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Comcast gives Internet TV a whirl
Bloomberg News
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Published: 6/10/2009 4:16 PM

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Comcast Corp., the largest U.S. cable operator, will offer some television shows over the Internet to a test group of subscribers in the coming weeks, Chief Operating Officer Stephen Burke said.

Comcast is teaming up with Time Warner Inc. on the feature, called OnDemand Online, Burke said in an interview. The cable operator plans to offer it to more customers by the end of the year, he said.

The service may help Comcast sign up new customers who want to view programs on media besides their TVs. Comcast also may hang on to subscribers by offering them exclusive cable channels they currently can't watch for free on the Internet. Viewership at TV and film site Hulu.com, part-owned by NBC Universal and Walt Disney Co., jumped almost sixfold in the past year.

"Our primary goal is to give our customers who subscribe to our video service the option to enjoy that content in other places, which adds value," Burke said in the interview last week. "The second thing is to make sure as Internet consumption grows, it does so in a way that works for the economics of programmers."

Online video viewing rose 10 percent last year, according to Nielsen Co. A surge in viewers of Hulu.com, made it the fastest-growing Internet video site in April compared with a year earlier, the New York research firm said. Top video site, Google Inc.'s YouTube, attracted 5.5 billion viewers last month.

Comcast will conduct a trial with several programmers, including New York-based Time Warner, in coming weeks. Cable subscribers will be able to log onto to Comcast's Web site with a password to get the shows, compiled from some of Time Warner's channels. Time Warner spokesman Ed Adler confirmed that the companies are in negotiations and may complete a trial run soon.

Jennifer Khoury, a Comcast spokeswoman, wouldn't specify which channels will be included because negotiations aren't final. Time Warner's networks include TNT, TBS, CNN and Cartoon Network. Philadelphia-based Comcast owns cable channels such as E! Entertainment and the Golf Channel.

Apart from the ESPN sports network, most cable networks have kept their channels off the Web to preserve their exclusivity because they charge broadcasters to carry them. TNT's Web site features clips, not full episodes, of shows such as "Saving Grace," starring Holly Hunter, and "The Closer," with Kyra Sedgwick.

The company is working to make the log-ins secure and add shows from other networks, Burke said. Once programmers see there's a secure authentication process in place, more probably will sign on, he said.

Time Warner Chief Executive Officer Jeffrey Bewkes has been championing "TV Everywhere," his company's online TV initiative, as a potential model for the industry. Last month, he tapped Andrew Heller from the company's Turner Broadcasting unit to help coordinate the effort among cable networks and providers.

Comcast dropped 11 cents to $14.29 at 4 p.m. New York time in Nasdaq Stock Market trading. The shares have dropped 15 percent this year. Time Warner fell 17 cents to $26.32 in New York Stock Exchange composite trading.