TV Everywhere so far has been just a lot of hot air about what cable is going to do. But that ended today when an ocean of content was poured out onto the web by Comcast, as it took its regional trials and tuned them into national trials, flooding the entire US internet with free content for its 24 million subscriber homes throughout the US, under the product name of Fancast XFINITY TV.
That’s supposed to imply Comcast to Infinity and beyond perhaps, a motto most like that of Toy Story’s Buzz Lightyear. Chances are this business model will become the new standard right across the world in the rapidly growing Pay TV community, and will also be followed by all broadcast content in a similar deal. So perhaps Infinity is about right.
The new service will be available both at home and on-the-go, so that includes Comcast households with kids at college, will be able to give them passwords, and dad will most definitely be able to tune in while he is on the road. That move alone is likely to bring down all Hospitality pay TV services nationwide and label them ‘irrelevant.’
This is bigger than piracy in that it puts more pay TV content online than ever before. This is like 10 Hulus or YouTubes starting up at once and if the launch survives intact ‘ that is, no content companies sue Comcast and there is no perceptible increase in video piracy because of it ‘ then THIS is the new black, it will be THE business model that will ensure that cable survives.
‘Fancast XFINITY TV is a win for consumers and content producers. We’re giving customers access to content they love in new ways and opening up new opportunities for established and independent producers to make their content available on-demand’ said Matt Bond, Executive Vice President of Content Acquisition. ‘This new service brings consumers many movies and TV shows that have never been available online before.’
And where Comcast leads, the entire cable industry follows, leaving only the question of whether or not other pay TV services, such as DirecTV and DISH in the US, and IPTV services from companies like AT&T and Verizon, will make it one of the strings to their bow. It is likely that all of these companies will have no choice, because otherwise it will provide too much of an edge for one format of Pay TV over the other.
And the move sets the tone for a complete transition from specialized networks to entirely online delivery. Things like audience measurement and advertising delivery must be aligned online with their Pay TV counterparts, and become part of a new revenue equation for an industry which will rapidly reach the point where the underlying network is no longer truly relevant for a subscription.
We have said in these pages many times that TV Everywhere is a business model which is NOT about innovation, but about protecting pay TV as it is today, but there is a big danger that this move itself will damage the major cablecos and satcos in the long run.
It only requires that one of the TV Everywhere class of deals, gets terms from content companies to use the service to go after consumers who DO NOT get existing Pay TV service, and then the whole house of cards will potentially comes down.
It is inevitable, for instance, that AT&T will offer one of its U-Verse bundles to existing Comcast customers, in order to entice them across to U-Verse and vice versa. At some point one of these operators might ask for (and receive) permission to offer the same content in a pay TV bundle which ONLY goes across the internet.
So what happens if AT&T can suddenly offer (at some point in the future) its own U-Verse content (or a subset) to Comcast customers on Comcast broadband lines? If you think about it, this could be facilitated by a pay TV style payment with a greater portion of the revenue going to the content partners (because there is no network to pay for). And since Hulu, Netflix and YouTube can be freely offered to anyone, as they, and services like them get more content, they will become threats to TV Everywhere services, and this will mean that to compete on a common footing they will need to reach out to similar footprints.
This might be thought of as the internet equivalent of a film going straight to DVD, but what’s wrong with cheap pay TV over the internet so long as net neutrality becomes firmly ensconced in the US. If Comcast cannot stop Hulu content traveling over its broadband lines, then it won’t be able to block AT&T content either.
This may not happen in the US, but it will happen somewhere, and while the US is the only place where net neutrality is enforced in any way right now (just by FCC mandate so far), the concept will find its way into legal frameworks over the coming years outside the US. This situation will happen somewhere, and the result will spread.
In the end pay TV will be a service not an operator network, and it will almost certainly run across a patchwork of underlying technologies.
How patient would Comcast investors be then with it pouring $billions into infrastructure, when it could make perhaps more money by not owning the infrastructure at all, but offering more and more services across multiple networks. This is the state that Teclos find themselves in, why not cablecos.
Since this would turn triple play economics on their head, you can be sure that Comcast and others will be working as hard as they can to ensure it never comes about (even if it did make them more profitable). One thing they will be doing is trying to establish territorial exclusivity on more and more content so that no-one else can offer that same content on the internet. But would this actually help their cause?
Eventually that exclusive content would need to be spread over as big a footprint as is possible, for the best pay-back, so exclusivity will only exacerbate the problem and force network independent economics upon the US pay TV providers.
It would also result in a commoditization of the IP based broadband set top, something that is already a battleground in Europe. There, DVB-T dominance for broadcast TV means that a hybrid design which takes broadcast signals and an internet signal, is the holy grail for next generation access. The free to air broadcasters there have multiple spearheads into this area, with the BBC offering iPlayer on a variety of hardware and pushing for a hybrid set top design called Canvas, while continental broadcasters have opted for something called HbbTV (Hybrid Broadcast Broadband TV).
Somehow I can’t picture the same thing happening in the US, but it should. It would be tremendously beneficial for the US consumer to be able to go to a retailer, buy a set top which takes any broadband through an Ethernet plug, and then buy the pay TV service of his or her choice. It would lead to commoditization of both TV service and set top, increased competition and fairer pricing, which in turn would stimulate innovation.
By US regulatory standards, that wouldn’t do anyone in business any good, so it won’t happen.
Already Comcast offers many of its online video services to non-Comcast customers, with 12,000 hours of online content sitting on Fancast.com for free.
‘This is a beta product only, but the consumer feedback has been great so far. We look forward to more feedback as we make it available to even more customers’ said Amy Banse, President of Comcast Interactive Media. ‘We think Fancast XFINITY TV gets us one step closer to our multiplatform goal and is just the beginning of delivering an entirely new TV viewing experience.’
Comcast is currently using a Comcast email address as the service user name and the email password to gain online access and will allow you to register up to 3 PCs for the service. Right now only customers which take both home broadband and TV have the right for a password, that password will work from any online PC, not only one that is connected to a Comcast broadband line (though it may be blocked if it is outside the US).
Once you log in, you getting a personalized homepage which knows which channels your home service has access to, and mimics that. Comcast made it clear that later in the year a customer of only cable TV, with their broadband from another company, will be able to gain access, and mobile access is down the road a ways.