Comcast Corporation (CMCSA) – the largest cable MSO in the U.S. – is performing a new advertisement technology test with its earlier TV shows which are generally viewed through Video on Demand (VOD) service.
Comcast will include recent ads in its previous aired programs so that the viewer gets to see an updated commercial with an older TV show. The ads will be programmed in such a way that they cannot be skipped while watching the show.
Generally most companies pay for live ads or in the three days after the program is telecast. However, this concept may change once Comcast's new technology is implemented.
During the third quarter of 2013, Comcast generated advertising revenues of $541 million, down 10.8% from the year-ago quarter. The new innovative ad insertion concept will not only create a separate revenue stream for Comcast but will also bolster its ad revenue business going forward.
As per the research firm Rentrak, the VOD advertising market is growing at a phenomenal rate with a market size of nearly $1 billion. Such strong growth is mainly buoyed by the availability of faster network speed, which has induced most viewers to watch movies or any TV programs on the Internet.
The new ad insertion concept is currently applied with shows on Comcast-owned NBC network and The Walt Disney Company’s (DIS) ABC channel.
Comcast is gradually deploying its next-generation Xfinity TV, an on-demand, Web-based service, for subscribers who will have access to both video programming and the Internet. Xfinity TV currently covers 95% of the company’s footprint.
Comcast also launched its innovative Xfinity Streampix, a subscription based on-demand video streaming service. This is an enhancement of the company’s pay-TV offerings, which currently provide traditional TV shows and Xfinity on-demand shows for TV sets and broadband devices.
Such innovative value-added services will not only reduce subscriber churn but will boost its new format of ad revenue business in the upcoming quarters. Moreover, it will also help the company to safeguard its position against major cable and satellite TV operators like Time Warner Cable Inc. (TWC), Dish Network Corp. (DISH) and DIRECTV.
Currently, Comcast Corporation carries a Zacks Rank #2 (Buy).
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