Comcast Takes the First Steps Toward Winning Back Cord Cutters

Stream from Comcast will let subscribers watch live TV on their tablets, computers, and smartphones. Source: Comcast

Earlier this year, Comcast saw its broadband Internet subscribers outnumber its television subscribers for the first time. In an era of extensive streaming services, many consumers are opting to do without cable.

During the weekend, the Fool published an article titled, "3 Ways Cable Could Be Great Again." In the article, I said that cable companies need to find a way to start delivering content to subscribers' devices wherever they are. Stream, a new service from Comcast, doesn't quite accomplish that goal, but it lays the important groundwork necessary for it to build upon going forward.

The details about StreamStream is a new service Comcast will pilot in Boston starting this summer. It includes all the broadcast networks, and HBO streamed over the top of a Comcast Internet connection to any Internet-enabled device for just $15 per month.

There are a couple of catches, though. Subscribers must have a Comcast broadband subscription. More disappointing, subscribers will only be able to stream live TV within their homes. Venturing outside the home, users will only have access to on-demand titles from Comcast's StreamPix service.

Given that HBO Now is priced at $15 per month, and Stream subscribers should be able to use their credentials to log into HBO Go, Stream looks like a good deal for customers interested in HBO. Comcast appears to be subsidizing the cost of streaming the broadcast channels with the fee it collects from selling HBO, which is a rather customer-friendly thing to do.

Not exactly for cord cuttersStream might not appeal to cord cutters or customers considering cutting the cord. In fact, Comcast sells a bundle of TV + Internet including HBO for less than the cost of the equivalent Internet service and a Stream subscription. Comcast also won't support set-top boxes designed to stream content to the big screen.

Indeed, Stream is more appealing to cord nevers -- young consumers who've never subscribed to cable TV and may not even own a television set. For them, the primary screen is a computer, or tablet, not a television set, and it's a market Comcast has been unable to reach beyond providing them Internet service.

Instead, direct-streaming services have made a killing off that market, and HBO and Showtime finally saw the opportunity available, as well, this year. With more broadband subscribers than television subscribers, Comcast needs to consider ways to make as much money off cord nevers as possible. Value-added services like Stream will help.

Laying the groundworkStream lays the groundwork for a couple of things. First, it's a service that will enable Comcast to leverage its existing deals with media companies to offer over-the-top streaming. That's increasingly important as the number of broadband subscribers at Comcast outgrows the number of video subscribers.

Second, it puts into place a service that could eventually expand outside the home and offer true TV Everywhere service. Last summer, the Supreme Court ruled against a rival cloud-based DVR system for streaming live free-broadcast content over the Internet to subscribers. At the same time, the decision pointed out that it shouldn't have an effect on cable companies and other cloud DVRs. The key difference is that Comcast and other cable companies pay retransmission fees to broadcasters, whereas the case involved a company that gathered broadcasts for free over the air.

With enough interest, Comcast could begin streaming content outside the home through Stream. It may have to pay some good lawyers, or pay the media companies, but with the growing number of cord cutters, it needs to pay someone. Otherwise, Comcast risks losing broadband customers to competitors, and video revenue to more-nimble streaming services.

The article Comcast Takes the First Steps Toward Winning Back Cord Cutters originally appeared on Fool.com.

Adam Levy has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.