Cable TV king Comcast (NASDAQ:CMCSA) has had a clear message regarding the company’s content: If you’re going to watch online or on a television, you’re going to do it on Comcast’s terms.
But the company has an uphill battle to fight — the number of options for viewing television via the Web is growing daily. However, Comcast CEO Brian Roberts told the Wall Street Journal on Monday that Comcast isn’t worried about Web-based video. Roberts said his broadband Internet service business is actually bolstered by the popularity of Web-based options, and is only bringing about audience loss “at some small level.”
However, Roberts should be worried. By the end of 2011, new Web television services and updates coming to existing services should continue to woo customers away from traditional outlets. Here are the companies that could take some revenue from Comcast:
Google (NASDAQ:GOOG)
Google TV had a rough start in October. The software itself didn’t work particularly well. Consumers meanwhile ignored early devices like the Logitech (NASDAQ:LOGI) Revue and Sony (NYSE:SNE) Internet Television. News Corp. (NYSE:NWS), Disney (NYSE:DIS), and the other major network parent companies also blocked the software from accessing official Fox and ABC websites, limiting the Web TV software’s appeal. With new hardware partners like Samsung and new content options like access to Amazon.com’s (NASDAQ:AMZN) Amazon Prime streaming video, Google TV will have a second chance to make its mark in 2011. It won’t need Comcast’s support for NBC access to succeed if it can offer users a variety of Web viewing alternatives.
Yahoo (NASDAQ:YHOO)
Despite the company’s myriad woes — plummeting Web advertising revenue, a devalued brand — Yahoo’s Connected TV software pulled off a coup in January when it was announced that Disney would partner with the service. Disney is working with Yahoo on exclusive “widgets” for Yahoo Connected TV sets, with channels like ABC, ESPN, and the Disney Channel getting unique Web TV stations. The software comes in models from most major television makers in the U.S. like Samsung, Vizio, and Sony, giving it excellent penetration. If Yahoo can strike similar deals with News Corp. or CBS, Comcast may be forced to bring similar NBC content to the platform to stay competitive.
Microsoft (NASDAQ:MSFT)
Reuters reported in November that Microsoft was meeting with ABC, Fox, Time Warner (NYSE:TWX), — and even NBC — looking to foster support for a new subscription-based Web television service accessible through the Xbox 360 video game console. The service was described as a “virtual cable operator,” turning the company’s already media savvy gaming machine into a replacement for traditional cable services like Comcast. Microsoft has flirted with television on the Xbox already. It sells and rents videos through the Zune store, features an exclusive version of Disney’s ESPN 3, and was responsible for helping popularize Netflix’s streaming service in 2008. Though it wouldn’t replace cable overnight, the install base of 50 million worldwide Xbox 360 owners could make Microsoft’s Web television alternative a threat with enough content support.
Apple (NASDAQ:AAPL)
The Apple TV’s September refresh didn’t improve the set-top box or Web television service’s popularity. Nor did News Corp., Disney, and GE’s (NYSE:GE) reluctance to offer their TV content for Apple’s 99-cent episode rental program in late 2010. What could turn around Apple’s television ambitions, however, is the rumored Apple TV high-definition television sets rumored to be coming soon. On Feb. 3, Piper Jaffray analyst Gene Munster said that he believed Apple’s $3.9 billion investment in LCD screen component suppliers signaled a move into actual televisions. “[The] company will enter the TV market with a full focus, as an all-in-one Apple television could move the needle when connected TVs proliferate.” Given Apple’s broader popularity, it’s hard to argue Munster’s point.
At the time of publication, Anthony John Agnello did not own a position in any of the stocks named here.
