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Thursday, September 28, 2006

Cable Versus Idiots: Comcast Battles Google And Apple

xiStocks: (CMCSA)(GOOG)(AAPL)

Comcast is beginning to worry about video on the web. A recent study by Convergence Consulting indicates that the audience for online video is getting larger than the one that cable TV delivers. Although web video sites have not figured out a way to capture "cable like" ad dollars, it may only be a matter of time before ad money starts to migrate to these sites in earnest. Products like video iPods from Apple will also fragment the market and cut viewership of cable and broadcast TV.

The irony of the problem, of course, is that Comcast supplies much of the broadband infrastructure that allows video to be watched over the internet. In the debate over net neutrality on of the arrows in Comcast's quiver is that it supplies the means for video sites to grow and take ad dollars from cable. Perhaps Comcast should get a cut for their help.

There are two solutions to Comcast's problem One is to offer more of its video on demand so that viewers do not have to be in front of the tube at a fixed time. The other is to open their own websites and move programming online. The trouble with this is that Comcast has to get permission from the content creators to put the programming on the internet. Comcast may also have to give them a piece of the action.

Comcast has mainstream programming. Tons of it. Hundreds of channels. Movies. Sports. Weather. Local TV. It does not have the one thing that video sharing sites have. Idiots lip-syncing "I Want It That Way" by The Back Street Boys.

Viral video is largely produced by buffons who have nothing else to do with their time. The programming cost is close to nothing. And hundreds of millions of viewers watch it.

Cable can't compete with boobs.

Douglas A. McIntyre can be reached at He does not own securities in companies that he writes about.

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