Comcast to Offer Online TV Nationwide … And So It Begins
Already as nationwide as cable gets, Comcast—available in 41 states—is said to be “going national.” Bloomberg reports that Comcast has acquired rights from cable network owners to offer their channels nationwide. Sources who asked not to be identified told Bloomberg that the rights allow Comcast to sell video service (through “most favored nation” clauses) outside its traditional markets.
This means the company could offer a package of channels as an online-streaming service in cities like New York and Los Angeles . This gives the giant cable operator a net if rival online-TV services, such as Dish’s Sling TV and AT&T’s DirecTV, gain popularity with consumers.
A content ‘free for all’?
Does this deal set the stage for a content “free for all” in the United States? If one broadband service provider can sell nationwide, what’s stopping the rest of them?
Very little, it appears.
Once the top providers jump on the bandwagon residential customers will likely be able to access hundreds of cable providers’ content—probably within the next five years. They’ll leverage platforms from Roku, TiVo, Chromecast and others. Set-top boxes may disappear altogether!
Comcast reluctant to enter unchartered territory
Since cable providers like Comcast are required to negotiate separate rights from programmers to sell bundles of their channels beyond their territories, it makes sense that Comcast would want to secure the broadest possible rights, a source explained to Bloomberg.
For now, Comcast has no plans, however, to offer a video service nationwide, Bloomberg was told by the source. Company executives have repeated the sentiment, saying they still see opportunity to gain cable-TV subscribers in Comcast’s existing territories. In November, Comcast EVP for video services Matt Strauss said, “There is significantly more upside and profitability in going deeper and deeper into our base versus following a video-only offering OTT.”
Furthermore, Comcast hasn’t secured OTT rights from some of its partners, such as CBS and ESPN, with which it has contracts through 2020. The company would need to renegotiate those deals if it decided to expedite plans for a nationwide TV service.
Comcast has been able to keep the wolves at bay without having to offer an OTT TV product. The company has been able to grow its video base within its traditional footprint. Comcast, led by its new X1 platform, added 161,000 video subscribers in 2016.
Short-term moves in the cable space
According to Bloomberg, Comcast does have plans to try its hand at selling cellphone service later this year to customers within its footprint. Extending this service nationwide someday—something analysts speculate the company could do—would be better enabled by the ability to offer a more diverse range of offerings, such as the nationwide online video in question.
Comcast’s biggest rival, AT&T, introduced a live TV streaming service called DirecTV Now in November, and the service, with packages starting at $35 a month for over 60 channels, attracted more than 200,000 subscribers its first month. Hulu LLC and Alphabet Inc.’s YouTube have also announced new services that will offer a variety of major television channels to paying customers via the Internet. They compete with similar products from Dish’s Sling TV and Sony Corp.’s PlayStation Vue.
Comcast’s own video service delivery to customers has been evolving. It expanded its TV application availability from set-top boxes only to Roku devices for Comcast subscribers. Comcast also offers a “skinny bundle” of channels for streaming, which it plans to roll out to all its subscribers within its footprint this year.