Long-Term Strategies & Proposed Solution
As content traditionally distributed via cable TV finds footing in the Internet streaming market and as companies such as HBO begin appealing directly to consumers via the Internet, Comcast has several options.
1) Enter the Internet streaming market with a Comcast product.
2) Do nothing—disregard online streaming as a major threat and rely on existing revenue streams.
3) Re-evaluate current bundle offerings and cut add-on channel fees to reduce costs.
Given Comcast’s internal capabilities and available content, the most logical solution is for Comcast to enter the Internet streaming market.
Comcast’s introduction of the X1 platform in 2013 is the closest the company has come to entering the Internet streaming market and its success indicates the company is capable of attracting attention and succeeding in the Internet streaming market. The X1 platform, although available via hardware, provides On Demand content, cable TV recordings, and some online content. Within a year, about
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This strategy would have little impact on existing customers unless they chose to switch bundles. Comcast does not risk losing dominance in the cable TV industry by entering the Internet streaming market. Additionally, since Comcast would be delivering multiple services, they would have the opportunity to offset costs of providing Internet streaming with the revenues they build from providing Internet. Assuming that entering the Internet streaming market would eliminate the add-on fees paid for premium channels on cable TV, Comcast could negotiate lower programming fees per network. Lastly, entering this market would not require additional hardware in households. Since Comcast is already installing their Internet service and consumers purchase personal equipment to watch content, the company would not incur the costs of additional