If Comcast’s $45 billion purchase of Time Warner is approved by shareholders and regulators in D.C., the new company will be the biggest cable provider in the country with 30 million customers. According to Comcast, that huge footprint will “result in the accelerated deployment of advanced technology and the development of new and innovative products and services for millions of customers.”
What that really means is that TV everywhere could be one step closer to becoming a reality. By 2014, we were supposed to be able to access any content we wanted from any device and in any location. But for the most part, we’re still chained to our TVs. While companies like HBO and Disney offer authenticated viewing over tablets and phones and Netflix and Hulu are coming on strong, most of us still have to be in front of the television to watch the shows we want to watch.
For millions of customers, that could soon change.
“Comcast has been the most forward looking on using new technologies like VOD, addressable advertising, TV Everywhere, and in-season stacking rights to improve the connection between content and customers,” says media analyst Michael Nathanson of MoffettNathanson Research.
The company’s Xfinity TV Go app lets viewers watch 35 live channels on their tablets or phones and gives them access to 25,000 on demand shows and movies. Comcast’s newest innovation, dubbed X1, lets subscribers watch DVR’d shows on mobile devices and even allows users to download recorded shows to take on the go. X1 is currently being tested in Boston.
As those services roll out to more customers, viewers and programmers and advertisers will start to adapt to the changing TV landscape. That could have huge implications for how shows are released. We might see more full seasons hitting screens at once a la Netflix. Advertisers will be able to insert more timely and directed ads and viewers will finally be able watch what they want when they want to watch it.
“TV everywhere as a headline is one thing,” says Michael Kassan, CEO of MediaLink. “TV everywhere as a reality is exciting and seductive and game changing.”
But there’s a good chance all of that viewing is going to cost you. As cable companies increasingly move to a cloud-based Internet model, consumers are going to use more and more bandwidth. Right now many cable companies offer unlimited bandwidth to consumers.
But Comcast has quietly been testing data caps. That means users get a certain amount of data at a flat rate and are then charged for any usage over that limit. Customers in places like Atlanta, Memphis and Huntsville, Ala. get 300 GB per month. Any usage over that is charged at a rate of $10 for every 50 GB.
That might seem like more data than anyone would ever need. But as more services move to the Internet pipe, usage is going to skyrocket.
GigaOm has suggested that today’s merger is really all about broadband. The website has an excellent analysis of how much the cable companies get for broadband customers vs. video customers.
Netflix, Hulu and YouTube are programming our video watching behavior — any amount of video, anytime, anywhere on any screen, as long as there is broadband. The more we watch internet video, more bandwidth we need. The fact, that cable companies (big and small) have already started to meter broadband and are putting limits on the networks; we are only on the cusp of seeing a big inflation in internet access costs.
In regulatory hearings, Comcast will argue that because the two companies don’t compete now in any markets, a merger won’t make the video world any less competitive. Cable companies compete against satellite providers like Dish and DirecTV and FIOS companies like AT&T and Verizon. Those companies have much more national footprints that could keep Comcast prices in check, according to Ian Olgeirson, senior analyst at SNL Kagan.
Higher Internet costs may be inevitable whether you get your broadband through AT&T or Comcast. But expect plenty of people to voice concerns about the size and power of Comcast should the merger go through.
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