Comcast COO talks internet streaming, à la carte pricing
by Darren Murph 
posted Mar 16th 2009 at 5:27AM
Looking for an inside view of the cable company realm? How's about a mouthful from Comcast COO Steve Burke? Said executive recently sat down for an interview with TechFlash, and we have to say, it's one of the most interesting reads we've seen in awhile. When addressing questions on internet streaming, he noted that watching video online is really just a complement to pay-TV (and not a substitute), and he also asserted that internet TV was a friend of Comcast given that over 16 million people rely on its high-speed connections to view it every single day. Still, we found this quote incredibly telling: "We and the programmers are going to want to make sure that the cable programming that people pay for when they get basic TV service doesn't go completely on the Internet, so there is still a reason to subscribe to cable."
We'd elaborate, but really, it speaks for itself. On the topic of à la carte pricing, he simply stated that content producers wouldn't let it happen. While networks like ESPN would draw millions, lesser known channels would likely be forced to shut down if people could specifically avoid paying for them. There's far too much in the interview to cover in this space, but be sure to give it a look and report back with comments. We know you'll have a few.
Reader Comments (Page 1 of 1)
m3nphls @ Mar 16th 2009 7:29AM
lol, as long as they have that 250GB cap nahz thanks. I'd stay with FiOS
Pusta @ Mar 16th 2009 7:53AM
Funny, internet TV (be it Hulu, my Roku box, and AppleTV) has allowed to drop down to the most basic cable package Comcast offers. So I guess it can replace Cable TV.
Billy @ Mar 16th 2009 9:08AM
he should be talking more HD channels! I know soo many people jumping off the bandwagon because of that
Eddie @ Mar 16th 2009 9:15AM
You mean channels that nobody watches would have to shut down? Oh the humanity!
Edmund Singleton @ Mar 21st 2009 11:20AM
Well said...
minimalist @ Mar 16th 2009 9:36AM
"We and the programmers are going to want to make sure that the cable programming that people pay for when they get basic TV service doesn't go completely on the Internet, so there is still a reason to subscribe to cable."
And without the opportunity for real competition the cable companies can totally get away with this kind of manipulation. This is exactly why big cable needs to be blown open by the FCC. As long as singular cable companies control the lines that are laid on public land and are handed monopolies by municipalities we will not have true free market competition.
"On the topic of à la carte pricing, he simply stated that content producers wouldn't let it happen. While networks like ESPN would draw millions, lesser known channels would likely be forced to shut down if people could specifically avoid paying for them."
So we are supposed to believe that the Cable companies have some sense of obligation to little channels so therefore we must agree to a subsidized system for the greater good? I don't believe for a second that they care one bit about the little guy. They just like their bloated, overpriced tiered pricing structure.
Aaron Smith @ Mar 16th 2009 10:08AM
Minimalist for FCC chief, you have my vote.
Eric @ Mar 16th 2009 10:47AM
So, he's for television socialism eh? Who'd a thunk?
I say let the shopping channels die, or make the money off the backs of the people it rips off with the crap they sell. Like gambling, shopping on TV, and infomercials, are a tax on the ignorant.
Pip @ Mar 16th 2009 11:33AM
"While networks like ESPN would draw millions, lesser known channels would likely be forced to shut down if people could specifically avoid paying for them."
Wouldn't this be the other way around? I thought ESPN was locked into contracts with every cable company as it is. If they were left to a la carte they simply wouldn't be making nearly as much money because most people don't even watch sports. I have about 30 sports channels and I can't think of the last time I watched any sports games, yet I'm sure if I were to break down how much of my money has gone to ESPN and other sports channel owners, it would be pretty significant.
Why not just offer both options? Have a full a la carte, and a competitive packaged option? As much as I would love to only have to pay for 5 or 6 channels tops, I think I would go for more if there were some actual pricing competition. "Buy the Travel & History package and get 5 channels free" or "Buy 10 channels, get 5 free" etc..
Paying $160 / mo for 6 channels that I watch stinks. They all exist in separate tiers.
ryanrvogel @ Mar 16th 2009 1:39PM
@Pip - Just because you (and possibly most Engadget readers) don't ever watch sports doesn't mean nobody does. I think that if cable went a la carte, we might see some of the more obscure sports channels go, ESPN and ESPN2 would be two of the most popular basic cable channels. Honestly there are far more worthless non-sports channels (Fox Reality, Style, the overly diversified Discover Networks channels, etc, etc).
Unfortunately there are some networks that I enjoy that would probably go away (G4 the most notable) if a la carte cable were offered.
The way this needs to pan out is to offer a la carte cable. "Survival of the fittest" will dictate which channels stay on the cable system, and the rest will either die as they should or find viewership via online, independent streaming.
Tom @ Mar 16th 2009 9:20PM
I suspect that all things being equal, the cable companies pay significantly more for espn/espn2 then they pay for discovery. In fact, I've heard numbers that affirm that a la cart pricing would hurt espn more then say lifetime based on the fact that espn's contract costs so much.
FUBAR @ Mar 16th 2009 8:19PM
"On the topic of à la carte pricing, he simply stated that content producers wouldn't let it happen. While networks like ESPN would draw millions, lesser known channels would likely be forced to shut down if people could specifically avoid paying for them."
Ahh, so thats the reason why we have 999 channels and nothing is on: No reason for the crappy channels to change.
the highest of Defs @ Mar 16th 2009 1:19PM
Internet streaming is fine if you want lo-res stut-stuttering c-c-crap.
I thought this was Endgaget *HD* though.
As for competition, where do you live? Because here there is at least 2 satellite services and AT&T Uverse to compete with cable. Many other parts of the country also have Verizon FIOS. There's plenty of competition we don't need to call in the Feds thank you anyway. When has the governement EVER made anything better anyway?
bob @ Mar 17th 2009 3:32PM
This is probably a rare situation where competition has made it worse for the consumer. The rare commodity in this scenario is the content provider, not the pipe. Dish can not compete with Comcast if Comcast has ESPN and Dish does not. Dish can not simply offer a different sports option because ESPN has exclusive rights to many broadcasts. That gives the content providers leverage against all the cable/satelite companies. They all need to have the big name channels to complete against each other. They have no leverage in order to compete for customers.
Galley @ Mar 16th 2009 1:20PM
Honestly, some of the more specialized channels may have better success as ad-supported podcasts.
the highest of Defs @ Mar 16th 2009 1:36PM
This is the most telling part of the interview for me:
What about increasing the number of HDTV channels in Seattle?
"We actually have a lot of high-def channels in Seattle.... But we want to get to 100 high-def channels (in some parts of the market this year).... Right now, about two thirds of our capacity is currently devoted to analog TV channels. We are going to convert those analog channels to digital and when you convert to digital you get a lot more capacity. You can put 15 digital channels in one analog spot."
Yeah you CAN... IF you simply don't care about PICTURE QUALITY! That right there is why I switched to DirectTV last year. You can only fit TWO HD channels into a single analog channel without resorting to extra compression. Comcast would rather stuff 15 (!!!) channels into there, using their horrible outdated MPEG2 technology (can somone tell them it isn't 1997 any more please).
Meanwhile D* and others are launching new birds and shifting to new superior MPEG4 compression technologies.
dejal @ Mar 16th 2009 9:15PM
"We are going to convert those analog channels to digital and when you convert to digital you get a lot more capacity. You can put 15 digital channels in one analog spot."
And the people who watch analog will lose the channels (without a decrease in the analog package price) or will have to upgrade to digital (at "only" a small monthly increase in price for the service and rental box).
Which is why I'm going to a dish within the next couple of months. I've lost 8 channels in the last year (2 of which I really miss were pulled in January). If I'm forced to go digital, I'm not going to use the company that screwed me over. I will keep Comcast internet for the time being though.
ftaok @ Mar 17th 2009 12:22PM
dejal,
Going all digital doesn't necessarily mean the loss of cable channels without a leased STB. In my neighborhood (Comcast SE Pennsylvania), all of the "extended" basic channels have been moved to clearQAM. Of course, you'd need a new TV to access these channels, but they're there.
The catch is that they (meaning Comcast) don't advertise that clearQAM cable channels are available and the channel numbers are very difficult to get used to. So unless your TV has some sort of EPG that allows you to map the clearQAM channels, it's difficult to channel surf.
Also, there's no telling if/when Comcast will encrypt these channels again.
ft
minimalist @ Mar 16th 2009 1:45PM
"As for competition, where do you live? Because here there is at least 2 satellite services and AT&T Uverse to compete with cable. Many other parts of the country also have Verizon FIOS. There's plenty of competition we don't need to call in the Feds thank you anyway. When has the governement EVER made anything better anyway?"
Satellite TV cant delver two way, interactive content so that is not competition for cable internet in the slightest. And FIOS and U-verse are nice if you can get them, but they are not coming to exurbia or smaller cities that make up a huge portion of the cable watching market anytime soon. Its simple math. Dense urban populations means more money for all the fiber you lay. Less dense means you aren't going to bother. And DSL? well lets just say its got problems. I live in the capitol city of my state in an area classified as "downtown". Yet I can't get DSL or U-verse. Go figure.
The Cable companies run their lines on the public right of way so the government will be involved whether we like it or not because they use public land to deliver their service. And the FCC forced all the the Bells to open up their lines to competitors as well so its not like there is no precedent. The government (municipalities) already gives cable companies monopolies via exclusive contracts which is about as anti-free market as you can get.
Since when has less competition via monopolies instituted by exclusive government contracts made anything better? There is nothing even vaguely libertarian about restricting competition via dealmaking.
Chad @ Mar 16th 2009 3:31PM
Actually I heard ESPN is one of the biggest issues with à la carte pricing. The way I heard it ESPN (owned by Disney) requires cable providers to purchase all ESPN channels or none. So a cable operator cannot just purchase ESPN by itself it must purchase the whole slew of esoteric ESPN channels which obviously will only appeal to a small subset of viewers. The FCC has been trying to get new rules against forced bundling. A good read on the subject if your interested:
http://www.multichannel.com/article/160265-ESPN_vs_Cablevision_s_Dolan_At_The_FCC.php
Edmund Singleton @ Mar 21st 2009 5:48AM
Niche programing can and should be found on the internet, as for us paying customers, give us what we want and nothing else..
Sputnik56 @ Mar 25th 2009 12:42AM
Exciting..... I think Comcast (and its subscribers) would be better served by improving it most basic delivery services and obligations. Off the top: Please, please, please update/redesign the GUI; The menus and graphical elements resemble a chunky, poorly rendered Windows '95 page. Few user options are available and the simplest remote functions such as "Prev. Channel", "Favorites" and basic navigation are unreliable and buggy-The design of their own remote (which you can replace of course) is decidedly uninspired; I find it cheap and mushy.
I have, on two occasions, scheduled a hardware upgrade (DVR) to learn that the appropriate unit is unavailable-Another appointment, another half-day waiting around for the serviceman. I'm gettin' TIVO instead.
My service package includes Digital Telephone service (my grandmother doesn't believe cell phones are "real"-a wire makes a telephone "real" so...) which service required 2 visits after installation-not even new service; This condo and all its tenants have had Comcast for 15 years.
Contacting Comcast by phone locally is excruciating; Their pricing and packages which seem to change weekly, incomprehensible. Depending on the Service Rep. you speak with, your actual price structure may vary...
Most irritating is the broadcast television presence of Comcast-I've worked in advertising for 25 years (as a graphic designer) and nothing is more disgraceful to me than their brand of relentless promotion driven by huge ad dollars for a nearly empty box. I haven't even touched on content which seems like "same and same and more of the same..." Movies-On-Demand (which seem to crash every time), the "Listings" page which is paralyzed for hours at night while new data is incorporated, etc. The program synopses are awful...
Service problems, equipment problems, billing issues(!) ... Comcast thrives in spite of itself-If my condo allowed it, I'd have a dish. I must add that my service in California was only marginally better than here in Florida. California Comcast is still billing me for the "unreturned" converter box I put in their serviceman's hands the day I moved. In 2006.
New technologies, new functions, all fantastic stuff-I lack faith in Comcast's ability to deliver. And I'm tired of being their "captive" viewer...