Brian Roberts, CEO Comcast, said his company’s future hinges on the success of video-on-demand (VOD). That, he said, is why Comcast made its (unsuccessful) $56 billion bid last February in an attempt to acquire the Walt Disney Company.
Roberts noted that Comcast’s need to combine on-demand technology with content was underscored when Rupert Murdoch’s News Corp. purchased a controlling stake in DIRECTV, the satellite-to-home company. News Corp. already owns FOX Broadcasting.
For VOD to beat satellite, it has to provide lots of programming, whether it’s Disney cartoons or, as Comcast has begun offering lately, programming packages such as the NFL Network. The NFL channel provides 10- to 15-minute replays of the highlights of all the prior weekend’s football games. Comcast also recently announced a partnership with Sony and MGM to offer their libraries of movies and TV shows via VOD.
Achieving that depends on convincing content creators such as Disney to share their programming, he said. In some cases, that’s proving to be a challenge. Despite aggressive lobbying, Roberts said many content owners have been unwilling to let Comcast deliver their programs via VOD.
He said the problem is DVD sales are so good right now that movie companies can’t tick off Wal-Mart, the single largest revenue source for Hollywood.
For now, Roberts said, the cable industry is teetering on a razor’s edge between the old economy and the new. It has, for example, steadily eroded the ratings of broadcasters such as ABC, CBS and NBC. “Today, more people watch cable than broadcast television,” Roberts said. “This is the first year that’s been the case.” But the broadcasters’ advertising revenue still exceeds cable operators’. “It’s not even close. Broadcast advertising dollars are still double or triple cable’s.”
Roberts conceded that the broadcasters do still have strengths. “On Thursday night, even though NBC’s ratings are down, it is still the number-one destination for eyeballs. And, if you have a car you are launching, you want to get those eyeballs in the fastest way possible. Twenty years ago, [the broadcasters] had 90 percent of the viewing. Today, they have 20 or 30 percent, and they get more dollars for selling less. How long can you get away with that? I don’t know.
“With on-demand, we have servers with virtually unlimited content. We don’t care what you want to do, we just want you to do it a lot. And you can’t do any of that on satellite or broadcast.”