Comcast-NBC: Online Video Not a Threat to Cable

In a regulatory filing sent to the FCC today, Comcast (c CMCSA) and NBC said they don’t see online video distributors as a competitive threat, discounting the possibility of a an online video distributor emerging and competing with Comcast’s cable operations, as well as any consumer interest in adopting online video services in lieu of paying for a cable subscription.

As laid out in the filing, the companies argued that conditions shouldn’t be imposed on the transaction based on the possibility that online video distributors could one day compete directly with Comcast’s cable business, calling such a possibility “entirely speculative.” That’s because, they say, no online video distributor can offer the breadth of content that a cable company can, nor have any true, online-only multichannel video offerings emerged.

Comcast and NBC also downplayed consumer interest in adopting online services, poo-pooing consumer cord-cutting and calling online video viewing complementary to its core cable business. “Currently, online video does not compete with Comcast’s MVPD business. The video content that online distributors now provide is far more limited than the video content that Comcast Cable and other MVPDs provide to their subscribers. As a result, few consumers consider online video as a close substitute for MVPD service, and would therefore consider ‘cutting the cord,'” they wrote in the filing.

All that said, the companies downplayed their ability to uniquely compete against an online-only video service if one were to emerge, claiming extreme fragmentation in the online video market, and saying that their combined Internet properties were too small to be much of a force in an online video. Noting that NBC online properties accounted for 1.8 percent of all professionally produced online video view, with Comcast properties making up less than 1 percent. Even if the companies included all views from Hulu, in which NBC has a minority stake, Comcast and NBC said they would only account for 5 percent of all online video views — not enough to pose a competitive threat.

Consumer watchdog group Public Knowledge said Comcast and NBC were understating the threat the combined entity posed to competition in online video. “We are incredulous [Ed. note: good word] that Comcast and NBCU would downplay Internet distribution of video at a time when the FCC has repeatedly identified online video as one of the primary drivers to broadband adoption,” Harold Feld, legal director of Public Knowledge, said in a statement.

loading

Comments have been disabled for this post