360 Degrees of AT&T and Comcast

Comcast is now able to add all of these high-end features seamlessly at a time when the dish -- that is, EchoStar(DISH Quote) -- can't. Other than the NFL package, the dish has been left behind.

In another year, lots of onerous cable carriage deals from the 1990s will roll off and further increase Comcast's margins. It's a great story. So is an emboldened AT&T with plenty of staff cuts ahead for BellSouth -- heck, maybe everyone will go! -- plus that juicy dividend and buyback.

These stocks have come a long way. But they have essentially sat out the last 10 years as they bought and bought and bought and competed and competed and competed and missed numbers and missed numbers and failed to grow. That's all past.

They go higher.

At the time of publication, Cramer had no positions in the stocks mentioned.

---

Cable: A Bet Against the Revolution, by Cody Willard

This is an expanded version of a column originally published on RealMoney on Oct. 24 at 11:57 a.m. EDT.

In his blog today, Jim Cramer wrote that AT&T (T Quote) and Comcast (CMCSA Quote) are poised to prosper. I disagree.

I believe both companies face secular declines in their core businesses. That secular decline has nothing to do with the competition between these two dinosaurs and their respective industries. No, it's never been about telco vs. cable. It's about broadcast vs. on-demand from the Internet.

The Internet's ability to distribute content on demand will completely disrupt the pricing paradigm in video distribution. Think about it this way: Cable companies like to talk about "bundling" -- that "triple play" concept in which voice, video and Internet are all on one bill -- as a positive for their customers. They actually have the nerve to call getting that stuff bundled together on one bill a "convenience." Hah! You know what I'd find convenient? To stop paying out the nose for a bundle of garbage that I'll never bother watching.

Cable companies sell me a bundle of 150 channels, even though I only want access to about 15 of them. So 90% of the channels for which I'm paying are a complete waste. But the cable companies will only offer me channels packaged that way. At least I can get the paper bill for that "bundled" cable on the same bill as my Internet and phone, though!

But it gets even worse. Not only do I want just 10% of the channels that I'm forced to pay for when I become a customer, but I also want to watch only about five to 10 hours of each of those channels every month. But the cable company "bundles" my favorite programs with hours and hours of other programming that I will never watch on those channels.

For example, I like "The Daily Show" on Comedy Central. But right before that show starts, the cable company makes me pay for "Drawn Together" or whatever it pushes into my TV set. In other words, I'm paying $150 a month for 150,000 hours of programming -- when all I want is 100 hours of programming a month. That means I'm watching less than one-tenth of 1% of the programming I'm paying for.

With the advent of ever-faster broadband, ever-faster processors and ever-better software, we're already seeing video Web sites that allow you to watch on demand only the content that you want. YouTube.com is just the first shot across the bow in the video revolution. Apple's (AAPL Quote) iTunes store is another. My new video Web site that's still in beta is another. (I'll tell you more soon!)