Challenge is in digital video

Consumer choices lead a cable giant into the world of more on-demand programming

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For Comcast Corp. Chairman and Chief Executive Officer Brian L. Roberts, the key challenge in today's digital video world is how to become the Google of television.

Roberts, who heads the nation's largest cable television provider, said broadband Internet makes the traditional cable TV business obsolete. As a result, he said, Comcast is stressing its on-demand video service, which enables customers to view movies and programs whenever they want. Consumers are beginning to get more choices in how they view video content, whether it is online, on mobile phones or new delivery schemes coming soon from the phone companies. Even Apple Computer Inc. is getting into the video business with the introduction of a new iPod that plays videos.

These trends are likely to accelerate as more consumers have high-speed Internet access at home. More than half of all U.S. Internet service is delivered over broadband connections. And as transmission speeds continue to escalate, customers will start downloading video programming much as they download music.

The challenge to Comcast and others television providers is to persuade customers to subscribe to their service rather than just surf the Web themselves, downloading videos. "We really do believe in change," Roberts said, referring to the "burden of incumbency" cable companies and phone providers face when traditional business is threatened by new technologies. "Other operators looked at on-demand and backed away because it's disruptive. We said `Let's do it.'"

Part of Comcast's strategy is to become more like Google by making it easier for customers to search for the video content they want, when they want. One part of that strategy is developing a more robust interactive TV viewing guide as Comcast continues to add content to its on-demand programming.

These technologies must be easy to use, Roberts said in a recent speech to the Executives' Club of Chicago. He said he has focused on upgrading the video service.

"Other cable operators looked at providing phone service, but we looked at TV on demand," he said. "Not just movies, but regular programming and even untraditional videos, like `how-to' programs. We started providing on-demand service to our customers for free because it adds value and differentiates us."

Comcast subscribers must have a digital service package to receive on-demand programming. However, Roberts said, Comcast plans to provide new set-top boxes to customers who don't have digital cable service so that they, too, can get some form of on-demand video.

Comcast faces competition from satellite dish operators, cable operators such as RCN and WOW, and will soon face competition from SBC Communications Inc., Verizon Communications Inc. and other telephone companies that plan to offer video to their customers once they upgrade their networks.

Roberts said the moves by SBC and Verizon don't make economic sense, but the phone companies are moving into video because they fear a loss of customers to the phone service that Comcast and other cable operators are introducing.

Jon Van writes for the Chicago Tribune.

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