Why Comcast Is Making it Easy For You to Watch the Competition

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Why Comcast Is Making it Easy For You to Watch the Competition

Feb 27, 2017

As more TV viewers get their video entertainment through streaming providers like Netflix and YouTube, some cable companies that once saw these newer services as enemies are starting to cooperate with them.

Comcast, for example, said Monday that it is adding YouTube to its X1 digital set-top boxes, a new feature that it will be rolling out later this year. Video content from the Google subsidiary will be available through a dedicated app on the box, which means YouTube videos will also be included in recommendations or searches done by users on their X1.

This is similar to the deal that Comcast announced last fall with Netflix (nflx), which marked the end of a somewhat fractious relationship between the two companies.

YouTube X1

Before the deal, Netflix had complained that Comcast was breaching the principle of “net neutrality” by giving its own streaming service preferential treatment compared with Netflix. People streaming via Comcast’s built-in feature was able to do so without affecting their bandwidth caps, but Netflix was not given the same treatment.

The relationship between YouTube (goog) and Comcast hasn’t been nearly as contentious as that, but it’s still unusual to see the cable giant building support for the streaming service into its set-top box, since YouTube is theoretically a competitor for cable viewers.

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And YouTube isn’t just competing with its regular collection of uploaded videos, and its recently launched YouTube Red subscription option. It’s also expected to roll out a cable-TV style service soon called “Unplugged,” which would include content from traditional TV channels like CBS, Fox, NBC, and ABC.

Coincidentally, YouTube announced on Monday that it had passed a new milestone that puts it even closer to competing not just with Comcast, but with television viewing as a whole in the U.S. The company said that last year, users of YouTube and YouTube apps watched more than one billion hours of video daily.

Nielsen estimates that U.S. TV watchers consume about 1.5 billion hours of video daily, which means that YouTube is within striking distance of matching that total. The one billion hours watched last year was more than 10 times the total watched in 2012, YouTube said.

So why would Comcast (cmcsa) decide to make it easier for users to watch a competitor? On some level, the cable giant knows that viewing is moving to digital streaming services whether it likes that fact or not. So it might as well hang onto subscribers by offering them some of that.

If a Comcast subscriber can get YouTube and Netflix on their set-top box easily, the theory goes, then there’s less incentive for them to drop cable altogether and replace it with an all-you-can-stream Internet account.

Of course, anyone with a digital streaming box like Apple TV or Roku or Amazon’s FireTV, or a “smart TV” from one of a number of providers can already watch YouTube and Netflix on their sets using apps. So Comcast’s addition of those services is more of a sand-bag strategy aimed at keeping the viewers it still has as long as possible.

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