<< New on Disc: 'It's a Mad, Mad, Mad, Mad World' and more … | Blog Home | More 'Game of Thrones' Exclusives With Season Three >>

 

Lighting a Spark on Digital Sales

14 Feb, 2014 By: Thomas K. Arnold

---

The proposed merger between cable giants Comcast and Time Warner Cable — actually an acquisition in which Comcast would buy Time Warner in a deal valued at $45.2 billion — has some interesting ramifications for the home entertainment business.

One of the most significant developments in Hollywood’s push for bigger movie download sales was the decision by Comcast last November to start offering movies for sale through its Xfinity TV store. Subscribers are able to buy select movies several weeks ahead of their release on Blu-ray Disc and DVD, just as they can on iTunes, Amazon.com and Walmart’s Vudu, among other services.

In a recent conference call with analysts, Lionsgate CEO Jon Feltheimer noted that less than three months after Comcast began selling movies, it already controls 15% of the electronic sellthrough/Digital HD market — a testament to Comcast’s aggressiveness and willingness to try new things.

“Comcast’s recent entry into the EST business is already proving to be a catalyst for accelerated [digital] growth,” Feltheimer said. “We expect additional growth as other MSOs follow suit.”

Indeed — grabbing a 15% share of the market after just three months in is a tremendous achievement, particularly if that market is expected to grow significantly in the coming years as consumers become more comfortable with the concept of digital movie ownership.

And while the merger is by no means done — expectations are it could take until the end of this year for the deal to clear all the necessary regulatory and other hurdles — a combined Comcast/Time Warner, with aggressive, innovative Comcast in the driver’s seat, could really ignite the EST/Digital HD business.

Under Apple’s iTunes thumb, EST grew slowly. And as recently as 2011, iTunes still commanded about 65% of the EST business.

But with the entry of Comcast into the market last November, it was, as they say, a whole new ballgame — centered on a box of the kind Apple can only wish it had. As the Motley Fool noted, “Comcast — unlike Time Warner Cable — has invested heavily in its own set-top box technology. Gone are the days of sluggish, buggy cable boxes: the new X1 and X2 platforms offer Comcast subscribers a highly advanced, cloud-based set-top box complete with voice commands and personalized recommendations. … Not only do Comcast's X1 and X2 differentiate it from its satellite-based competition, but they also serve as gateways to Comcast's pay-per-view services.”

Comcast’s new Xfinity TV store competes directly with Apple’s iTunes, and given Comcast’s massive footprint and the nature of competition, it’s almost a foregone conclusion that we’re going to see significant growth in online movies sales — and in Comcast’s market share.

Throw Time Warner into the mix and Comcast’s already formidable clout in the marketplace becomes even stronger — positioning online movie sales for even further growth.

The studios desperately want the ability to sell their movies without the hassles of a physical product. They’ve long had the will, and thanks to Comcast the way is suddenly becoming very clear.

Bookmark it: