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How Comcast Could Take on YouTube

Mari Silbey
3/11/2014
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Not long ago, reports surfaced that Comcast had a YouTube-like service under development. According to The Information and some speculative analysis, the giant MSO is planning a new video service with short-form content designed to be delivered right alongside traditional TV service on a cable set-top box.

The rumors, however, appear to have been overstated. Multiple sources have told us that there isn't anything imminent in Comcast Corp. (Nasdaq: CMCSA, CMCSK)'s video product plans. While the cable company has explored creating its own YouTube Inc. service, it doesn't appear -- at least at the moment -- to be interested in competing head to head with Google (Nasdaq: GOOG).

Comcast certainly has a lot on its plate right now. Between the proposed acquisition of Time Warner Cable Inc. (NYSE: TWC) and the continued rollout of Xfinity cloud-based services, the cable operator has a long operational to-do list.

Yet those same activities that are keeping Comcast busy today are also preparing it for a future where launching a short-form Web video service could make a lot of sense. The expanded footprint of a combined Comcast/TWC entity would give the bigger company greater scale to compete with YouTube nationally. Plus, Comcast's cloud-based infrastructure will make it more feasible for the company to store and deliver a wider range of content. (See Comcast Strikes $45B Deal for TWC and Comcast Launches Cloud DVR.)

Then there's the company's most recent acquisition of FreeWheel Media Inc. The online ad-serving company would give Comcast an easy way to monetize its own Web video content if it should choose to launch a YouTube competitor. (See Comcast Spins Wheel for FreeWheel.)

It's also worth noting that Comcast already delivers a significant amount of short-form and long-form video programming through cable set-tops and on the Web that doesn't fall under the category of traditional TV fare. Such Comcast offerings as the Karaoke channel, Sportskool, and the Reelz Channel all start to overlap with the type of content that YouTube now serves up online.

The bottom line is that while Comcast may not have a YouTube competitor in its bag of tricks today, it is well-equipped to package one up and bring it to market if the financials make sense in the future. It all comes down to the company's priorities.

— Mari Silbey, special to Light Reading

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SachinEE
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SachinEE,
User Rank: Light Sabre
3/23/2014 | 4:20:51 AM
Re : How Comcast Could Take on YouTube
Even if they have all the prerequisites and actually go on to launch such a service, it doesn't make sense that it makes them a direct competitor of Youtube. YouTube has a worldwide and internet based scope in video services. On the other hand, Comcast is a national player. I don't see anything like "Taking on Google".
SachinEE
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SachinEE,
User Rank: Light Sabre
3/20/2014 | 3:00:05 PM
Re : How Comcast Could Take on YouTube
Comcast may not have any such video service under development right now, but they look like preparing for doing so. Comcast's acquisition of Times Warner Cable Inc, FreeWheel Media Inc and launching of cloud service seem to be the necessary tools they are collecting that are required to launch a Youtube like service.
Mitch Wagner
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Mitch Wagner,
User Rank: Lightning
3/12/2014 | 11:45:32 PM
Re: Does YouTube really have a big network effect?
I'll go further: Why should Comcast create a new video network of any kind, rather than invest in or buying one?
DOShea
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DOShea,
User Rank: Blogger
3/12/2014 | 10:44:15 PM
Re: Does YouTube really have a big network effect?
Agree, why would Comcast want to do this, unless the point is not to beat YouTube at its own game, but to appeal to people not using YouTube much or at all who have Internet and TV and maybe even voice through Comcast. A clip site for customers of the biggest cable TV and biggest broadband provider is not exactly small potatoes.
smkinoshita
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smkinoshita,
User Rank: Light Sabre
3/11/2014 | 9:05:29 PM
Re: Does YouTube really have a big network effect?
@Mitch:  More importantly, why would Comcast want to even create a YouTube network?  YouTube took quite awhile to really begin to find itself and Google still can't leave the interface alone for more than a couple of months.  

Is there really any room or point to compete?  I don't think much of YouTube's revenue model, and there's not much room for other kinds of video product considering Hulu and Netflix are quite established.  Plus there's sites like Vimeo, Blip and more, nevermind Twitch.

While Comcast could create a YouTube network, unless they have a unique purpose I can't imagine why they'd want to even try for the life of me.

 
Mitch Wagner
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Mitch Wagner,
User Rank: Lightning
3/11/2014 | 8:46:47 PM
Re: Does YouTube really have a big network effect?
Why would anyone want to upload content to an imitation YouTube instead of YouTube?
Ariella
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Ariella,
User Rank: Light Sabre
3/11/2014 | 6:29:27 PM
Re: Does YouTube really have a big network effect?
@mhhf1ve I don't know if there is any functional advantage, but YouTube does have the advantage of name recognition and a lot of devices coming preloaded with an app for it.
mhhf1ve
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mhhf1ve,
User Rank: Light Sabre
3/11/2014 | 3:26:14 PM
Does YouTube really have a big network effect?
Sure, lots of ppl use YouTube to upload random viral videos... but is it really that hard for users to switch to some other video clip service? The biggest hurdle I can think of is that every YouTube-wannabe I've ever seen had a much worse user experience with lots of dropped frames or annoying load times for its videos. Youtube works REALLY hard to make sure it minimizes the spinning "loading gif" symbol.

 
thebulk
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thebulk,
User Rank: Light Sabre
3/11/2014 | 2:40:22 PM
Re: sure, but not really
@kq4ym, 

The only market I think they might even be able to get on board are non tech savey who might not use the internet frequently. Believe it or not there are a good amount, of all ages, though the number is shrinking. 

But I agree, that it will be hard to make finacial sense for such a product offering. 
kq4ym
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kq4ym,
User Rank: Light Sabre
3/11/2014 | 2:27:03 PM
Re: sure, but not really
Comcast is most likely lobbing a trial balloon with any rumors to take on YouTube. YouTube is so far ahead of the game, that unless there's something truly unique to program (and YouTube couldn't copy it) there's not going to be a short-form video form that would make any finacial sense for some time to come.
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