Comcast Sees HD Light, But Verizon Going Dark?

There were two interesting and somewhat conflicting articles in today’s Multichannel News regarding the issue of the need for more HD channels -- or HD "choices" -- by a cable or DBS provider. As noted on TVPredictions.com this morning (http://www.tvpredictions.com/comcast070708.htm), Comcast seems to have changed its tune on the need to add new HD channels.

In the past year, cable companies such as Comcast have fallen behind Directv in regards to the number of HD channels offered on their systems. As of now, Directv offers about 95 separate HD channels with Comcast offering less than half as many. As Comcast lacks the bandwidth to add many more HD channels, they chose to counter Directv’s ad blitz by claiming that they have more HD “choices” than Directv due to their rather extensive offerings of HD on Demand. Comcast has touted that they have more HD offerings that Directv trying, in this writer’s opinion, to dupe consumers into thinking that Comcast actually has more HD channels than Directv, relying, rather cynically, on the lack of sophistication on the part of the consumer who will be unlikely to be able to differentiate between HD “channels” and HD choices.

Needless to say, I was against this approach from the beginning as I felt and still do, that consumers want more HD channels not more HD VOD. The more HD channels the better as far as I am concerned. I don’t know about you but when I first sit down to watch TV, I go to the channels first and HD channels before SD channels and almost never even go to the Video on Demand (VOD) section. Apparently, polling of their subscriber base and the loss of subscribers to Directv and Dish by Comcast has lead them to see the errors of their ways, at least according to Thomas Eagan, an analyst at Collins Stewart. Comcast now appears poised to spend significant capital to upgrade the bandwidth of their systems to add many more HD channels without having to rely on switched digital video and reducing picture quality by squeezing three HD channels into a slot which can only really take two without suffering PQ issues.

Comcast now seems to finally see the light that the best way to reduce churn and to pull subscribers away from Directv, DISH and even Verizon and ATT is to offer more HD channels, more HD VOD and uncompromised picture quality. Hopefully, Mr. Eagan’s assessment is correct and this is the path Comcast is taking. The only downside, of course, is that the rates of Comcast subscribers will go up to defray the costs of this upgrade. Well, so what else is new? Comcast has been raising their rates anyway while still providing less HD channels and poorer picture quality. At least now they will raise their rates while offering subscribers improved performance, hopefully.

The same day Comcast has finally seemed to see the light, along comes another piece in Multichannel News in which Verizon seems to step away from their commitment to offer 150 HD channels by the end of the year. Terry Denson, Vice-President of content and programming at Verizon’s FiOS TV service, is quoted in the piece that the number of HD channels carried is not the issue and that their goal is not to reach a specific number of channels by year's end but to be the the”categorical leader” in HD programming “by any measure”.

Well, this is a pretty nebulous statement as far as I am concerned and is a clear retreat from FiOS TV’s previously stated goal of having 150 HD channels by the end of the year. Just what is a categorical leader by any measure anyway and by whose definition? Even more concerning is Mr. Denson’s reference to Comcast’s decision to offer more HD VOD as a great business model, with FiOS pledged to have 1000 HD VOD offerings by the end of the year. I guess Mr. Denson hasn’t been paying attention, as Comcast seems to have determined that the HD VOD they had been touting is NOT the answer and that carrying more HD channels, and hopefully, as many as are available, IS the way to go. I would therefore offer a bit of unsolicited advice to Mr. Denson. Come out and commit to offering all available HD channels by the end of the year along with your HD VOD offerings. Hammer home how advanced your fiber network is compared to the competition and how you have bandwidth galore to offer all the HD we could ever want, with pristine video and audio quality. Give your current subscribers no reason to even think of leaving and give cable and DBS customers reason to switch to FiOS. Given the flattening population growth in the US, is seems as though the pool of available customers is not growing all that rapidly. Therefore, all cable and DBS providers will be fighting tooth and nail to grab an ever growing share of a stationary market. All the reason in my book, to be out ahead of the curve and state with clarity, that you will have ALL the HD channels we want and not that you will pick and choose based upon issues such as content and diversity, what channels you will offer as it seems, your competition, will in fact, offer all the channels we want!

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