Some more details on Comcast’s (CMCSA) forthcoming Web video service:
– Comcast will launch the service, tentatively called ‘OnDemand Online’, later this year.
– It’s not directly going after Hulu, because Hulu is mostly TV shows from broadcast networks like NBC and Fox, its owners.
Comcast’s ‘OnDemand Online’, on the other hand, is mostly new content from cable networks that isn’t online yet. (Cable networks haven’t put as much content on Hulu yet or on the Web at all.)
Sure, everyone is always competing for eyeballs, viewing time, etc. And if Hulu can get some (or all) of that content eventually, they’ll be bigger rivals. But for now, it’s mostly different sets of content.
– Most of the content will be free if you subscribe to Comcast’s cable TV service. But it’s possible that there will be some pay-per-view stuff, too.
– Comcast will count this traffic toward its 250 GB monthly bandwidth cap. We don’t know how other cable providers — which have less generous caps than Comcast, and overage charges — will handle this.
– It will only be available to people who live in Comcast TV areas. It will not be available to people who can’t subscribe to Comcast or don’t live in a Comcast zone.
– It will not require a Comcast connection, however. If you are at work or (theoretically) on a plane, you could use it.
– Comcast is working with other cable companies on some technology aspects of the project, such as verifying that someone is a cable subscriber, or pays for a premium channel. But the cable companies are forging content deals with cable networks separately.
– No live TV, not now at least. This won’t replace your SlingBox, but will mostly complement Comcast’s video on demand service.
Why are these cable networks working with Comcast but not as freely with sites like Hulu? It’s a simple maths problem.
Cable companies like Comcast, Time Warner Cable (TWC), etc., generate a huge chunk — say, around half — of the revenue for cable networks. TV ads generate about half, too. Meanwhile, online ads generate very little. That is why Food Network might hypothetically put 10 seasons of “Good Eats” on Comcast’s ‘OnDemand Online’ but not on Hulu.
We don’t live in a Comcast city, but we could definitely see something like this making Comcast subscribers more likely to hold on to their cable TV subscriptions. Which is the point. (As well as keeping subscribers away from satellite, telco TV, etc.)
Comcast said Wednesday that it hasn’t lost any significant number of subscribers yet just because there’s more video available for free on the Web. And indeed, it looks like the pay-TV industry as a whole grew last year despite the recession, housing crash, Hulu, etc.
But that isn’t guaranteed forever. So Comcast and its peers are smart to do what they can to keep subscribers happy — and to keep as much cable content as possible out of Hulu’s hands.
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