As television over the internet proliferates, channel operators must tread carefully in deciding how much content to make available for free. Wall Street analysts following the cable sector are looking for signs of so-called “cord cutters,” or folks who axe their cable service and connect their computers to the TV screen and watch for free.
Speaking on Comcast’s fourth quarter earnings today, chief operating officer, Steve Burke, was asked about how the company would boost the content on its free VOD platform so that customers weren’t trained to go off to high-end video sites such as the highly successful Hulu to see their favorite shows.
His response seems to suggest that cable operators have a little more bargaining power with their content providers than one might think. “I think programmers are very sensitive to the fact that the affiliate fees that the cable and satellite industry pays are really the most attractive part of their business, particularly when the advertising environment is as weak as it is and most of them are not making very much money, if any on the internet.”
Burke said the company is providing 300 million streams per month. “We have NBC shows, ABC shows, CBS shows…and we keep adding more and more and we have a lot of ideas in the future about how to get more.”
Separately the company’s results show some interesting trends with regard to advertising revenue in 2008, which was supposed to be a big political year. While revenue from the cable segment increased to $32.4 billion growth in data and voice services was offset by lower ad revenue. Advertising revenue decreased in the final three quarters of 2008. In 2008 ad revenue totaled $1.5 billion, slightly down on the previous year when it was $1.578 billion. Meanwhile Comcast’s programming unit which consists of E! Entertainment, Style Network, Golf Channel, Versus and G4, saw ad revenue increase along side distribution revenue. Though no figure was given.