A Billion Demands for Comcast

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Comcast (Nasdaq: CMCSA) should erect some golden arches at its corporate headquarters, because it just reached a burger-like milestone: More than one billion programs have been ordered through its On Demand service year to date.

Comcast's On Demand product has shown excellent year-over-year growth. In 2004, customers ordered 567 million On Demand programs, so it's pretty obvious that cable consumers are increasingly loving this form of entertainment. On Demand delivers programming to homes via fiber-optic networks. Viewers can watch the content whenever they choose, and they can pause, rewind, or fast-forward it just like a movie or DVD.

Comcast has thousands of program hours to offer its subscribers. All of the important categories are covered, including music, movies, sports, and children's shows. Although I don't have a digital cable box, I can see how video on demand is a value-added proposition for the overall cable experience. The technology offers incredible convenience and the chance to catch classic movies and TV shows. The days of getting only recent movies on pay-per-view are over. Now companies like Disney (NYSE: DIS), Motley Fool Stock Advisor pick Time Warner (NYSE: TWX), and Viacom (NYSE: VIA) have the opportunity to truly leverage the older content in their respective libraries via the digital age. More recent shows are popular, too: An episode of Viacom's SpongeBobSquarePants is the top children's choice, with 1.3 million requests.

As the press release makes clear, "nearly 95% of On Demand programs are available at no additional charge." Nonetheless, On Demand's popularity might lead more subscribers to purchase fee-based video on demand. For example, World Wrestling Entertainment (NYSE: WWE) is now making money from its huge archive of programming, proving once again that content is truly king.

On Demand is on track to double last year's impressive viewing statistics, clearly indicating that this medium holds vast promise for future marketing opportunities; trailers and music videos are already used to great effect. Media conglomerates would be wise to keep making new money off their old programs, granting Comcast and other cable companies more happy viewers in the process.

Still, I'd rather be providing content than distributing it. Companies like WWE can squeeze distributors for the best licensing fees while avoiding high overhead costs for maintaining networks. Foolish investors should keep this in mind before ordering up any cable stocks for their portfolios.

Demand these Fool Takes:

• Comcast's Power Play
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• Share your thoughts on demand at the Comcast discussion board.

Fool contributor Steven Mallas owns shares of Disney. The Fool has a disclosure policy.