Former Comcast Corp. (Nasdaq: CMCSA, CMCSK) Chief Technology Officer David Fellows says Comcast could someday (but probably not anytime soon) use Internet video to market pay-TV programming to any Web surfer nationwide, including the subscribers of Time Warner Cable Inc. (NYSE: TWC) and other cable MSOs. And as some triple-play providers such as Frontier Communications Corp. (NYSE: FTR) look to exit the pay-TV business, Fellows says local service providers could cut deals with over-the-top video companies such as Netflix Inc. (Nasdaq: NFLX) or Hulu LLC to deliver programming to their customers.





As pay-TV firms ramp up efforts to distribute programming on the Web and mobile platforms, Fellows is betting on firms that will use the Internet to deliver entertainment to consumers outside of the traditional pay-TV system. He's a partner at Genovation Capital LLC , which recently invested in ZeeVee Inc. 's Zinc.tv, which is making a business of curating Web video metadata to allow subscribers to easily watch any program on devices ranging from an iPad to a cable set-top. (See Cable Vets Launch VC Firm.)

In an interview with Light Reading Cable, Fellows shares his thoughts on how over-the-top video could transform the pay-TV industry.



Contents:

— Steve Donohue, Special to Light Reading Cable



Light Reading Cable: Some people have said cable MSOs should go over-the-top themselves, that a company like Comcast should market Fancast Xfinity TV to all pay-TV subscribers nationwide, and that other cable MSOs could be compensated by selling access. Do you see the industry moving to that kind of world, where there would be a couple of national programmers, and most cable operators that sell programming today would just sell access like a utility company?

Fellows: I think that there may be some service providers out there that will say, "Look, this video business is tough, so maybe I should go find a partner. Go convince Time Warner -- 'Come sell your product here to my customers and go over my top, please.'" And for example, Frontier may be out doing that, saying, "Look, I'd like my customers to have access to a triple play, but this video business is hard. Comcast, will you go sell, and give me a little bit of a cut or a finder's fee?"

I think there will be service providers that will want to have big IPTV partners, and not want to do it themselves. And by the way, the partner may turn out to be Hulu or Netflix -- I’m not saying it needs to be Time Warner or Comcast. I think that will happen. We'll see over-the-top cable operators going over other people's tops in affiliation with them. [Ed. note: Fellows expects that some operators could invite Internet video providers to market programming to their subscribers. The operators could get a cut of the revenue, and would also profit from selling Internet access].

Light Reading Cable: Could local providers handle the traffic that would be generated from an over-the-top operator?

Fellows: You saw when Time Warner launched its iPad application ... the plumbing can't handle demand. I think the last thing a cable operator wants to do right now is go attack another cable operator's video base, or over-the-top video base, and have their networks crash. Be patient -- wait five years, let's get the bugs out. One step at a time, and then you’ll be ready for the perfect bank robbery.

Light Reading Cable: So we’re not going to see Comcast go over the top on Time Warner any time soon?

Fellows: I don't think so.

Next page: Backing Zinc.TV

Light Reading Cable: What drew you to Zinc.TV?Fellows: Zinc is a lot like Google in the old days. In the old days when Google was first exploding, it wasn’t about owning content. It wasn't about the data, it was all about the metadata -- pointing to the content, finding and discovering the content, and leading people to the content in a friendly fashion. That is exactly what Zinc is doing for full-length, high-quality video. They don't own the video, they don't host the video, they don't touch the video. What Zinc does is they've figured out the important thing here is the metadata, and curating it.

Light Reading Cable: One of Zinc's goals is delivering Internet video through set-tops. Why aren't cable MSOs already doing that?

Fellows: It's an education process on the side of all of the service providers. The original AOL was entirely a walled garden. What's going on now in the MSO world is the same kind of thing. If you look at Fancast Xfinity at Comcast, it's a closed garden. And even though Comcast is going to do a fantastic job of hosting and playing lots of high-quality video, they're probably not going to get it all, and that's where Zinc comes in. You actually publish to Zinc, meaning if Comcast had Zinc at its disposal, they could publish to Fancast, but Zinc also points to all of the other full-length video on the Internet.

When I looked at Zinc, I said, "Wow, this is three or four moves ahead on the chess board." It's not tied to hardware, and it's not tied to a specific walled garden, and yet it can accommodate that. If you have special hardware [such as an iPad, smartphone, or cable set-top] you can note that in Zinc.

And so as I try to think out three or four chess moves ahead, I think that the MSOs and the service providers -- Verizon and AT&T -- they will try to get a lot of content for their customers, but I don’t think anyone of them is going to get it all. This is a great search engine/guide/capability explainer -- a great way that an MSO is going to come to want to serve up video to their customers.

Next page: Zinc.TV's Cable Connection

Light Reading Cable: Are you helping Zinc cut deals with cable operators? The company told me they have a trial with a Tier 1 MSO. Can you tell me if that's Comcast?

Fellows: I guess I can tell you it's not Comcast -- it's not my special relationship which got them [a cable] deal. Where this winds up, I don't think that an MSO will wind up owning it -- I think the MSOs will wind up using it, and someone else, a supplier of some description to the cable industry will have this. Although that might be Google or it might be a Pace or a Cisco or a Motorola. There are a lot of places that could use this capability in enhancing their own product offerings.

Light Reading Cable: This sounds like an area where Rovi Corp. or TiVo Inc. (Nasdaq: TIVO) would compete, in terms of metadata, and making it easier for subscribers to navigate content, including Internet video content. Are TiVo and Rovi competitors to Zinc?

Fellows: In a sense, the answer is yes. In TiVo, their universe revolves around the TiVo box, and they have software that's important. What's a little bit different about Zinc is it's not tied to hardware. It's not tied to a specific implementation -- in fact it embraces all implementations.

It will tell you whether or not this content is viewable on this device that you happen to have, and it can also cue it up so if I'm doing a search on the train home and the content is in Flash, and I can't watch it now, I can stick it in the save bucket, and when I get home I can go to a Flash-capable device, and it's right there. The video-on-demand equivalent is it's in my saved items folder.

— Steve Donohue, Special to Light Reading Cable