Comcast Prepping Video + Music Download Store?

[Jeremy Charette]

<div class='os_post_top_link'><a href='http://gizmodo.com/gadgets/home-entertainment/comcast-prepping-video--music-download-store-202078.php' target='_blank'>http://gizmodo.com/gadgets/home-entertainment/comcast-prepping-video--music-download-store-202078.php</a><br /><br /></div><i>"If it's not Zune leaks it's Comcast leaks, and this time we're hearing that Comcast is prepping its own music and movie download service. You can select TV shows, music or movies for purchase and download. Once you pay, you watch all content on your Comcast set top box. Plus, you can even go to the Comcast site and download whatever it is you bought on iPod/PSP/Zune/Whatever format."</i><br /><br /> <img src="http://www.digitalmediathoughts.com/images/comcast.jpg" /> <br /><br />It was only a matter of time before we started hearing rumors of cable networks' response to Apple's assault on their market share. I suspect Time Warner and others will announce similar plans in the near future as well, with the ability to download and pay for music and movies just as you can now use pay-per-view or movies on demand. The appeal here is that they'll likely support many more devices than Apple or Microsoft's service will, giving end users much greater content portability.

[Felix Torres]

I was wondering when we would start seeing this; its been a year since Scientific Atlanta showed their next-gen STB and, while cablecos are slow in deploying new hardware, it *has* been a full year.

This should be interesting if they do an even half-baked effort since even the current gen boxes come with 200 GB drives, USB, and firewire. If they can get a decent software load on the new boxes with the built-in DVD burner they'll give MCE PCs a run for the money and push everything else off to the side. The ability to d/l content across a cableco "walled garden" for burning onto a blank DVD should be a nice complement to the existing on-demand channels; if they link the d/l music store to the standard music channels and allow feeding the d/ls to portable players they can get massive share quickly just by targetting the 90% of households that don't have pods.

I wonder if comcast is looking to replicate Dish's tie-up with Archos?
A comcast-branded portable media player linked to the stb would be an instant player; if nothing else, they can flood their customers with fun ads for it. As anybody with cable can attest, those folks are not shy about bad-mouthing their competitors. :twisted:

[Jeremy Charette]

Here's the advantage the CableCo's have over Apple, Microsoft, or any other CE manufacturer out there: installed customer base. They have 10s, if not 100s of millions of customers already. All they have to do in order to introduce a new product is replace the exisiting hardware customers are already leasing. There's no additional up front cost to the customer, which is what scares most people away in the first place. You don't have to spend $300, $500, or $800 for new hardware. Just ring your CableCo and say "upgrade me".

I keep saying: content is king. Eventually, the content providers will be king in this race, and CE companies will be left in supporting roles. Witness TiVo vs. Scientific Atlanta. One is floundering, struggling to stay afloat and get new products out; the other is swimming in cash. Guess which one has aligned itself with content providers?

Which is precisely why Apple is viewing the iPod and iTV as mere tools, rather than profit centers. The real profit is in content sales, and Jobs knows this.

[Jeremy Charette]

One other thought: the CableCo's will pursue this heavily, because it has the potential to blow their previous revenue figures out of the water. Consider: they have a regular fixed income from every customer. A few folks pay for premium channels or pay-per-view, but for the most part, they can count on X dollars per customer per month.

Now throw premium content downloads in there. Music, movies, games. On top of that already fixed revenue stream, they can tap into the market currently occupied by iTMS, Napster, and the like. They can bully their way in, take a slice of the pie, and make even more money than they already are, keeping investors and Executive Officers happy as pigs in mud.

[Felix Torres]

You don't have to spend $300, $500, or $800 for new hardware. Just ring your CableCo and say "upgrade me".


Or they just simply replace your box for free as a scheduled upgrade.

Cablecos have many ways to manage tech deployment over and above customer choice; not the least of which is an infinite advertising budget.
Apple is used to having a hype edge because they advertise heavily compared to their competitors, who more often than not don't advertise at all.

Cablecos have the ability to hammer a point in forever at zero cost.

Also worth keeping in mind is that 70% of households get cable vs 55% that have home computers so any accessory tech that is PC-dependent, like streaming boxes, is vulnerable to competition from standalone boxes from the cablecos who can reach the extra 40% of the market that is PC-free.

To date, gadget vendors (except Archos and to a lesser extent, MS) have focused on PCs as the content gateway and have neglected stbs. Not wise; stbs appeal to PC-free households as well as PC-equipped customers because of their zero up-front costs and the ability to diffuse the back-end costs over truly massive customer bases, which makes the recurring costs lower than competitors' (Think cableco DVR guide fees of $6 a month vs TiVOs charges of $12 a month.).

And when you consider game consoles as stbs, you see why Apple has pre-announced iTV; they are belatedly realizing that they are vulnerable to the cablecos, to Sony (who have quietly adopted Playsforsure tech in their Mylo), and to MS who can hit this market from both the PC side with MCE as well as from the stb side via XBOX, MSN TV, and the various IP TV deals they have signed up. And without a hype edge they have a rough row to hoe.

Because of the locked-down nature of the cable networks and the pre-existing relationships with content owners, the cablecos are naturaly positioned to deliver content under terms unmatcheable by Apple or anybody else *if* they so choose (back-catalog tv sho
s at a buck a pop anyone?). They just happen to have incredibly conservative management that is a slave to the depreciation schedule for the installed stb hardware.

What all this means is that the window of opportunity afforded to would-be competitors (Apple, Amazon, etc) is quite narrow--a year at most--and only until the current gen stbs are fully amortized. After that, I think we'll start seeing some serious challenges from the cablecos to anybody trying to make money off digital content distribution.

And of course, that's without factoring-in the Telcos and their IPTV schemes...

[Jeremy Charette]

Witness TiVo, which has been trying to get out of the DVR business, and into the software business, by signing deals with CableCos and STB manufacturers to license the TiVo interface. They've seen the writing on the wall for a while now.