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OTT

Comcast Won't Go Over the Top

Comcast Corp. (Nasdaq: CMCSA, CMCSK) is still losing gobs of video subscribers each quarter, but the MSO isn't about to start chasing after customers outside its traditional cable footprint to make up the difference. (See Comcast Loses Video Subs, Profits Surge .)

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

Jeff Baumgartner 12/5/2012 | 4:57:12 PM
re: Comcast Won't Go Over the Top

Also, the last time I talked at length with Joe Ambeault of Verizon, we didn't get into the OTT, out of franchise discussion, but it did seem like most of what they are concentrating is of the authenticated TV Everywhere variety. Here's the Q&A we did awhile back.  JB

Jeff Baumgartner 12/5/2012 | 4:57:12 PM
re: Comcast Won't Go Over the Top

I don't recall them making any public declarations about it either way -- I'll have to check -- but aside from the biz model challenges Roberts pointed out today, I'd wonder if they'd face a difficult time getting the rights to offer the higher end content OTT  that didn't have to be tied to a traditional subscription pay-TV package. so it's still more a biz question. Seems like technology is the lowest barrier here for Comcast, Verizon, AT&T, et al. JB

pilchard 12/5/2012 | 4:57:12 PM
re: Comcast Won't Go Over the Top

Jeff,


What about AT&T U-verse and Vz FIOS?  Are they making similar pledges to not go after subscribers outside their footprints with an OTT offer?


Merci,


P

paolo.franzoi 12/5/2012 | 4:57:12 PM
re: Comcast Won't Go Over the Top

I wonder if they should offer OTT in their footprint to their competitors customers. 


seven


 

paolo.franzoi 12/5/2012 | 4:57:11 PM
re: Comcast Won't Go Over the Top

So what I was thinking is a low cost service to say DSL customers (if you are Comcast) that allows you to send your IP coded content to those end users inside your serving errors.


seven


 

Jeff Baumgartner 12/5/2012 | 4:57:11 PM
re: Comcast Won't Go Over the Top

Sure, splash a different brand on it and make 'em think it's something new.  Under the top?  :)


JB

Jeff Baumgartner 12/5/2012 | 4:57:10 PM
re: Comcast Won't Go Over the Top

@KarlBode at DSL Reports just tweeted a reminder that there has been some evidence that VZ's looked at offering some VoD Flex-View-qualified content over the top  to non-FiOS TV subs . But not sure if that means non-FiOS TV subs in FiOS markets or outside of them too. JB  

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