In simple terms, cable companies actually beat Netflix to the streaming video punch long ago.
So-called video on demand, or VOD services have been a popping up inside the cable and satellite TV packages since the late 1990s. When true broadband networking became popular, those VOD features also started to make sense. Even if you only subscribe to your cable company’s TV services with no broadband whatsoever, your cable box can still extract on-demand video data like a champion.
It’s so seductively simple:
- Point remote at cable box.
- Hit the Video On Demand button, or dig through the menu system for a while.
- Pick your favorite show or movie.
In many ways, that’s exactly how we consume Netflix or Hulu today. Very similar on-demand streams have been part of your standard cable TV subscription for ages. Satellite providers like DirecTV need a separate broadband service plugged into the cable box, but it’s all seamless and easy for the subscriber either way.
This way, you can watch the next episode of your favorite TV show without setting up the DVR to record it first. As a subscriber to premium TV channels such as HBO or Starz, you can pick and choose among this month’s content collection rather than waiting for the live TV schedule to deliver the goods.
If done correctly, VOD services can clone the Netflix model to perfection. But wait — there’s more! Given the long-standing, cozy relationships between content producers and their favorite broadcast partners, someone like Comcast or AT&T/DirecTV could very well extract more attractive terms and fees for this service than Netflix can.
Let’s say Comcast decides to go all-in on VOD offerings. First, the cable giant would pull every string at its disposal to set up the proper back-channel licensing contracts. Then, the revamped on-demand service would get a national marketing push of epic proportions, complete with marching bands on Times Square and 30 minutes of Super Bowl ad space. The Most Interesting Man In the World would be on board, next to that Old Spice guy.
Consumers would be showered in both eyeball-grabbing attention magnets and solid selling points. “This is what we have, here’s how easy it is to use it, and look at that dancing platypus!”
That’s where Netflix shares drop through the basement floor as customers flee the service in favor of better and brighter VOD vistas.
Read the entire story here.