NEW YORK (Reuters) - Comcast Corp has rolled out an on-demand, Web-based service for subscribers to both its video programing and Internet access in a bid to keep customers from dropping their cable subscriptions in search of free shows online.
The new service is called Fancast XFINITY TV, and is the largest implementation of a cable industry initiative called TV Everywhere to make popular shows available over the Web to paying subscribers. Cable TV programmers like Time Warner Inc and Viacom Inc are working with pay-TV providers like Comcast, Time Warner Cable Inc and satellite TV operators.
TV Everywhere is a drive to pre-empt the cable TV business model being undermined by the availability of free programing on the Web on services like Hulu, which is jointly owned by News Corp, NBC Universal and Walt Disney Co.
Comcast, the top U.S. cable company, said earlier this month that it has reached an agreement with General Electric Co to take a controlling stake in NBC Universal, leading to speculation that Hulu will soon start charging users for access to programs.
Comcast said on Tuesday that Xfinity will be available at home but also “on-the-go” when the user signs in via laptop though there are plans to eventually extend it to other mobile devices next year.
Though authenticated users can access the service anywhere in the U.S. once they’ve logged on, they will not be able to see the programing if they take their laptops overseas, due to licensing right limitations.
Xfinity is currently only available to the millions of customers who subscribe to both Comcast’s digital cable and Internet services. Comcast Interactive President Amy Banse said it aims for all of Comcast’s video customers, including those who are not Comcast Internet subscribers, to be able to use the service in about six months once all security and authentication issues have been resolved.
Xfinity has launched with an extra 2,000 hours of content from more than 30 cable network partners like Time Warner’s HBO and Cinemax, Liberty Media’s Starz, and BBC America. In a demo, executives showed that the new site features complete seasons of popular shows like “The Sopranos” and “Big Love.”
Cable networks are currently favored in the media sector because of their dual revenue stream of affiliate fees and advertising.
But Comcast executives said on a conference call that some of its program partners are still experimenting with the amount of advertising they will run alongside their shows on the Xfinity service.
Comcast Senior Vice President of New Media Matt Strauss
said some programmers are experimenting with a full ad load, comparable to television, and working with TV ratings service Nielsen to determine if the viewing numbers could be measured and counted toward a program’s ratings.
“There’s some experimentation with that right now and trying to understand what the customer response will be to a full ad load,” said Strauss.
It is widely believed in the TV industry that Web users will be less receptive to the quantity of advertising that is typical on television.
Strauss said Turner Networks TBS and TNT are some of those experimenting with full ad loads.
Reporting by Yinka Adegoke; editing by Gunna Dickson, Dave Zimmerman