Comcast Embraces the iPad & Streaming Trend

Comcast (NASDQ:CMCSA) has announced that it will allow subscribers to stream live TV shows on the iPad as long as they are connected to their home Internet. ^[1] This is not new and something that traditional pay-TV providers have been trying to embrace. Some other updates to the service include having a sling-box DVR used by Dish Network (NASDAQ:DISH) and Time Warner Cable’s (NYSE:TWC) iPad app. This will include several other updates as well, and we believe in general this will make the service more compelling.

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Some might argue that this move is to increase stickiness so that customers don’t defect to new alternative platforms like Netflix (NASDAQ:NFLX); however, we believe that this is more to differentiate itself against long-standing traditional rivals and take advantage of trends already ongoing in the TV market. The TV market is getting saturated and growth has become difficult for cable providers, and as more customers shift to the Internet for TV, it becomes essential for these companies to embrace the trend and in the process gain from these moves. So who will stand out?

The content among many players is more or less similar and the user interface and convenience as well as the ability to extend the experience beyond current live shows will matter the most.

What if Comcast could allow its users to stream some of the recently run shows? What if the company actually let the users create their personal channel on web that will select their favorite shows from different channels to form a personalized experience? Moves like these could add value for the customers and ensure that they stick with the company.

Our price estimate for Comcast stands at $26.60, implying a premium of almost 20% to the market price.

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1. Comcast to bring restricted live TV to the iPad, CNN, Nov 21 2011 [↩]