Comcast to Compete With Comcast Online
posted Saturday May 28, 2011 by Scott Ertz
Comcast this week announced their involvement in a project called Xcalibur, whose "goal is to take everything we've learned from the web and tablets and bring it right back to your TV screen... As a network-based entertainment experience, the rich TV navigation and services will eventually carry over to many other TV devices including connected TVs and game consoles." That sounds like a direct attack on Netflix and Hulu to me.
Comcast is currently testing this service in Georgia, but being an IP-based service, they definitely have plans to role the service out nationwide. Their plans are to make this service available anywhere you are - TVs, phones and tablets, similar to the capabilities of the competition, Netflix and Hulu. The feature that Comcast plans to add to this service that the other guys don't offer? Live television.
Why is this the dumbest idea ever? Hit the break to find out.
The answer to that question is actually pretty easy - Comcast owns a major stake in Hulu. In fact, they own one of the founding companies - NBC Universal. Why, then, would Comcast want to create a service to compete with Hulu?
My theory is that no one sat down with Comcast executives after the NBC Universal merger and listed off the properties that NBC Universal owns and/or operates. This might be a helpful endeavor to provide for better ideas. It would certainly be easier for Comcast to include live programming into a new tier of Hulu Plus than it would be to create a whole new service. Hulu already has an active subscriber base that is nationwide, many of whom have cut their cable service and would probably pay a little bit extra to get live programming through Hulu than they currently pay if it means saving money off of the cable service. Seems like a win-win situation to me.
I would assume that their major problem is having to share the profits with the other shareholders. That problem is solved by the fact that the other major shareholders are also content producers, like Fox and CBS. Getting them to agree to allow their content to be streamed live over the Internet gets a lot easier when they own the service that will be streaming the content and therefor are already entitled to profits from said service.
While it might be difficult to convince non-shareholders to get involved at first, it seems like it would be A LOT easier if the project was already established and producing revenue rather than a start-up service that has no current providers save for the single owner - a competitor. How do you convince Viacom to allow Spike TV to be streamed live when the owner of the service owns G4TV?
The thing that Comcast has going for it is that they do own the majority of the popular networks (G4, Oxygen, anything NBC-branded, E!, SyFy, Bravo, A&E, Lifetime, USA, Style, Golf, even The Weather Channel). This gives them the ability to launch with a lot of great live and pre-recorded content, but it does alienate the other major broadcasters, including Viacom (Comedy Central, Spike TV, MTV, Nickelodeon), FOX (FX, Speed), ABC (Disney, ESPN), CBS (CMT, TNN, UPN/CW, Showtime) along with many smaller producers. This could prevent the new service from having a lot of popular content, such as Star Trek (CBS), The Simpsons (FOX), Boston Legal (ABC/Disney), among hundreds of others.
There is a lot riding on this for Comcast - they put a lot of money into NBC Universal and have rebranded their own networks as NBC Universal properties. If this decision ends up failing, there could be repercussions throughout television. Let's hope someone at NBC Universal picks up a phone this week and informs these guys they already have a very similar service in their brand and prevents the disaster we can all see coming.
