Comcast Has OTT Rights to Offer Some Channels Nationwide: Report

But company has been adamant that economics of an out-of-footprint, over-the-top TV service don’t add up
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Comcast has secured the rights to offer some channels over-the-top on a national basis but would have to renegotiate deals to do the same for others, Bloomberg reported.

Bloomberg said those rights, in many cases, come way of “most favored nation” clauses in carriage deals that would provide the same rights granted to other distributors, including a new class of virtual MVPDs. The report added that Comcast has also asked for those rights in some of its carriage negotiations, though it would still have to rework its deals with programmers such as CBS and ESPN, which is part of Disney.

“We just fundamentally believe, for now, that our in-market footprint strategy is where we add the most value to consumers,” Brian Roberts, Comcast’s chairman and CEO, said last summer on the company’s Q2 call, echoing what he said last May at the INTX show in Boston. “OTT economics are unproven to us. It’s not clear that that’s the right strategy for us.”

RELATED: Roberts: 'OTT Economics Are Unproven to Us' 

Last April, Comcast Cable CEO Neil Smit, who will soon transition to the role of vice chairman at Comcast Corp., offered similar sentiments that Comcast was comfortable operating a pay TV business in its existing footprint.  

While there’s nothing technically that could prevent Comcast from offering a service like DirecTV Now, if it had the rights, he added that Comcast, so far, “haven't seen an OTT model that really hunts…But we'll continue to stay tuned into the market and be prepared to respond accordingly."

Of more recent note, Matt Strauss, Comcast’s EVP and GM of video and entertainment services, said at a Wells Fargo conference in November that “OTT is not for the faint of heart, especially a video-only OTT service. When you really try to evaluate the business model, we have not seen one that really gives us confidence that this is a real priority for us.”

Comcast has been able to turn the tide without having to resort to an OTT TV product, as it’s been able to grow its video base within its traditional footprint. Comcast, led by its new X1 platform, added 161,000 video subs in 2016.

RELATED: Comcast Backs Bet on X1

Comcast has also been able to broaden its video influence beyond its borders in other ways. For instance, it has been expanding the reach of its X1 technology platform through syndication/licensing deals with major MSOs, including Shaw Communications of Canada, Cox Communications and, more recently, with Toronto-based Rogers Communications.

RELATED: Shaw Launches ‘BlueSky TV,’ Powered by Comcast’s X1 Platform

Still, securing out-of-market rights to TV programming is viewed as important – Bloomberg termed in as a “hedge” -- as the video competitive landscape continues to shift and change amid the small but growing cord-cutting trend, and the recent launches of slimmed-down OTT-delivered virtual MVPD packages from Sling TV from Dish Network, AT&T’s DirecTV Now, as well as coming live multichannel offerings from YouTube TV and Hulu, which counts NBCU among its backers. It makes sense that operators like Comcast would want those digital rights, just in case the market conditions change to the point that it would be prudent or necessary to put them into action.

RELATED: YouTube TV Emerging Amid Accelerating Cord-Cutting Trend

But having Comcast, or any cable operator, launch pay TV services out of market that compete with other MSOs would disrupt the industry in more ways than one, as many of them are partnered up through organizations, associations and ventures that include CableLabs, the NCTA - The Internet & Television Association, SCTE/ISBE, the American Cable Association, CTAM, and Canoe, the cable-backed advanced ad venture, to name but a few.

Comcast, meanwhile, has been developing its own in-footprint skinny bundle service with Xfinity Stream TV, a managed IPTV service that’s being tested in a few markets ahead of an expected broader rollout later this year under a new brand name.

RELATED: Comcast: Stream TV Is Not ‘OTT’

Comcast is also working on a new mobile product that leans on its MVNO deal with Verizon, but has not announced how video services might factor into that offering.

RELATED: Roberts Maps Out Wireless Goals