Comcast Unit Cuts Web Deals
thePlatform Agrees To Manage Video For Cable Operators
By NICK WINGFIELD and VISHESH KUMAR
July 22, 2008; Page B7
A unit of cable giant Comcast Corp., an emerging player in Internet video, has cut a series of deals to handle online video for three other major cable operators.
The Seattle-based subsidiary of Comcast, thePlatform, has reached deals to deliver video to Web sites aimed at subscribers to the high-speed Internet services of Time Warner Cable Inc., Cablevision Systems Corp. and Cox Communications Inc. Cable operators are increasingly seeking to become destinations for online video, as consumers spend more time watching television shows, movies and other clips that they download from Apple Inc.'s iTunes, Google Inc.'s YouTube and other Internet sources.
Earlier this year, Philadelphia-based Comcast launched Fancast, a site that features video ranging from free, advertising-supported episodes of "CSI" to older movies like "Moonstruck." With thePlatform, a start-up Comcast acquired two years ago for about $100 million, Comcast is also making a play to become a technology-service provider for other companies that want to put video online, signing up clients that include cable operators, Verizon Wireless and Hulu, a popular Web site for TV episodes that is jointly owned by General Electric Co.'s NBC Universal and News Corp., parent company of Wall Street Journal publisher Dow Jones & Co.
ThePlatform provides a service that functions as a management system for converting TV shows into the latest online-video formats, inserting promotions from online-advertising networks and transmitting the content to distribution networks that speed up the delivery of Web video to consumers. The company earns money like a utility, charging clients an undisclosed fee for the amount of video they store online and a usage fee every time a user clicks on the clients' videos.
"If you think about FedEx, it's analogous to their logistics system," says Ian Blaine, 37 years old, chief executive of thePlatform.
ThePlatform faces a field of rivals providing various technologies for publishing video, from Brightcove Inc. to YouTube. More than 4.2 billion videos were viewed through YouTube and other Google properties in May, making it by far the most dominant company in Web video, according to comScore Networks. ThePlatform, whose clients collectively had more than 270 million video views in that month, says the videos it delivers consist almost entirely of professionally produced programming from well-known media companies, in contrast to the amateur clips for which YouTube is known.
Some analysts say online video could eventually pose a threat to traditional providers of pay television like Comcast, especially as devices for displaying Web video on televisions from Apple, Microsoft Corp. and others improve. "More and more of the best content is going to show up on the Internet," says James McQuivey, an analyst at Forrester Research. "As that happens, cable companies are going to get very nervous."
Still, Mr. McQuivey credits Comcast with acquiring thePlatform so it can participate in the growth of Internet video.
Sam Schwartz, executive vice president of Comcast Interactive Media, says Web video isn't a threat to cable companies, arguing the vast majority of customers will only turn to PCs or laptops for video when a television is inaccessible, because of the viewing experience on large screens. The growth in bandwidth-hungry applications like online video also benefits the high-speed Internet services offered by cable companies.
For now, nearly all of the Internet video thePlatform publishes for its clients is viewed on a PC. Within five years though, Mr. Blaine predicts the portion of its viewership on PCs could drop to 60%, with the remaining 40% divided evenly between televisions and mobile phones.