Comcast (NASDAQ:CMCSA) and Microsoft (NASDAQ:MSFT) are going to make watching cable in your living room look a whole lot like an episode of The Jetsons.
The future will be realized when Microsoft’s soon-to-be-acquired Skype, the Internet video and voice calling service, comes to Comcast’s cable service, according to a Business Insider report. Comcast customers will have to purchase a digital camera, adapter, and a new remote control in addition to the usual cable box, but they will then be able to set up easy video calls from their couch, talking to anyone with a Skype-enabled device, whether it’s a PC or smartphone.
The partnership is significant to investors in three specific ways: The first is that video calling continues to grow. Devices like Apple’s (NASDAQ:AAPL) iPhone and its much-advertised FaceTime calling service has finally separated video calling from PCs and boardrooms. Video calling is a common, cheap commodity and another feature that technology manufacturers and services will begin including as standard.
Second, Comcast is smart to make the partnership, since keeping its cable service relevant is going to become increasingly difficult over the next few years. On-demand and digital video recording service is old news. Since television viewers are migrating to online services like Netflix’s (NASDAQ:NFLX) streaming video and Hulu (partially owned by Comcast’s NBC Universal), cable providers have to expand their online offerings. Time Warner (NYSE:TWX) has already begun aggressively expandingwith an iPad app for watching certain channels on the go. Internet voice and video chat is a small but significant way for Comcast to diversify. It will, of course, need to do a whole lot more than that on a long enough timeline.
The third factor is Microsoft’s role. Though its acquisition of Skype still isn’t finalized, the Comcast service will likely be made available around the time Microsoft takes control. The Internet TV business is still an evolving beast. Google (NASDAQ:GOOG) made a concerted effort to bring expansive web service and access to the living room with Google TV in 2010, but the technology that housed it was ignored by consumers while content providers like Comcast’s NBC and Disney’s (NYSE:DIS) refused to support the platform.
With Skype, however, Microsoft will have a strong link between itself and Comcast, a partnership that could allow Microsoft to further develop its home entertainment ambitions through Internet TV services.
Could Skype on Comcast lead to Bing TV or Xbox Live on Comcast? It’s certainly a possibility. The partnership is nothing if not proof that the cable business isn’t just about TV shows anymore. Investors following cable-TV stocks should note who is taking the proper steps to expand.
As of this writing, Anthony John Agnello did not own a position in any of the stocks named here. Follow him on Twitter at @ajohnagnello and become a fan of InvestorPlace on Facebook.
