Report: Comcast plans YouTube-like online video service

Comcast is planning a nationwide online video service with short-form content to compete against YouTube, The Information reported yesterday.

Comcast has so far not offered online video services outside of its cable territory.

"The proposed video service would mark a brand new chapter for Comcast, which would be able to play in a loosely regulated market, reach a national audience, and possibly even make its service available outside the US," the report said. "It also may be necessary move, given that younger viewers have been gravitating toward Web videos made by a new generation of artists. One purpose of the service is to add new types of shows to Comcast’s cable package, allowing people to watch them on TV screens."

Comcast has been working on the project "for at least a year and a half" but decided not to move forward until after the government finished reviewing its proposed Time Warner Cable (TWC) merger, the report said.

US government officials ultimately prevented Comcast from buying TWC because they believed greater size would give Comcast power to stifle competition from online video. Comcast argued that it had no incentive to harm online competition because its own online video service was only available within its cable territory and only for Comcast's Internet and cable TV customers. Comcast's Streampix online video service launched in 2012 but has not been successful.

From a technical standpoint, Comcast would probably have little trouble operating a nationwide video service. Besides providing Internet access to homes, Comcast uses its extensive fiber and cable infrastructure to sell transit and content delivery network services to businesses.

By making the service more like YouTube than Netflix, Comcast could avoid the problem of securing nationwide programming rights from the biggest content owners. Last year, Comcast said that cable companies have not found a viable business model for launching online video outside their cable territories, partly because of "the difficulty of obtaining national programming rights."

But Comcast could have a difficult time making a YouTube-like service popular with consumers and artists. Comcast would have to appeal to the kinds of video creators who upload video to YouTube in order to create demand. Videos could be free and supported by ads or delivered via subscriptions by content owners.

Comcast has not set a launch date, and there's even "an outside chance" that the company could scrap the project "because of shifting priorities or new acquisitions," The Information report said. "But the company has specifically hired employees from YouTube to help with the video effort, according to a person familiar with the moves."

We contacted Comcast about the report today but haven't heard back.