Comcast to put cable shows online for paying customers

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PHILADELPHIA — Comcast Corp. says it has developed an online
video player that gives viewers a TV experience on the Internet, and the cable
giant intends to put shows and movies from 24 cable-TV networks online by the
end of 2009.

But it won’t be free, which is what most people have come to
expect of content on the Internet.

Comcast cable-TV customers — about 24 million in the United
States — will have sole access to the cable-TV fare through an online password
and authentification process that references Comcast customers’ billing
records.

About 5,000 Comcast cable-TV customers tested On Demand
Online this summer. Comcast says it will expand the service, which customers
will use through the Fancast.com and Comcast.net Web sites, to all its
subscribers by Jan. 1. The company will e-mail customers to tell them when the
service goes live.

Comcast CEO Brian Roberts on Tuesday updated the media and
industry officials on the new service at the Web Summit 2.0 gathering of
technology executives in San Francisco.

In Philadelphia, Comcast executives discussed the project,
which was initially announced in June with Time Warner Inc. and was called at
that time TV Everywhere. “All the metrics are good, and we are just
getting started,” said Madison Bond, Comcast’s executive vice president of
content acquisition.

Comcast has negotiated deals with content providers to make
the entertainment available on the Internet. Those participating include Time
Warner, Starz, CBS and the Discovery Channel. Bond said that Comcast is still
securing programming rights for additional cable-TV and movie content for the
Internet.

Comcast views On Demand Online as an extension of a cable-TV
package for customers and allows entertainment companies new sources of online
advertising. Bond declined to discuss programming deals.

Alix Cottrell, vice president at Fancast.com, said Comcast
developed the online video player with an outside firm. Through a special
bit-streaming technology, the player smooths out the jerky movements of other
online players by slightly altering the brightness of the TV picture when there
are problems with Internet speeds.

Cable industry executives fear that if they don’t move
quickly to put more entertainment and news online, hackers could begin posting
pirated entertainment and news on the Internet and undercut the cable-TV
business model — which is what happened to the music industry.

Comcast executives also are vehement about not putting
entertainment and news online for free.

With On Demand Online, Comcast customers view only those
cable-TV networks in their individual cable-TV packages. Thus, customers who
purchase HBO or Cinemax through their cable TV can view HBO and Cinemax on
their computer. But if they don’t purchase HBO or Cinemax in their Comcast
cable package, they can’t get it online.

Comcast’s project to exploit the Internet comes as Wall
Street analysts are speculating how cable companies will deal with Internet
video. The big threat is that customers will cancel their cable-TV service,
although cable executives and others believe online video can be complementary
to cable-TV services and boost revenue through new advertising.

Industry experts have said that online video may be one
reason that Comcast is negotiating to purchase NBC Universal Inc., one of the
nation’s largest movie and TV studios.

Comcast is in advanced talks with General Electric to
acquire a 51 percent stake in NBC Universal. The deal includes provisions for
Comcast eventually buying all of NBC Universal.

By owning the Hollywood entertainment, Comcast can control
the flow of entertainment to the Internet, some contend.

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