Summary
1. The fact that Comcast and Time Warner Cable are stepping up to the plate first with online television does not mean “that cable has the lead.” 2. While telcos are actually increasing video subscribers, the MSOs are in a defensive posture as it relates to the growing threat from over-the-top services such as TV.com 3. There is also nothing stopping the RBOCs from coming out with a similar type of offering.
Analysis
In the Wall Street Journal, the CEO of Comcast is quoted as follows, “Online video is our friend, not our enemy.” While this statement is a nice try, it rings totally hollow. The Journal also points out “some critics say it might be too late to put the online-video genie back in the subscription bottle.” These detractors are probably correct to some extent.
One long-term advantage that Verizon will have over the cable TV companies is the much greater potential to stream video at higher resolution on fiber. This competitive edge is likely to keep many subs paying for their FiOS subscription.
In offering their own video content online, the MSOs are essentially admitting that they do not have a really good response to the threat. And ironically, their actions are going to have the undesirable effect of people being more inclined to use a service like Hulu. They will be encouraging millions of people to start watching video on computers.
