Comcast (Nasdaq: CMCSA) is laying out sheets of sticky flypaper to keep its subscribers close. The market just doesn't realize it yet.
Comcast is teaming up with Time Warner (NYSE: TWX) to launch the TV Everywhere movement, through which broadcasters and cable networks offer their content to cable subscribers at no additional cost online. With easy authentication and access through any broadband connection, consumers will be able to watch cable programming on demand -- and on the Web-blessed gadget of their choosing.
If this sounds familiar, it's because Comcast has been spearheading the movement through its Fancast.com site for months. TV Everywhere, on the other hand, is an open and non-exclusive model. Any cable, satellite-television, and telco video distributor is encouraged to jump on board. It just makes sense that Comcast, the country's largest cable company with 24.1 million subscribers, should lead the charge.
By offering convergence and convenience, Comcast hopes that TV fans won't cancel their subscriptions and just start consuming online videos. Just as Netflix (Nasdaq: NFLX) provides online streaming at no additional cost to subscribers of its unlimited DVD rental models, Comcast is giving its customers one less reason to do away with hefty cable bills.
The industry needs this development. Satellite television's DISH Network (Nasdaq: DISH) has been losing subscribers with every passing quarter. Cable providers are also noticing the migration.
"We are starting to see the beginnings of core cutting where people -- typically young people -- are saying, 'All I need is broadband,'" Time Warner Cable (NYSE: TWC) CEO Glenn Britt told investors during its fourth-quarter conference call in February.
Not everyone will necessarily be a winner with this move, though. If you can ultimately stream anything in your cable company's subscription package when you want it, will you still need a TiVo (Nasdaq: TIVO)? Cable companies may even be shooting themselves in the foot with the monthly premiums they charge for their own digital video recorders.
However, it's better to lose an add-on than to lose a customer. As the major networks reach out directly to their viewers with ad-supported online streams, and as more smartphones and netbooks hit the market to increase the ubiquity of Internet video, it's refreshing to see Comcast do something proactive.
Some items with immediate availability on your reading queue:
Like this article? Get our best articles delivered direct to your inbox at no cost. Sign up for Foolwatch Weekly by entering your email below.
Terms & Conditions
RSS Headlines
Fool UK