To Ward Off New Competitors, Comcast Builds a Mini Internet

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Just 10 years ago, the cable industry had a virtual monopoly on the $56 billion market for piping TV into subscribers' homes. Now, a host of new technologies is threatening that business. In addition to battling the old enemy of satellite TV, cable operators are up against Internet companies, telephone operators and even television programmers, who, in various ways, are exploring how to sell TV to consumers. Their efforts suggest the possibility that soon, consumers will be able to watch whatever they want, when they want, without the help of the local cable company. To protect its turf, cable giant Comcast Corp. has 400 software engineers building what amounts to a TV version of the Internet, stocked with movies, archived television programs and other interactive features, including a search function. Now, to push into the online-video business, among other reasons, the company is in talks with Google Inc. about teaming up to buy a stake in the Web operations of Time Warner Inc.'s America Online. But advocates of new TV-distribution technologies question how long programmers will stay loyal to the cable giants. Offering programs and movies on the Web, which is open to all, will be "too compelling from a content owner's perspective," compared with being enclosed within Comcast's proprietary system, argues Jeremy Allaire, founder of Brightcove Inc., a company that helps businesses put TV programs online.
[SOURCE: Wall Street Journal, AUTHOR: Peter Grant peter.grant@wsj.com]
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