Comcast's Movie Blast

With Project Infinity, the cable company is quadrupling its on-demand movie offerings. Can it beat Internet delivery methods, like Apple's?

by Ronald Grover

In a market soon to be flooded with new ways to get movies fast and cheap over the Internet, companies that deliver films over cable and satellite systems risk getting nudged aside. Not so with Comcast (CMCSA). In a move designed to keep its subscribers away from the "download" button on their favorite new site, the cable industry's largest company on Jan. 8 announced a massive upgrade of its video-on-demand offerings. Project Infinity, unveiled by Comcast Chief Executive Officer Brian Roberts at the annual Consumer Electronics Show in Las Vegas, boosts the number of on-demand movies to 6,000, from 1,300 a month.

The move comes days before Apple (AAPL) CEO Steve Jobs is due to announce a new video-rental component to help boost the fortunes of Apple's video business (BusinessWeek.com, 12/28/07). Comcast executives hope the enhanced on-demand service will Apple-proof an already hefty movie offering. The cable operator says its video-on-demand services account for roughly 275 million viewings a month.

To bolster Project Infinity, Comcast is making the most of existing deals with movie services including Time Warner's (TWX) HBO, CBS's (CBS) Showtime, and Liberty Media Corp.'s (LCAPA) Starz. That gives it a leg up on Jobs, who is currently out trying to add content on a deal-by-deal basis. He's making headway, but has a long way to go (BusinessWeek.com, 1/7/08). "We're already here," says Derek Harrar, Comcast's senior vice-president of video. "If anyone else wants to enter the video-on-demand business they'll have to follow us."

Fan Base

Indeed, while Comcast executives won't talk about it, it is clear that as Jobs and others work to launch their own services, the cable giant enjoys the kind of influence with movie services like HBO that will let it cut deals that are as good, or better, than those Apple can sign. Jobs is said to be trying to get studios to give him their movies for release at the same time they are available at video retail stores like Wal-Mart (WMT). Studios like to hold off on other releases in hopes of securing more lucrative DVD sales. But Comcast is already testing so-called "day and date" releases with Warner Brothers; if Jobs gets them, the cable operator would surely muscle its way into getting them as well, according to well-placed cable executives.

Comcast's Project Infinity announcement comes during a busy day for the cable operator. Comcast also announced the formal launch of Fancast, an online service that would give its subscribers the ability to go online to fancast.com to watch more than 3,000 hours of streaming videos of TV shows from the likes of CBS and Fox (NWS) while using the site to order videos, get iTunes downloads, and even manage their digital video recorders to record TV shows at home while they're at work.

Comcast says it expects to cut deals with other cable operators to offer the same service to them, and would make much of its money from free advertising, or affiliate fees in the case of DVDs or download sales. Some of the DVR functions won't be available until later this year, although the Fancast site is available now.

Grover is Los Angeles bureau chief for BusinessWeek.