Don’t expect Comcast to let people access Internet video content like Netflix or YouTube on its set-top boxes anytime soon. While it’s true that the cable provider is testing out a new service offering called “Xcalibur” that would add social features and could open the door for Internet video services be deployed through its DVRs, Comcast is taking the same walled-garden approach to the set-top trial that it uses in its pay TV services.
The Wall Street Journal reported Monday that Comcast is testing the service in its Augusta, Ga. market, enabling viewers there to watch a “smattering” of web video services alongside live and pre-recorded TV shows. But while Comcast customers and employees in the test have access to some online video, they are not able to browse the open web, a person familiar with the trials has confirmed. Perhaps more importantly, our source says the cable provider currently has no plans to open up to online video services like Netflix or even its own Fancast video service.
Instead, the real work in the test is being done on improving search and discovery of the programming it delivers. While an improved navigation system would be a welcome change from the “grid” programming guide that has plagued cable subscribers for decades, it does little to alleviate the pressure Comcast and other providers are feeling from broadband video services.
Due to the growth and accessibility of video services which are available through connected devices, an increasing number of people are getting their programming from alternate sources. A range of new consumer electronics devices are being introduced that give users the ability to access to online video services, in many cases for much less than what they pay their local cable provider. That includes set-top boxes and gaming consoles, which for the most part have been additive and resided on Input 2 (i.e. they have been the second choice for consumers when turning on the TV). But soon, most TVs will be connected to the Internet, which means that the TV manufacturer could potentially own the customer relationship.
Unfortunately, Comcast’s approach to dealing with web video, even in the case of the Xcalibur trial, shows how short-sighted business decisions can get in the way of technological innovation. Comcast has the ability to provide new services to its customers — services those customers can already get elsewhere — but rather than do so, it’s sticking with the same old business model. While it’s understandable that Comcast doesn’t want to cannibalize its pay TV programming in the short term, in the long term it needs to ensure that it continues to own the customer relationship. Sometimes you have to cannibalize yourself before someone else does.
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