Comcast Corporation (CMCSA), the largest cable TV operator is teaming up with Microsoft Corporation (MSFT)-owned Skype to launch high-definition (HD) video calls on Comcast’s Xfinity cable TV services. We believe that Comcast has launched this service in order to improve its subscriber base as well as add another source of revenue for the company.
Comcast’s Xfinity TV is a web-based on demand service for customers who can access both video-programming and internet at the same time. Skype through Xfinity TV includes an adaptor box, a high quality video camera and helps subscribers to make and receive video calls on their HDTV. Through a specially designed remote control they can send and receive instant messages on Skype while watching a TV show. Furthermore, customers can also accept incoming Skype audio calls with the help of a caller ID.
It can incorporate the existing Skype contacts into a global address book which also includes Facebook, Outlook, gmail and smartphone contacts. This allows the customer to find out whether any of his/her friends is online. The company offers this service at $9.95 per month for Xfinity triple pay customers.
With the loss of 37,000 subscribers, Comcast recently reported the 20th straight quarterly decline in video customers. The ongoing macroeconomic fluctuations and intensified competition in the pay-TV market are some of the main reasons for the continuous slide.
We believe that Comcast will benefit from the partnership because by providing Skype services through television they would not lose subscribers who use Skype through tablets and mobile phones. Additionally, bringing social interaction through television viewing will place Comcast ahead of its peers.
Comcast has already launched this service in Boston and Seattle and expects to launch it in South Florida by the end of this week, the success of which might prompt the other service providers to come up with a similar service.
COMCAST CORP A (CMCSA): Free Stock Analysis Report
MICROSOFT CORP (MSFT): Free Stock Analysis Report
To read this article on Zacks.com click here.