Comcast Takes Online TV Service National

Some Networks Try TV-Sized Ad Loads; No Role for Hulu Seen

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NEW YORK (AdAge.com) -- Comcast, the nation's leading cable operator, is also taking the lead in putting cable TV online.

Starting today, the company said it is extending its online TV service, in beta for the past six months, to many of its 15.7 million broadband subscribers across the country, the broadest implementation yet of what the cable industry calls "TV Everywhere."

Comcast, which calls its service Fancast Xfinity TV, is also adding 30 new cable networks to the mix including premium channels such as Time Warner's HBO, Cinemax, Liberty Media's Starz, as well as ad-supported cable networks such as AMC, TNT and TBS.

The strategy behind TV Everywhere is to preserve the very-profitable cable TV business model by giving consumers access to shows online that they are already paying for as part of their cable package -- but in a controlled way. This way, the thinking goes, consumers will be less tempted to cut their cable subscriptions and just watch whatever TV is available online using a broadband connection.

Comcast started testing its online service last summer with 5,000 carefully selected subscribers. During the fall, it slowly added to that number. Now, the service will be available to all subscribers who pay for both Comcast's TV and broadband internet services. Comcast won't disclose how many of its subscribers take both services, but it is something less than Comcast's 15.7 million broadband subscribers.

In the next six months, Comcast will extend the service to all of its 24 million video customers regardless of how they get broadband. Initially, though, Comcast is using users' Comcast.net email and password to determine who is entitled to what programming. "It knows what content I subscribe to and lets me into that content on the web," said Amy Banse, president of Comcast Interactive Media.

Right now, the service is limited to laptops and desktop computers, but Ms. Banse said in the coming year Comcast will add net-connected mobile devices and phones. The service is also restricted to Comcast's TV site Fancast, but soon it will be available on programmer websites as well.

Comcast executives did not commit to including third-party sites such as Hulu or CBS's TV.com with the service. Fancast was one of the earliest syndicators of Hulu content -- largely free-to-air broadcast TV. But Comcast is also set to own 27% of the fast-growing site as part of its acquisition of NBC Universal. But Ms. Banse said she sees Fancast and Hulu as fundamentally different offerings.

"Hulu is a great site with a lot of broadcast content; we see Fancast and Xfinity as having a lot of cable," Ms. Banse said.

Unlike Hulu, Comcast execs said the TV networks themselves would have control over the number and frequency of ads within the shows, and some, such as Turner Networks' TNT and TBS, are putting in TV-sized ad loads right from the start.

Hulu keeps tight control over the user-experience and restricts ads to about four per hour, rather than the dozens of spots in an hour-long TV show. Unlike TV, those ads cannot be skipped.

Comcast execs made it clear, however, that the service is nascent and that networks would spend the next few months experimenting with different strategies. "We don't know what the appropriate level of ads is," Ms. Banse said. "We felt at this point it's more important to put as much content out as possible and let customers decide."

The company is working with Nielsen to provide commercial ratings to broadcasters that they can add into their TV numbers.

Among Fancast Xfinity's new catalog are all 86 episodes of "The Sopranos," 900 movies included in the premium channels on the service, and cable shows such as TNT's "The Closer" and Discovery's "Man vs. Wild."

Notably missing is CBS's premium channel Showtime. Fancast has a separate deal for CBS programming and Ms. Banse said she's confident that they will reach a deal for Showtime as well.

In some cases, Comcast will have more programming available from a given network online than on cable video on demand.

"Because it is a web experience we are hopeful to get even more hours online than we do on the television set," Ms. Banse said. That, however, will no doubt result in networks demanding higher distribution fees. Much about the online TV model is unsettled, as Ms. Banse conceded: "At the moment, this is uncharted territory."

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