Photograph by Joe Raedle — Getty Images
By Mathew Ingram
August 14, 2015

We may have just gotten a glimpse at one of the reasons for Comcast/NBC Universal’s $200-million investment in digital news company Vox Media, and an expected similar-sized investment in BuzzFeed. The cable provider is planning to launch a video service called “Watchable” that will feature videos from popular websites like VICE Media and Vox, according to a number of reports.

Bloomberg quotes an anonymous source saying that Comcast (CMCSA) has already signed deals with the comedy site The Onion and with a teen channel called AwesomenessTV, owned by DreamWorks Animation. It is also negotiating to do the same with BuzzFeed and other publishers. Business Insider said those others include sites like Refinery29 and Mic News, but none of the deals will be exclusive.

The subscription-only news site The Information first mentioned Comcast’s plans for a video service in April, saying the company was pouring resources into the plan after giving up on a proposed takeover of Time Warner Cable. And there have been rumors about such a service even before that, based on documents that were part of the merger review, but the assumption was that it would more of a competitor for Netflix (NFLX).

 

The service that both Bloomberg and Business Insider describe in their reports, however, appears to be a rival to other sites with big video streaming operations such as YouTube (GOOG) and Facebook (FB). Both have become key sources of video, especially for millennial audiences and “cord cutters.” Watchable is expected to be available through Comcast’s X1 set-top box as well as on the web, and will have mobile apps for iOS and Android.

Reinventing the bundle

Verizon (VZ) is also said to be close to launching a similar digital-video service called Go90, according to Variety, that will include TV shows as well as music videos and other digital video from partners like VICE Media, ESPN, Nickelodeon and Comedy Central.

Comcast has tried several times to adapt to the unbundled digital future of television, including an ill-fated service called Fancast launched in 2009 that offered a YouTube-style service for finding online video. The cable company also tried to offer subscribers a Netflix-style service called Streampix a couple of years ago, but admitted in its merger filing that no one really wanted it. It was rolled into the company’s Xfinity Internet service.

 

Cable providers and TV broadcasters are dealing with a growing wave of disruption caused by the Internet, as younger users turn their backs on the cable bundle or even give up traditional cable altogether, and as the largest U.S. pay-TV company, Comcast is especially vulnerable.

The challenge for companies like Comcast is that services like YouTube, Netflix and Facebook already have large and devoted audiences that have more or less given up on cable. And becoming successful with me-too services like Watchable or Streampix requires the company to basically cannibalize its existing business model, something that incumbents tend to find very difficult.

SPONSORED FINANCIAL CONTENT

You May Like

EDIT POST