Comcast to Boost VOD Business - Analyst Blog
March 05 2013 - 6:10AM
Zacks
In order to drive its Video on
Demand (VOD) business, Comcast Corporation (CMCSA)
– the largest cable MSO in the U.S. – is planning to roll out a
promotional offer called Watchathon, which will offer free access
of movies and TV shows to its subscribers for a week.
Both set-top box users and TV
Everywhere platform users, which include PCs, tablets and
smartphones, can easily watch their favorite movies and TV shows on
demand.
Higher demand for VOD service will
help Comcast to bolster its top-line growth. Moreover, it will also
help the company to include another revenue platform with the
addition of dynamic ad insertion technology at the time of watching
TV shows. Furthermore, the new promotional offer may lure more
customers to watch popular channels like HBO, Showtime and
Starz.
Another step taken by Comcast to
strengthen its VOD business is the introduction of popular Queue
platform on its set top boxes, which was previously used through
Xfinity TV apps on PCs, tablets and smartphones. Implementation of
Queue application will make VOD service more interactive for its
subscribers, hence giving it a lead over its peers.
In a recent survey, conducted by
NPD Group Inc., Comcast holds nearly 28% of the total $1.3 billion
VOD market in the U.S. in 2012. Moreover, the cable operators
dominate the VOD business with 56% market share. However, it fails
to compete against Verizon Communication Inc.’s
(VZ) FiOS TV and AT&T, Inc.’s (T) U-Verse TV
on the basis of movie-rental revenue per subscriber. Both generated
$25.29 and $13.83 revenue per subscriber as compared to $10.33 for
Comcast in 2012.
On the other hand, satellite TV
operator DirecTV Group Inc. (DTV) and Dish Network
Corp. together account for an average of just $10.33 with a
combined market share of 27%.
So we believe that the
implementation of these two strategies will help Comcast to retain
its market share but at the same time will also help the company to
realize better revenue growth from its VOD business.
Currently, Comcast Corporation
carries a Zacks Rank #2 (Buy).
COMCAST CORP A (CMCSA): Free Stock Analysis Report
DIRECTV (DTV): Free Stock Analysis Report
AT&T INC (T): Free Stock Analysis Report
VERIZON COMM (VZ): Free Stock Analysis Report
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