When DirecTV said in January that it would have 100 high-definition channels by 2009, Comcast chief Brian Roberts returned the U.S. satellite leader’s salvo by saying its 25 million cable customers would have access to more than 1,000 HD “choices”—i.e., combined video-on-demand titles and linear channels—by the end of this year, up fivefold from last year.
Charged with getting the largest U.S. cable company to keep this promise, former investment banker Derek Harrar, the company’s senior VP and general manager of video services, helped it reach the goal—which includes providing more than 200 HD movies and 300 HD TV shows on-demand —more than two months early. He recently talked to TelevisionWeek correspondent Danny King about the experience.
TelevisionWeek: How does reaching your January goal of 1,000 HD choices by year-end position you as far as HD inventory among other multichannel service operators like satellite and telecommunications companies?
Derek Harrar: We’re probably the only service provider to deliver on that promise in content, and we’re pretty happy about that. We have a little over 200 high-def movies. If you were sitting on your sofa and watched them end to end, you’d be sitting there for two weeks. That’s a lot of movies. We wanted to come up with something fun and exciting and really stress things that are relevant to the consumer.
TVWeek: What are your customers watching on video-on-demand?
Mr. Harrar: When we originally launched on-demand programming, we’d really see high usage in the action genre. Over time, romantic comedies have picked up a lot, though with HD it still tends to skew toward the action side. But for instance, with “Mad Men,” we’ve seen about a third of the views show up in hi-def. That’s a high-water mark for us. When we do promotional stunts—we did one with gangster movies like “The Godfather” and “A Bronx Tale”—we usually see 20% to 25% show up in HD, but we’ll get about 30% for “The Tudors” on Showtime.
We’re looking at where the usage is going to be and how the content’s going to be relevant. A really good example is that we don’t have any children’s content in hi-def. The reality is that when we put on children’s shows, the usage just isn’t there. … But overall, usage in hi-def is about two and a half times what it was last year.
TVWeek: In the third quarter, Comcast boosted the number of subscribers who received either high-definition or digital video recorder services by 4.3%, compared with a 2.6% increase in overall digital cable subscribers. How much of this do you think has to do with the increased HD VOD offering?
Mr. Harrar: Something in the range of 70% of our set-top owners have used on-demand. The hi-def customer tends to be a little more savvy about the merits of time-shifting, and on-demand is time-shifting technology that resonates with them.
TVWeek: Some analysts have said Comcast had to expand its VOD inventory in HD to be competitive simply because cable companies don’t have the bandwidth to match linear HD channels with satellite and telco services. What’s your response to this, and how many linear high-definition channels does Comcast provide?
Mr. Harrar: It depends on the market, but it’s kind of in the 30 to 50 range. But here’s how we look at it—we’re very focused on where the usage is. If you ask customers if they’d rather watch the content live or on their schedule, four out of five would rather watch on their schedule. Customers would rather watch roughly two-thirds of TV shows, and even about 20% of sports events, on their schedule.
Look, the first thing that we think about is what’s important to our customers. That’s why we go with the content strategy we have. We’re doing 300 million views, or about 150 million hours, of VOD every month. … We know we have the perfect strategy because we know the usage is there.
TVWeek: AT&T and Verizon added almost 500,000 customers for their U-verse and FiOS services. Is there concern about losing customers to them?
Mr. Harrar: You have new competitors coming into an existing space, and those are certainly ones that have some scale and resources. We’re all over it. We’re very focused on retention programs for customers, but the most important thing from a product perspective is to have the best services. And if you compare our HD offering to theirs, there’s just no comparison.