Comcast latest to jump into streaming fray
Comcast (Nasdsaq: CMCSA) Tuesday said it plans to launch a new streaming service, Xfinity Streampix, that the cable provider said would be offered to its subscribers starting Thursday.
The service will include older episodes of The Office and 30 Rock, and movies including The Big Lebowski and When Harry Met Sally. Comcast said The company is promising additional programming, and said it had deals in place with Disney, NBCUniversal, Sony Pictures, Warner Bros. and Cookie Jar, a provider of children's programming. Comcast owns NBCUniversal.
The stock market reacted to the announcement by pushing shares of Netflix (Nasdaq: NFLX) down some 4 percent Tuesday, on the perception that Comcast would be directly challenging the streaming company with the offering. But Comcast said it has no intention of going toe-to-toe with Netflix.
"Streampix is another step moving TV Everywhere forward by giving customers access to an even greater library of popular choices to watch," said Marcien Jenckes, general manager of video services at Comcast, adding "It is not at all our intention to compete with Netflix."
Porter Bibb, managing partner at Mediatech Capital Partners, told Bloomberg he didn't see the play as a major threat to Netflix.
"I didn't go south the way the market did with Netflix," he said. "It's all about content. Comcast--while it has access to tremendous, fantastic, content--it's going to show a lot of old television shows and a few old movies, which is pretty much what Netflix is showing."
The difference, he said, is that Netflix has a national footprint that allows anyone with an Internet connection to subscribe. And, he said, pointing to a just-announced deal with the Weinstein Co., Netflix is adding fresher content and developing more original content for the service.
Bibb said it was a "a sign of how little confidence they have in it as a money maker" that Comcast was planning to offer the service to triple play subscribers for free and to other subscribers for $5.
The biggest beneficiaries of the new service, he said, were content owner who were looking to what amounted to "found money" in the lavish deals being offered for old content by service providers and streaming services.
Bibb said he still considers Netflix a takeover target, possibly by Yahoo (Nasdaq: YHOO), which could earn up to $18 billion later this year if it sells Alibaba and Yahoo Japan, or by AT&T, which may have to add a service to compete with Verizon, which just launched a joint venture to stream and distribute DVDs with Cointar's Redbox.
- see this report
Comcast's ‘Netflix challenge' a bonus for content owners, not users