At Comcast, the Art of the Deal Drives Movement of TV Content to the Web
Comcast, the largest cable-television provider in the U.S., tells its hometown newspaper, The Philadelphia Inquirer, that it has lined up 24 cable channels to participate in a service that will allow its subscribers to view on the Internet all of the content they get from Comcast on television. The program was originally announced in June by Comcast and Time Warner, the second largest cable-television provider in the U.S. After a subsequent trial of the service last summer, with 5,000 customers, the company said it would make it available to all 24 million subscribers by January 1.
As noted in The Inquirer article and in a June Knowledge at Wharton report – "Cable TV Follows Its Subscribers to the Internet" – the service, now branded "On Demand Online," is part of a strategy by cable companies to hold on to their subscriber base as more and more television content becomes available on the web — usually for free. Comcast's service will also be free — but only to its cable subscribers. The programming will be shown on an enhanced web-based video player at Comcast's Fancast site and at Comcast.net.
Meanwhile, also in an effort to contend with the growth of the web as a distribution channel for video, Comcast continues its talks to buy a 51% stake in NBC Universal from General Electric. The deal Comcast is pursuing would allow it to eventually buy the whole content-gushing operation. Having content of its own could help Comcast weather a gradual migration of cable subscribers to the web. Comcast already owns a large portfolio of web channels, and it is the nation's largest distributor of broadband Internet access.
Comcast appears wise to have a hand in multiple distribution channels and in content. As Wharton legal studies and business ethics professor Andrea M. Matwyshyn explained in the June Knowledge at Wharton article, "There's not one model or platform that's going to clearly win" the biggest share of the video audience. "Increasingly, there will be individual viewing styles. Some consumers will stick to cable. Others don't like watching TV on laptops. Others don't want TV and will pick shows à la carte. Viewing habits will be consumer specific."