Cable Operators

Comcast Eyes 1B VOD Streams

3/02/2005 6:35 AM Eastern

Comcast Corp. is well on the way toward achieving its goal of 1 billion video-on-demand streams for the full year, announcing at an industry conference that VOD streams increased 18% in January to 85 million.

At the Bear Stearns Co. Inc. Media Conference in Palm Beach, Fla. Wednesday, Comcast co-chief financial officer John Alchin said the demand for VOD is strong in both mature and new markets.

Alchin said that in Philadelphia, which has had VOD for about two years, usage increased about 10% in January. In new markets like the San Francisco Bay area, Chicago and Dallas -- where VOD was launched in the fourth quarter -- usage rates have doubled.

Alchin added that VOD usage is expected to increase, especially since the launch of a free movie channel -- called Movie Pass -- which will have about 75 titles available from Sony Corp. by the end of the month, increasing to 100 by midyear.

With the closing of Sony’s acquisition of Metro-Goldwyn Mayer Inc. expected later this year (of which Comcast is a participant), Alchin said the number of available titles should double to 200 movies.

He also commented on Comcast’s joint bid with Time Warner Inc. for Adelphia Communications Corp.’s assets, adding that if they should win Adelphia, integrating those systems will not be as difficult as was Comcast’s acquisition of AT&T Broadband in 2001.

While Alchin did not speculate on how many subscribers Comcast could receive as part of that deal, several industry observers have estimated that the Philadelphia-based MSO could receive about 2 million.

“In terms of the integration challenge, because we’re looking at these properties in a way that involves filling in and expanding on footprints we already have, integration would be fairly simple” Alchin said. “Integration would not involve some of the challenges presented to us in the AT&T Broadband situation, where a huge amount of rebuild had yet to be completed. That is not the case in Adelphia.”

Alchin added that the impetus behind jointly bidding for Adelphia with Time Warner is that it presents a tax-efficient way to exit its 21% interest in Time Warner Cable, which Comcast received as part of the AT&T Broadband acquisition.

“There is absolutely no question that the opportunity we have with Time Warner to tax-efficiently exit our 21% interest in Time Warner Cable is a lynchpin that keeps us involved in and keeps us interested in the Adelphia process,” Alchin said. “Time Warner is, by any and every measure, the largest player in the venture that is proposed.”

As part of the Federal Communications Commission’s approval of the AT&T Broadband acquisition, Comcast agreed to divest its 21% interest in Time Warner Cable by 2007.

March