Why Comcast Doesn't Need to Fear Streaming Video
As Comcast's earnings report proves, the cable companies and broadcast networks who fear the Internet taking away precious cable subscribers have a lot to gain from the streaming viewing trend. Namely: A new place to profit off of content licensing.
As Comcast's earnings report proves, the cable companies and broadcast networks who fear the Internet taking away precious cable subscribers have a lot to gain from the streaming viewing trend. Namely: A new place to profit off of content licensing. Even as streaming services are the rage, Comcast managed to have a profitable quarter with the help of people watching its shows online.
Now that it owns NBC's content. Comcast has seen its NBC unit post a $305 million increase in licensing fees this year, "primarily the result of a licensing agreement for prior season and library content," explains the report. Though that just vaguely means "selling reruns," sources told AllThingsD's Peter Kafka that really refers to the NBC-Netflix deal renewal signed last July, which kept old Office and Parenthood episodes on Netflix. Even as it may have snatched away some video subscribers, the Internet has given Comcast another place to sell content.
The big fear for cable providers is that the Internet will give subscribers an out, yet television watching is not a zero-sum game. The media viewing pie has just gotten bigger, and those who own the content will continue to benefit. Take Aereo, the latest streaming method, which for $12 a month allows subscribers to stream the major networks. The service will draw more viewers to broadcast TV, argues Barry Diller, who created FOX and has invested in the company. Those are viewers who didn't exist before, like those who have already forsaken cable TV packages for Netflix-Hulu combos. "Creators and owners of content have nothing to fear from this innovation," added venture capitalist Fred Wilson in an email to Media Decoder's Brian Stelter. "It will be like all other tech innovations before. It will lead to greater profits for them."
The other, more obvious, way cable providers have yet to lose to the Internet, is that they still control it. Though both Comcast and Time Warner reported losing 17,000 and 129,000 video subscribers, respectively, these companies both saw an increase in broadband subscriptions. Broadband, of course, happens to be the best way to watch shows online, be that through Aereo, Hulu, Netflix, or whatever other service is on the horizon.
Image via Shutterstock by Poleze.