New Technology Could Lead to More Advertising Revenue for Comcast
New technology could help Comcast (NASDAQ: CMCSA) earn advertising revenue from streaming videos. The cable operator is testing technology that lets it insert up-to-date commercials into past episodes of programs that viewers watch through video On Demand services, Reuters reported.
Comcast is among the companies that have lost revenue because large numbers of people use video On Demand technology to watch their favorite shows at different times. Under the current business model, advertisers only pay content providers for commercials watched within three days of the original broadcast date.
The new technology would allow Comcast to place a brand new commercial into a six-month old episode of a popular series that a person is watching through Comcast's On Demand service. Reuters reported that Comcast and ratings company Nielsen Holdings (NYSE: NLSN) developed the service. The new technology is being tested on broadcast shows on NBC, a Comcast subsidiary, and ABC, which is owned by the Walt Disney Company (NYSE: DIS). So far it is not being tested on any cable programs.
CBS (NYSE: CBS) is also interested in the service, Comcast senior vice president Matt Strauss told Reuters. Strauss believes that Comcast will be able to market the service to advertisers sometime next year. It isn't clear if the service will affect programs shown through other providers such as Netflix (NASDAQ: NFLX)
The news of the new technology didn't help Comcast. The cable operator's shares dropped by -.66 percent in mid-day trading on Monday.