up in New York and Philadelphia is where he spent in his childhood, and he bought cable systems that were serving the suburbs of Philadelphia, and later on he would also purchase a few that we're serving western Pennsylvania. Philadelphia is in the east part of Pennsylvania. He then again to expand that service into neighboring communities and an effort to scale up operations so instead of just acquiring cable businesses, he was actually trying to lay out the infrastructure to connect these various areas and scale up the entire operation, kind of consolidating them. In nineteen sixty eight, they would make another slightly weird purchase Comcast or or American Cable System still at that time, bought a Musaic franchise in Orlando, Florida. You're probably aware of music. Music if you're if you never directly experienced it, you definitely have probable. I'm guessing you've heard the term music is a company that would create and distribute very soothing music, sometimes very soothing versions of popular songs that would play in the background of things like elevators and grocery stores and you know other places, dentist office, that kind of stuff where it's supposed to, you know, lull you and relax you. And it often makes me angry because often I can recognize the original song that the music is doing, and it doesn't necessarily make me happy to hear it in a very laid back kind of approach at any rate, they wanted to purchase a franchise in Orlando, Florida, and one of the reasons this might be the case is because Ralph Roberts's brother, Joe, was an executive vice president of the Music Corporation, which might raise a few eyebrows today that two brothers are essentially doing business with one another and doing acquisitions of companies, one selling to the other, But at any rate, that's what happened in Night In. The company finally changed his changes its name to Comcast and reincorporates, this time in Pennsylvania. In nineteen seventy, the company reorganized so it's so off It's Florida Operations, which had just bought two years earlier to another company called STORER Communications, which will come back into play a little later in the episode. And Comcast began to expand into other markets, primarily Maryland at that point, and also explored options and limited partnerships rather than outright acquisitions, which gave the company a bit of an advantage in that through a limited partnership, Comcast could get access to customers but not have to commit so much of its operating funds to expand the company, and this way it would allow the company to grow without having to spend millions of dollars acquiring other cable systems although it's still pursued that as well, and the music party continued. At the same time, Comcast bought franchises and multiple cities like Detroit, San Diego, and Hartford, Connecticut. By Nino, Comcast was a to hold an initial public offering was able to launch as a publicly traded company. Stocks were traded on the NASDAK stock market and the ticker symbol was c m c s A, and it continued to grow. It would acquire smaller cable companies and incorporate them into its own service, and the company spread across the United States using these sort of acquisitions, but it was still finding it challenging to penetrate markets through other means. In other words, they were having trouble selling the idea of subscribing to Comcast. They found it easier to purchase the cable systems people were already using and then lump them under Comcast, and thus the people became Comcast customers by default. It wasn't necessarily that they chose Comcast, but rather that the company they had been a customer of before now belonged to Comcast, and that also included expanding its hold on music. By nineteen seventy three, Comcasts Music Network division was the largest independent musach operator. So music operates under a franchise system, which means that when Comcast would buy up a franchise would buy up one region and other franchises would remain independent of Comcast. But Comcast kept on doing this and thus became the largest independent musaic operator. So if you're a child of the early seventies and wondered where that easy listening music came from, there are good odds that Comcast was ultimately responsible. And also in nineteen seventy four, Ralph Roberts's son Brian started working at Comcast officially uh specifically working for Storecast as an intern, and by the following year he would start training as a cable installer, which included home installations and climbing poles to hook connections from drops to the home the home area, and by three he would become the general manager of the Trenton system for Comcast, and by four he would become vice president of Operations for the cable division. So within a decade of starting to work for the company officially, there are some reports that say that Brian Roberts was working at Comcast when he was just seven years old, which brings into questions some child labor laws, But at any rate, he within a decade he would go from intern to vice president of operations with a cable division. And uh, this also raised some questions because I mean, he's the son of one of the founders, so there's a little bit of legacy issue going on here. But he consistently showed that he was very dedicated to the company, so I don't mean to suggest that he didn't deserve this position. He certainly has been a great deal maker for Comcast and has led the company to some massive, massive business deals that we'll talk about in a second. But uh, it's still raised some eyebrows in the community of cable industry. We've got more to say about comcasts early history. After this commercial break in nineteen seventy six, the co founder, Daniel Aharon, would become the chairman of the National Cable and Television Association, which is essentially a lobby group. It's it's kind of an advocacy group for cable companies, cable industry, cable service providers, and was really focused on helping shape policy in the United States that would remove challenges obstacles and restrictions facing the cable industry, and in some cases these were restrictions that were entirely arbitrary and unfair. I don't mean to suggest that they were working to completely leverage everything so that cable companies could dominate all telecommunications industries, but rather to try and address some problems that the cable industry face. Because it was brand new, this was something, I mean even even by the seventies, this was still relatively new and still uh something that had to battle with much more entrenched systems like the telephone companies and the over the air broadcast companies. Also in nineteen seventy seven, Comcast would add HBO to twenty thousand customers in Pennsylvania with a five night preview, so customers got five nights free HBO, which was a fledgling company at that point, and afterward, Comcast received three thousand subscription orders once the preview period end, so it was a fairly successful preview. And if you listen to the story of HBO, which I believe was a three part episode that that I did, it's at least two parts at the new rate, but I did that quite a while ago. If you go and look at the Tech Stuff archives, you can find the HBO story where we talk a little more about how HBO also really shaped the cable industry as it became more and more important. In night Daniel Aaron would become UH. He would use his position as the Chairman of the National Cable Television Association or in c t A UH and successfully lobby the United States government to reduce restrictions on what cable operators could carry. So up to that point, there had been some limitations on some of the programming that cable operators could offer their customers, and often this was programming that their customers actually wanted access to, but the cable operators their hands were tied. They were not allowed by law to carry that programming. So the n c t A was able to argue successfully on behalf of cable operators and even reach the point where cable could offer up channels that weren't broadcast over the air, meaning that cable companies could now create or partner with creators to provide content that otherwise people would never see because there'd be no other way of getting it. That actually created a market advantage for cable over classic Over the year broadcasts because now not only could you get something that wasn't going to be affected by radio transmissions, but you could see content that would not be available to you otherwise. And by nineteen seventy eight, Comcast earnings were an excess of three million dollars, which is chicken feed compared to what they make today, but still was impressive at the time, and Comcast made its first international move in nineteen eighty three they expanded into the United Kingdom. The company was finding it increasingly difficult to acquire new operations in the United States. At that time, there were only a few major cable operators left that had not been scooped up by one of the chief competitors to Comcast, so that meant that there were only a few limited service areas, meaning there was very little potential for growth if Comcasts purchased those companies, and they were pretty expensive, so it wasn't a very attractive investment on the part of Comcast. But on the other hand, in the United Kingdom was a totally different story. Cable operators had barely touched the UK, so Comcast jumped on that opportunity. Meanwhile, back in the States, Comcast caught a lucky break when the United States government passed the Cable Act, which prevented telephone companies from entering the cable business, which was a stroke of luck for Comcast because the government had just broken up the Bell system, which you can hear about in our episodes on the History of A T and T, another multi part series that explains why the telephone system in the United States is the way it is and how the telecommunications industry changed as a result of it. In Comcast would purchase twenty six percent interest in Group W Cable Incorporated. Now that investment more than doubled the number of Comcast customers at that time, adding one point two million people to Comcast services. And Comcast also helped found a little shopping company called QVC and they invested three d eighty million dollars in the founding of that company. Now they did not own QVC, they owned an interest in QVC. And another big buy at that time was STORER Communications Incorporated. You may have remembered that just a few minutes ago I talked about STORER Communications where uh they There was the the buying of Musach and the selling of Musach. While Comcast purchased fifty interest in STORER Communications, in which propelled Comcast into fifth place among the largest cable TV operators in the US. The company now had two million subscribers, and that same year, Brian roberts was elected to the board of directors of Comcasts, so now Ralph J. Roberts Son is on the board of directors. Comcast would celebrate its twenty five years business and also acquire the American Cellular Network Corporation or m CELL. This creates a new division in the company called Comcast Cellular Communications, and over the years the division grows as Comcast acquires more cellular companies. And now we get to a complication, right because just a minute ago I talked about the Cable Act. It was an important point in the history of cable and telephone service. The Cable Act prevented telephone companies from getting into the cable business, and cable companies were likewise prevented into getting into landline telephone business. But the blossoming cell phone service industry was a different story. So Comcast could totally get into cell phones and not violate this restriction on landlines. So comcast acquisition marked the first time people in the United States could look to a non telephone company for phone service, which was massively important. It's really hard to actually express what that meant at the time, but keep in mind, like you have telephone companies that have been told, hey, you can't get into this other industry because it's blossoming, it's just starting, and we don't want to kill it before it gets a chance to establish itself. Meanwhile, the other side is getting into a related business for the telephone industry, and so you now have these massive companies in the telephone industry kind of scared about what's going to happen because they have limited options at their disposal. Now, this is all pretty complex, but it's going to get super crazy when I go on a little bit further. This is kind of where I wanted to end part one to talk about the possibilities that were ahead for Comcast. Now, one of the things I want to really drive home, and it's going to become even more clear when you listen to the next episode, is that Comcast continuously chose to acquire other companies in an effort to grow as a publicly traded company. One of the most important uh measures of a company's success is how much did it grow year over year that that operating really well isn't enough. A company has to grow to be considered valuable. And the way Comcast largely drove its growth was through purchasing other cable services. Again, it can be a challenge to add customers otherwise, So if you want to add customers, you've got a couple of different options ahead of you, but one of them is that you just buy up other systems and then automatically you have those customers added to you. Also, we were starting to see a world already where major cable companies were essentially making agreements with one another to lay off in certain regions. So you are starting to see where one cable company would provide service to an area and other cable companies would stay out of that area. In return, that first cable company would stay out of its competitors areas, which was great for the companies but not so great for consumers. This is why in lots of different regions in the United States, you really don't have many options as a customer. You may have just a single major cable service provider in your area, and you could look at something else like satellite service, or you might be able to look at smaller cable companies that are technically just piggybacking onto the larger cable company in the first place. And that's one of the big reasons why in Part two we're going to explore some of the controversies around Comcast. But there's tons of stuff to talk about in Part two, including how Brian Roberts continued his rise and in Comcast, how the founders kind of stepped awa a. All right, that wraps up that classic episode. Next week we will continue with the Comcast story Part two, which you know, again, we could probably do a part three after that, and maybe I will if you have suggestions for topics I should cover on future episodes of tech Stuff. There a couple of different ways you can reach out and let me know. One is to download the I Heart radio app. It's free to downloads free to use. Navigate over to the tech Stuff page just search tech Stuff in the search bar. It'll bring you right to it and you'll see that there's a little microphone icon. If you click on that, you can leave a voice message up to thirty seconds in length. If you would rather not do that, you can always reach out to me on Twitter the handle that we use for the show is text Stuff hs W. Just let me know what you would like to hear on future episodes. I look forward to hearing from you, and I'll talk to you again really soon. Text Stuff is an I Heart Radio production. For more podcasts from My Heart Radio, visit the I Heart Radio app, Apple Podcasts, or wherever you listen to your favorite shows. H

Welcome to tech Stuff, a production from I Heart Radio. Hey there, and welcome to tech Stuff. I'm your host, Jonathan Strickland. I'm an executive producer with I Heart Radio, and how the tech are you? It is time for a tech Stuff classic episode. This episode is called the Comcast Story Heart one. I bet you can't guess what next week's is called. This episode originally published on November four, two thousand and fifteen. It is of course covering the cable company Comcast, which had an interesting growth period. Uh and now, of course things are at a point where Comcast is kind of reaching a saturation point and requires other sources of revenue besides expanding into new markets. But we'll cover some of that in part two and clear this is one of those episodes where I could do an update because you know, two thousand fifteen to two thousand twenty two, we've been seeing a lot of changes in the cable space, not so much the I s P space, but definitely cable provider space. So I'll probably touch on that again by the end of the episode, but first let's listen to Part one, recorded and published on November four, two thousand fifteen. So the reason why I wanted to look at this. The thing that that kind of spurred me into talking about Comcast actually comes from a recent experience I had. So I'm recording this on Thursday, the twenty two of October two thousand fifteen. But on Monday, October nineteen, something special happened and I wanted to take part in it. That's something special was that Star Wars episode seven, the Force Awaitkins the the advanced tickets went on sale, and it was announced that they went on sale a little earlier than what people had originally anticipated. So I rushed to try and buy tickets, and one of the many things I tried to do was use Fandango. But it was very clear that there was an amazingly huge rush on tickets for the Fandango servers, as well as all the other services out there, and so you could say that the servers for Fandango weren't fully operational in the parlance of Star Wars, and I started getting irritated. But then I remembered that Fandango is owned by Comcast, and then I thought, anger leads to hate. Hate leads to podcasts. But I promise I will do my best to remain objective and dispassionate as we look at the company, its history and the role it plays in their entertainment. And it's a really long history too. So before I talked about Comcast in particular, let me set the stage with some history about cable television. Now. Cable tv got its start back in the nineteen forties in the United States, and there was a need for an alternative to over the air broadcasts because some people lived in remote locations that were too far away for over the air air waves to make it to their homes with any sort of fidelity, or they might live in areas where radio waves had trouble reaching, like in mountainous areas where a mountain might be blocking the radio waves. So cable TV was the solution, and the basic model was pretty simple in its design. In fact, the earliest models just involved people setting up an antenna on a really tall structure or a mountain or something like that, and then physically running a cable from the antenna to their television sets. But beyond that you started to get actual organized businesses that would do this on behalf of customers. You, as a customer, would pay the business for the access to these over the way air broadcast that otherwise you would not be able to reach. So you would have a broadcast station that would send out television along a certain channel or frequency of radio waves, and your cable station would essentially just be a set of receivers antenna in other words, which would pick up these broadcasts and then feed them through physical cables to their destinations. So early cable was still very much reliant on over the air broadcast. It was just an alternative way to get that content, and channels don't take up much bandwidth on a physical cable. Each channel is six mega hurts, and a cable is capable of holding hundreds of mega hurts of signals, and using compression, you can even send multiple stations down a single six mega hurts channel, So you can blast a huge amount of channels through a single cable, and the cable box or television at the other end of that cable can tune into specific channels and block all the others out. In other words, imagine that you are in a room and there's every actor you've ever known about in that room, and they're all acting their hearts out at you at the same time. But you have the ability to tune into a specific actor and tune out everybody else. That's basically what's going on with cable on a technological level. And when you opt into a cable bundle, often that means that you're also getting the cable company to decrypt uh information. So what's happening on the cable side, the cable operator side, is that they will encrypt certain channels, like pay channels that otherwise you would get for free. If you didn't have that encryption, then you, as a customer would be able to access everything a cable channel operator had to offer. But by encrypting it, then the cable company can control which channels you can actually view and which ones are off limits. When you opt in to a cable bundle, like you you subscribe to a specific cable service, they essentially send a message to your television or a cable box and that allows you to decrypt the signal on your end so that you can actually watch it. And the United States, communities in Pennsylvania, Oregon, and Arkansas were among the first to receive cable service, and by that I mean people were actually going out and setting up these antenna By nineteen fifty two, there are about seventy actual cable systems in the entire country, So these were actual companies that had taken the same sort of model that these enterprising individuals had followed and actually made a business out of it. They only had about fourteen thousand customers back in nineteen fifty two. But cable television had a big advantage over home antennas in that if you use a sophisticate antenna and you were able to put it on a really tall building or a mountain or some other really tall structure, you could pick up signals from further away than folks who are just using regular rabbit ears on their televisions, which meant that cable customers sometimes could pick up signals from other broadcast regions, so you might be able to get content from multiple large cities. If you lived kind of in between two big cities and you had this cable, it might mean that you were able to double your programming options. At least. It may be that, you know, the two affiliates of of a major broadcast station are showing more or less the same thing, but throughout the day you would have some different options available to you, which made cable fairly attractive. It was sort of the beginning of cable's advantage over over the air broadcast, although, as we'll talk about a little bit later, over the air still had a lot of other advantages. So interest in cable TV began to grow, particularly among people who just couldn't get over the air easily. By nineteen sixty two, the number of customers had grown to more than eight hundred thousand people in the United States, So in ten years it went from fourteen thousand customers to eight hundred thousand in the US. Cable TV was becoming a viable alternative, even in communities that didn't have problems accessing over the year signals. But it was also one of those things that cities were starting to look into because if you lived in a city with lots of high rise buildings, sometimes that would block radio signals too. So it was one of those things that that you could see the the benefit, the potential application, but it was still going to be really expensive to roll out the infrastructure. All right, Well, that that sets the groundwork for what the cable industry was like in the early sixties. Let's take a look at Comcast specifically. The company actually traces its history back to nineteen sixty three. That's when Ralph J. Roberts, Daniel Aaron and Julian A. Broad Ski purchased a small cable TV operator called American Cable Systems, which was in Tupelo, Mississippi, and that service had just one thousand, two hundred subscribers and that was it. The three businessmen spent five hundred thousand dollars on that purchase. So who were these guys? Well, Ralph J. Roberts grew up in New York and in Philadelphia. He served in the United States Navy before going on to work several different jobs. He gradually earned enough money to purchase a business of his own. He and his brother went into a business they invested in, a company called Pioneer Suspender Company. Turns out there was money in Suspenders because he and his brother decided to sell the business off later on, and with that money it allowed them to invest in other companies. So Ralph Roberts ended up looking into the world of TV, and it was reportedly Roberts who came up with a name Comcast. In ninet lines of several years down the road, he would combine the words communications and broadcast together to create the name Comcast, and he would serve as Comcast Chief executive Officer for more than four decades. Uh Ralph J. Roberts passed away in June of two thousand and fifteen, so very recently as of the recording of this podcast. Now. Daniel Aharon was born in nineteen twenty six in Giessen, Germany. His family escaped Germany during the rise of the Nazi Party in World War Two and they settled in Queens, New York. Now. Tragically, when he was just thirteen years old, he lost his mother. She committed suicide, and less than a month later, his father also committed suicide. Daniel Aaron was orphaned and he was not yet a citizen. He continued to live in New York and eventually he would be drafted and sent to Germany during World War Two. When he returned, he pursued a career in journalism and public relations. Eventually he entered the cable business and that's when he met Roberts and agreed to co found Comcast. In his obituary, he was referred to as the conscience of the company, famously even buying coffee for picketing employees who were in a labor dispute with Comcast. So he was sort of the working man's representative among the three co founders of this company. He passed away in two thousand three. We'll be back with more of Comcast's history after this quick break. Julian Brodsky grew up in Philadelphia. He had served in the United States Army and he became an accountant after he left the service. So Bronsky served as Robert's accountant, Ralph J. Roberts. So he was actually the accountant for Ralph J. Roberts, and was approached by Roberts and by Aaron when they were preparing to purchase this company, this little cable company in Tiple of Mississippi, and Brodsky's main role was to raise money for the company. In two thousand eleven, Brodsky retired as the vice chairman of the company, and of the three founders, he is the only one who is still alive as of the recording of this podcast. Now. Daniel Aaron is credited with having compared the three co founders as three people trying to drive a single car, and he said that Brodsky was the guy who had his foot on the accelerator as he was raising capital for the venture. Uh, Meanwhile, his own foot, Aaron, his own foot was on the break to make sure the company was a good corporate citizen, stepping on the brakes to slow down the company if he thought that they were about to do something reckless or damaging or or just unethical. And meanwhile, or alf Day Roberts, his hands were on the steering wheel, guiding the company along. In those early days of cable, the company faced some pretty big challenges. According to the founders, they actually had to act as door to door salespeople on occasion in an effort to grow. So they were physically going out knocking on people's doors and telling them about cable service. In an effort to get more customers. They came to the conclusion that expansion would require purchasing other cable companies. And this is a philosophy that Comcast has stuck with time and time again over its long history. They have purchased numerous companies that I will go into in some detail throughout these two episodes. Now, originally they focused on other cable services in the state of Mississippi. So they began to expand both in eastern and western Mississippi and really focused on that state, but they were still finding it difficult to get enough customers to make a profit after going through the expense of setting up and maintaining cable systems. So, in other words, they're operating expenses were too close to the amount of money they were bringing in. It wasn't really a fast growing company. It wasn't a fast growing business, and they were trying to find new ways to add to that as quickly as they possibly could. In the company, which at that point was still known as American Cable Systems, purchased another company called Storecast Corporation of America. Here's the difference. Though Storecast was not a cable service company, it was a marketing firm. And only was it a marketing firm, it was a marketing firm that had a very specific kind of clientele. They were chiefly known for helping food companies work with supermarkets to maximize sales prices are sales of the products, by placing those products in prominent locations. In other words, they would go into a supermarket on behalf of a client. Let's say wonder Bread. I'm just taking that as a random example. I don't know if wonder Bread was actually one of their clients. But let's say they go into a supermarket. They're representing Wonderbread, and they go to the bread aisle and they look around and they say, well, this is not great for our client. We recommend you move this to this shelf. You're gonna move more product this way. You're gonna increase your sales. Our client will be happy, you'll be happy. That's the kind of work they were mostly known for doing. So a little odd that Comcast, or at that time, American Cable Systems would purchase this type of company. Comcast continued to try and grow through acquisitions during this time, and in nineteen sixty six, Ralph J. Roberts turned his attention to Philadelphia. Keep in mind, that's one of the cities he grew up in New York and Philadelphia is where he spent in his childhood, and he bought cable systems that were serving the suburbs of Philadelphia, and later on he would also purchase a few that we're serving western Pennsylvania. Philadelphia is in the east part of Pennsylvania. He then again to expand that service into neighboring communities and an effort to scale up operations so instead of just acquiring cable businesses, he was actually trying to lay out the infrastructure to connect these various areas and scale up the entire operation, kind of consolidating them. In nineteen sixty eight, they would make another slightly weird purchase Comcast or or American Cable System still at that time, bought a Musaic franchise in Orlando, Florida. You're probably aware of music. Music if you're if you never directly experienced it, you definitely have probable. I'm guessing you've heard the term music is a company that would create and distribute very soothing music, sometimes very soothing versions of popular songs that would play in the background of things like elevators and grocery stores and you know other places, dentist office, that kind of stuff where it's supposed to, you know, lull you and relax you. And it often makes me angry because often I can recognize the original song that the music is doing, and it doesn't necessarily make me happy to hear it in a very laid back kind of approach at any rate, they wanted to purchase a franchise in Orlando, Florida, and one of the reasons this might be the case is because Ralph Roberts's brother, Joe, was an executive vice president of the Music Corporation, which might raise a few eyebrows today that two brothers are essentially doing business with one another and doing acquisitions of companies, one selling to the other, But at any rate, that's what happened in Night In. The company finally changed his changes its name to Comcast and reincorporates, this time in Pennsylvania. In nineteen seventy, the company reorganized so it's so off It's Florida Operations, which had just bought two years earlier to another company called STORER Communications, which will come back into play a little later in the episode. And Comcast began to expand into other markets, primarily Maryland at that point, and also explored options and limited partnerships rather than outright acquisitions, which gave the company a bit of an advantage in that through a limited partnership, Comcast could get access to customers but not have to commit so much of its operating funds to expand the company, and this way it would allow the company to grow without having to spend millions of dollars acquiring other cable systems although it's still pursued that as well, and the music party continued. At the same time, Comcast bought franchises and multiple cities like Detroit, San Diego, and Hartford, Connecticut. By Nino, Comcast was a to hold an initial public offering was able to launch as a publicly traded company. Stocks were traded on the NASDAK stock market and the ticker symbol was c m c s A, and it continued to grow. It would acquire smaller cable companies and incorporate them into its own service, and the company spread across the United States using these sort of acquisitions, but it was still finding it challenging to penetrate markets through other means. In other words, they were having trouble selling the idea of subscribing to Comcast. They found it easier to purchase the cable systems people were already using and then lump them under Comcast, and thus the people became Comcast customers by default. It wasn't necessarily that they chose Comcast, but rather that the company they had been a customer of before now belonged to Comcast, and that also included expanding its hold on music. By nineteen seventy three, Comcasts Music Network division was the largest independent musach operator. So music operates under a franchise system, which means that when Comcast would buy up a franchise would buy up one region and other franchises would remain independent of Comcast. But Comcast kept on doing this and thus became the largest independent musaic operator. So if you're a child of the early seventies and wondered where that easy listening music came from, there are good odds that Comcast was ultimately responsible. And also in nineteen seventy four, Ralph Roberts's son Brian started working at Comcast officially uh specifically working for Storecast as an intern, and by the following year he would start training as a cable installer, which included home installations and climbing poles to hook connections from drops to the home the home area, and by three he would become the general manager of the Trenton system for Comcast, and by four he would become vice president of Operations for the cable division. So within a decade of starting to work for the company officially, there are some reports that say that Brian Roberts was working at Comcast when he was just seven years old, which brings into questions some child labor laws, But at any rate, he within a decade he would go from intern to vice president of operations with a cable division. And uh, this also raised some questions because I mean, he's the son of one of the founders, so there's a little bit of legacy issue going on here. But he consistently showed that he was very dedicated to the company, so I don't mean to suggest that he didn't deserve this position. He certainly has been a great deal maker for Comcast and has led the company to some massive, massive business deals that we'll talk about in a second. But uh, it's still raised some eyebrows in the community of cable industry. We've got more to say about comcasts early history. After this commercial break in nineteen seventy six, the co founder, Daniel Aharon, would become the chairman of the National Cable and Television Association, which is essentially a lobby group. It's it's kind of an advocacy group for cable companies, cable industry, cable service providers, and was really focused on helping shape policy in the United States that would remove challenges obstacles and restrictions facing the cable industry, and in some cases these were restrictions that were entirely arbitrary and unfair. I don't mean to suggest that they were working to completely leverage everything so that cable companies could dominate all telecommunications industries, but rather to try and address some problems that the cable industry face. Because it was brand new, this was something, I mean even even by the seventies, this was still relatively new and still uh something that had to battle with much more entrenched systems like the telephone companies and the over the air broadcast companies. Also in nineteen seventy seven, Comcast would add HBO to twenty thousand customers in Pennsylvania with a five night preview, so customers got five nights free HBO, which was a fledgling company at that point, and afterward, Comcast received three thousand subscription orders once the preview period end, so it was a fairly successful preview. And if you listen to the story of HBO, which I believe was a three part episode that that I did, it's at least two parts at the new rate, but I did that quite a while ago. If you go and look at the Tech Stuff archives, you can find the HBO story where we talk a little more about how HBO also really shaped the cable industry as it became more and more important. In night Daniel Aaron would become UH. He would use his position as the Chairman of the National Cable Television Association or in c t A UH and successfully lobby the United States government to reduce restrictions on what cable operators could carry. So up to that point, there had been some limitations on some of the programming that cable operators could offer their customers, and often this was programming that their customers actually wanted access to, but the cable operators their hands were tied. They were not allowed by law to carry that programming. So the n c t A was able to argue successfully on behalf of cable operators and even reach the point where cable could offer up channels that weren't broadcast over the air, meaning that cable companies could now create or partner with creators to provide content that otherwise people would never see because there'd be no other way of getting it. That actually created a market advantage for cable over classic Over the year broadcasts because now not only could you get something that wasn't going to be affected by radio transmissions, but you could see content that would not be available to you otherwise. And by nineteen seventy eight, Comcast earnings were an excess of three million dollars, which is chicken feed compared to what they make today, but still was impressive at the time, and Comcast made its first international move in nineteen eighty three they expanded into the United Kingdom. The company was finding it increasingly difficult to acquire new operations in the United States. At that time, there were only a few major cable operators left that had not been scooped up by one of the chief competitors to Comcast, so that meant that there were only a few limited service areas, meaning there was very little potential for growth if Comcasts purchased those companies, and they were pretty expensive, so it wasn't a very attractive investment on the part of Comcast. But on the other hand, in the United Kingdom was a totally different story. Cable operators had barely touched the UK, so Comcast jumped on that opportunity. Meanwhile, back in the States, Comcast caught a lucky break when the United States government passed the Cable Act, which prevented telephone companies from entering the cable business, which was a stroke of luck for Comcast because the government had just broken up the Bell system, which you can hear about in our episodes on the History of A T and T, another multi part series that explains why the telephone system in the United States is the way it is and how the telecommunications industry changed as a result of it. In Comcast would purchase twenty six percent interest in Group W Cable Incorporated. Now that investment more than doubled the number of Comcast customers at that time, adding one point two million people to Comcast services. And Comcast also helped found a little shopping company called QVC and they invested three d eighty million dollars in the founding of that company. Now they did not own QVC, they owned an interest in QVC. And another big buy at that time was STORER Communications Incorporated. You may have remembered that just a few minutes ago I talked about STORER Communications where uh they There was the the buying of Musach and the selling of Musach. While Comcast purchased fifty interest in STORER Communications, in which propelled Comcast into fifth place among the largest cable TV operators in the US. The company now had two million subscribers, and that same year, Brian roberts was elected to the board of directors of Comcasts, so now Ralph J. Roberts Son is on the board of directors. Comcast would celebrate its twenty five years business and also acquire the American Cellular Network Corporation or m CELL. This creates a new division in the company called Comcast Cellular Communications, and over the years the division grows as Comcast acquires more cellular companies. And now we get to a complication, right because just a minute ago I talked about the Cable Act. It was an important point in the history of cable and telephone service. The Cable Act prevented telephone companies from getting into the cable business, and cable companies were likewise prevented into getting into landline telephone business. But the blossoming cell phone service industry was a different story. So Comcast could totally get into cell phones and not violate this restriction on landlines. So comcast acquisition marked the first time people in the United States could look to a non telephone company for phone service, which was massively important. It's really hard to actually express what that meant at the time, but keep in mind, like you have telephone companies that have been told, hey, you can't get into this other industry because it's blossoming, it's just starting, and we don't want to kill it before it gets a chance to establish itself. Meanwhile, the other side is getting into a related business for the telephone industry, and so you now have these massive companies in the telephone industry kind of scared about what's going to happen because they have limited options at their disposal. Now, this is all pretty complex, but it's going to get super crazy when I go on a little bit further. This is kind of where I wanted to end part one to talk about the possibilities that were ahead for Comcast. Now, one of the things I want to really drive home, and it's going to become even more clear when you listen to the next episode, is that Comcast continuously chose to acquire other companies in an effort to grow as a publicly traded company. One of the most important uh measures of a company's success is how much did it grow year over year that that operating really well isn't enough. A company has to grow to be considered valuable. And the way Comcast largely drove its growth was through purchasing other cable services. Again, it can be a challenge to add customers otherwise, So if you want to add customers, you've got a couple of different options ahead of you, but one of them is that you just buy up other systems and then automatically you have those customers added to you. Also, we were starting to see a world already where major cable companies were essentially making agreements with one another to lay off in certain regions. So you are starting to see where one cable company would provide service to an area and other cable companies would stay out of that area. In return, that first cable company would stay out of its competitors areas, which was great for the companies but not so great for consumers. This is why in lots of different regions in the United States, you really don't have many options as a customer. You may have just a single major cable service provider in your area, and you could look at something else like satellite service, or you might be able to look at smaller cable companies that are technically just piggybacking onto the larger cable company in the first place. And that's one of the big reasons why in Part two we're going to explore some of the controversies around Comcast. But there's tons of stuff to talk about in Part two, including how Brian Roberts continued his rise and in Comcast, how the founders kind of stepped awa a. All right, that wraps up that classic episode. Next week we will continue with the Comcast story Part two, which you know, again, we could probably do a part three after that, and maybe I will if you have suggestions for topics I should cover on future episodes of tech Stuff. There a couple of different ways you can reach out and let me know. One is to download the I Heart radio app. It's free to downloads free to use. Navigate over to the tech Stuff page just search tech Stuff in the search bar. It'll bring you right to it and you'll see that there's a little microphone icon. If you click on that, you can leave a voice message up to thirty seconds in length. If you would rather not do that, you can always reach out to me on Twitter the handle that we use for the show is text Stuff hs W. Just let me know what you would like to hear on future episodes. I look forward to hearing from you, and I'll talk to you again really soon. Text Stuff is an I Heart Radio production. For more podcasts from My Heart Radio, visit the I Heart Radio app, Apple Podcasts, or wherever you listen to your favorite shows. H