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Comcast CEO: VOD Transactions Up 20%

11 Mar, 2014 By: Erik Gruenwedel

Comcast Cable CEO Neil Smit

No. 1 cabler now selling first season of ‘House of Cards’ via subscriber set-top boxes; ‘Orange Is the New Black’ coming.

Shortly after Neil Smit was named CEO of Comcast Cable in February 2013, he approached Steve Burke, CEO of subsidiary NBC Universal, about developing a digital distribution platform capable of selling and renting movies and TV shows.

In a matter of months Comcast readied its broadband Xfinity On Demand digital media store, launching it in November with almost immediate dividends. That’s because Universal Studios Home Entertainment launched the studio’s box office hit, Despicable Me 2, first on Comcast’s movie store over the Thanksgiving weekend.

It quickly became the top-selling digital sellthrough title of 2013, followed by Fast & Furious 6, and most recently, The Hunger Games: Catching Fire, the latter bowing at retail March 7.

“I think we were number two for Gravity, behind iTunes,” Smit told analysts at the Deutsche Bank Media, Internet & Telecom confab in Pearl Beach, Fla.

Indeed, Smit said VOD transactions are up 20%, with VOD views (including free content) up 25%.

“It [has] surprised us how well the product has done,” Smit said. “I think the value of having the two companies (Comcast and NBC Universal) together is really in that ability to pick up the phone and throw an idea past your counterpart and get things done without signing contracts for six months.”

The CEO said Comcast now has the ability to increase the value of its linear TV cable operations through an expansive digital support system, backed by content license rights.

Seemingly borrowing a page from Dish Network’s recent landmark digital agreement with The Walt Disney Co., Comcast agreed to disable subscribers’ ability to fast-forward on-demand TV programming up to three days (C3) after initial broadcast. In return, Comcast gets access to current-season programming — a competitive advantage over Netflix, Amazon Prime Instant Video and Hulu Plus.

Comcast’s Streampix subscription streaming service is limited to catalog programming, while the digital store focuses on new releases.

Indeed, the cabler’s new digital deal with Sony Pictures enables it to sell and rent first-season episodes of “House of Cards” to subscribers. Sony creates the award-winning political series, which is licensed exclusively to Netflix in the first-run pay-TV window.

Comcast is also getting rights to the first season of Netflix’s “Orange Is the New Black” from the show’s creator, Lionsgate.

“That, we believe, [is] what the consumer has valued the pay-TV window as,” Smit said. “They watch an episode of a show, they want to go back and see what the series is about, they want to go back to episode one. That's what we're focused on in VOD.”

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