12/17/2010 6:00 AM
Comcast may claim the company is not concerned about “cord cutting,” but its actions say otherwise. Coming off a loss of more than one-quarter million subscribers in Q3 2010, you can bet Comcast is looking at OTT.
The "Wallstreet Journal" reported on Monday that Comcast was testing an Internet-enabled STB with a small set of subscribers in Augusta, GA. The set-top box, known as “Spectrum” by users and “Xcalibur” by Comcast personnel, provides some Web-like functionality. A Comcast spokeswoman told the "Journal," “We are testing many technological approaches to understand how best to meet consumer interest, and this small trial is one of those experiments.”
Comcast isn’t the only company trying to entice viewers to purchase its products by delivering Internet to the television set. DIRECTV, Verizon, Sony, Samsung, Panasonic, LG, Vizio and others have their own proprietary solutions permitting viewers some access to the Internet via the living room TV set. Some set manufacturers provide their own hosted Web portal, others simply allow access to popular social websites and a few widgets.
So far, some far smaller companies are leading the challenge in delivering content to home screens via OTT. Those include hardware companies like Roku and Boxee, and software providers including Hulu, ivi TV, Filmon, Play On and Netflix. Microsoft and Sony can deliver Internet to the television screen via their respective gaming platforms the Xbox and the PlayStation 3.
Two facets of the Comcast test are interesting. First, it’s not unexpected that a major MSO would experiment with a Web-enabled STB. After all, the entire television consumer industry is claiming that Google TV or some version of the technology is going to liberate millions of viewers and enable à la carte viewing. Were that to happen, it would represent a major disruption in the marketplace, especially for MSOs and satellite companies. It would be smart business to toy with the competing technology now, looking for advantage.
A second, and a more legalistic, view is that Comcast might have wanted to keep this particular story quiet as the FCC considers its merger with NBCU. All the merger’s opposition needs are a few more “see, I told you so...” examples of Comcast trying to block out the competition. This story probably wasn’t meant to be told, just yet.
Broadcasters need to keep a wary eye out for OTT delivery. According to a new report from The Diffusion Group, revenue from the delivery of Internet video to the TV will grow nearly sixfold over the next five years, from just less than $1 billion in 2009 to $5.7 billion in 2014.
Speaking personally, (I’m fighting my own battle with a local cable company over ever-increasing costs), I would love to have an alternative to today’s expensive cable/satellite providers. Research indicates that once consumers understand and can buy these less-expensive OTT methods to access entertainment, the few companies who now hold our entertainment wallets hostage had better watch out. Consumers will rush to implement these new solutions.
I have a question for readers. Would you give up tiered-cable/satellite TV for an OTT platform? What would it take to get you to switch?