As Comcast Chairman and CEO Brian Roberts explains it, the economic hurdle is too great for the operator to consider going over the top with subscription streaming video services that would compete not only with Netflix Inc. (Nasdaq: NFLX), but with Comcast's own MSO brethren, as well.
"I don't think there is a business model ... where you have relationships with customers that are way outside of our footprint that we can make money [from]," Roberts said in Wednesday morning's earnings call, responding to a question about whether the MSO was considering an OTT video strategy.
"We had some free on-demand product from Fancast," Roberts said, referring to the Web video portal Comcast launched in 2008 and eventually morphed into Xfinity TV Online. "It did not prove profitable." (See Comcast Fires Up Fancast.)
The concept of an MSO going off-net to deliver on-demand and linear programming services has been a hot topic in recent years, especially as losses of basic video subscribers continue to mount. Adaptive streaming and video-optimized content delivery networks (CDNs) -- pieces that Comcast already has in place -- make the idea technically feasible. (See Q&A: Former Comcast CTO David Fellows, Elemental Eases Into Comcast OTT Role , Verismo Gives Cable an OTT Weapon of Its Own and Roku: Why Cable Should Go Over the Top.)
Comcast, however, is "pretty focused inside the footprint," Roberts said.
Besides, obtaining off-net programming rights represents another barrier, not to mention that such a strategy would turn the clubby cable industry on its head if MSOs were suddenly competing for subscribers in each other's backyards.
For the near term at least, Comcast and other MSOs are expected to focus on authenticated TV Everywhere offerings that extend the customer's subscription video service to multiple devices and give cable a way to counter cord-cutting.
Other tidbits from this morning's call:
- Comcast has Docsis 3.0 deployed to 90 percent of its plant, and its Extreme 105Mbit/s tier now reaches 80 percent of its footprint.
- The MSO is raising the downstream speeds of its flagship cable modem service from 12 Mbit/s to 15 Mbit/s and its Blast! Tier from 20 Mbit/s to 25 Mbit/s.
- The MSO's video-on-demand (VoD) library is up to 30,000 "choices."
— Jeff Baumgartner, Site Editor, Light Reading Cable