Google
 

Friday, April 27, 2007

Comcast attacks again


Not surprisingly, Comcast Corp. has joined the race over which Web site is going to become the top destination for TV shows, movies and other professionally produced videos. Point taken, it will be facing fierce competition, from Google Inc.'s YouTube to major Internet players including Amazon.com Inc., Time Warner Inc.'s AOL division, Joost, Brightcove and Apple Inc. It hopes to play the same middleman role on the Internet that it does on traditional TV. They buy programming from entertainment companies and packaging it for consumers. Earlier this month, Comcast announced plans to launch Fancast.com, an ad-supported free TV and entertainment site. Comcast has stuck deals to carry prime-time content produced by CBS, Fox and NBC on Fancast.

No question that Comcast's push into the Web comes at a time when there is widespread speculation that video on the Internet will pose a major threat to the cable industry's bread-and-butter TV business. And competition from other sources continues to rise as some programmers and movie studios already have begun to pipe high-quality video directly over the Internet to viewers' televisions, bypassing cable operators.

Strategically, Comcast’s move makes absolute sense. The company is the country's second-largest provider of high-speed Internet hookups, after AT&T Inc., with over 11.5 million customers. It already has used that business to turn its portal, Comcast.net, into one of the most visited domain on the Web for U.S. users. Not a minor accomplishment in the war to capture web traffic. It has been loading up Comcast.net with music videos, movie trailers and other short content as a way of attracting and retaining high-speed Internet subscribers. The move has been part of Comcast's broader strategy to combine its TV, Internet and telephone services. Also, Comcast also has begun looking to extract revenue out of its Web sites as well. The company currently is choosing among Google, Yahoo Inc., Microsoft Corp. and AOL for Internet advertising and search services for Comcast.net and its other sites.

On the other hand, it won’t be an easy task. Competing for viewers on the Internet presents a different set of challenges. In its traditional business, Comcast usually is the only cable operator in an area, giving it enormous leverage over programmers. But on the Web, Comcast will just be one of many sites carrying the same content. Full-length NBC shows already are being carried on the network's own site, iTunes and will also be available on a new Internet TV site that Fox and NBC are creating together. Further, customers have shown they don't all go to one place for content. So there might be an opportunity to give them as much choice as possibly can. However, competitors are adding social networking and other features to their sites to distinguish them from traditional television and this is a potential problem for a traditional TV programming provider with little or no experience with these new challenges.

Now, the most difficult part. How to create new places for consumers to view TV programming without hurting the value of their traditional cable business. So far Web TV doesn't seem to be cannibalizing traditional television as prime time shows offered on the Internet seem to increase the audience for their regular TV programming and keep up with a series by watching a missed episode on the Web. Of course, Comcast doesn't want to cede the central role it plays in traditional TV to some other player on the Internet. Comcast has designed Fancast to be the leading source of content and information on the Web about TV and the movies.

Bottom line, it’s still very early to name a winner on this amazing race. In my opinion, Comcast has the unique chance to become a friendly partner to content owners by giving them a place for offering video legally. And that is a major advantage on this cmplicated chess game.

1 comment:

Martin Galparsoro said...

Biby, Thanks for your comments. Please fee free to forward and share this blog with whomever you consider appropriate.

Cheers,

Martin