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Comcast is reportedly planning a launch in 2016 of a new streaming service which will be offered as an add-on to the company’s high-speed internet customers. The streaming service will allow Comcast to have a stake in the online streaming market among the other players in the game including, Dish Network, Hulu, and Netflix to name a few.

Comcast is confident that it will provide consumers with benefits they desire. According to researchers, the streaming service could generate close to $1.2 billion in revenue by the end of 2020. While this incremental revenue may not have a material impact on Comcast’s top-line in the short run, it will go a long way in compensating for the loss of growth in its stagnant pay-TV segment.

The new service is reportedly going to be priced at $15/month and will allow Comcast to acquire the millennial demographic that is needed to stay in the game. The stream will offer access to a dozen networks, including NBC, CBS, ABC, HBO, and PBS to name some.

It will not require a Comcast pay-TV connection, but it will be offered as an add-on to high-speed internet customers. It is said to be rolled out later this year in a couple of markets, but nationwide in early 2016. The company is also thinking of adding optional sports, movies, kids, and lifestyle packages for an additional $5-$10/month. This will allow Comcast to feed the appetite that consumers are continuing to long for in the streaming realm.

Competition in the Online Streaming Space

Comcast is not the only company looking into the online streaming arena. Content providers such as Dish Network, Sony, Apple HBO, CBS, etc., are some other players who have either launched their own streaming service recently or are planning to launch soon. Comcast’s most direct competition will be Dish Networks offering, known as Sling TV.

Sling TV offers a mix of sports channels, such as ESPN and entertainment channels including, HBO, AMC, TNT, and the Disney Channel. Sling, however, does not currently have a DVR service which Comcast will be providing for its customers. Comcast will also carry the big four networks that will give them an edge over Sling as well.

The biggest known advantage Sling has over Comcast is its sport channels; Comcast has not yet decided to add these channels to their line up, because there is still the question of if fans really want to watch their favorite sports team on a computer screen? Dish Network would argue, yes, considering they couldn’t handle back in April 2015 the huge influx of users logging in to watch the NCAA March Madness college basketball tournament. I could play devil’s advocate and say if that many people log in and the internet can’t handle the capacity there could be surges, and users don’t like their sports to be interrupted having them go back to their normal pay-TV option.

The Bottom Line

According to researchers, Dish Network’s streaming service Sling TV offers 20 channels and has attracted around 250,000 paying subscribers from the start of February to June of this year. Keeping this in mind, we believe that Stream could potentially have a customer base of around 500,000 by the end of its first year of offering. We estimate that Comcast will have over 27.5 million high-speed internet subscribers by the end of 2020.

Comcast is likely to follow other content providers and offer Stream to non-Comcast internet users which could bring in an additional 1 million paying subscribers. If Comcast keeps the price of the service stable, the streaming service could generate close to $1.2 billion in revenue by the end of 2020.

Comcast generated a revenue worth of $68.8 billion in 2014. The additional revenue generated from the streaming service may not make a huge difference in the company’s bottom line, but it will give them a name in the streaming space and in the long run compensate for some of the users that may depart from traditional pay-TV subscriptions.

The questions then remain: What will happen to the third party vendors, such as Netflix and Hulu? Will they try to pair up with cable companies once again and combine forces? Will cable boxes be a thing of the past? As the saying goes, ” He who wins the content, wins the game. ” So, game on.