Comcast wants to be thought of as a broadband company that offers complimentary TV, mobile and home security services.
That line of thinking was reflected in Comcast’s recent unveiling of Xfinity Flex, a streaming platform exclusively available for Xfinity internet customers using its xFi Gateway router.
Comcast’s vision for Flex revolves around the idea of becoming an aggregator of services that are all accessible via an integrated guide.
Flex integrates Netflix, Amazon Prime Video, HBO, Showtime, Pandora and iHeartRadio and more, plus Comcast’s home WiFi, mobile, security, and home automation services.
The $5-per-month service requires the use of a box – akin to a Roku, Fire TV, Apple TV or Chromecast.
However, it seems likely that many Xfinity internet subscribers would prefer to pay a one-time fee of $40 for a Roku box or comparable device rather than a recurring service fee in perpetuity.
Services such as Roku also provide thousands of OTT applications plus live TV services from OTT providers such as Dish Network’s Sling TV and AT&T’s DirecTV Now.
Xfinity Flex will not support those types of third-party cable alternatives, which could cannibalise Comcast’s traditional cable TV service.
For those Xfinity Flex users opting to go the traditional pay-TV route, Comcast will enable them to upgrade to a full Xfinity digital cable package via Flex’s guide.
Comcast acknowledges that Xfinity Flex will appeal only to a small subset of its customers, which is why the company will engage in highly focused marketing to its internet-centric subscribers.
Reasons behind Comcast pivot to broadband
Comcast’s pivot toward broadband is as much a look toward the future as it is a reflection of today’s marketplace realities.
The carrier remains the largest US cable TV operator with 22 million total video customers.
However, Comcast lost 29,000 pay-TV users during 2018’s fourth quarter, largely due to cord-cutters – customers who drop pay-TV subscriptions in favour of over-the-top (OTT) services.
Conversely, Comcast added 1.4 million broadband customers during the same period, and of Comcast’s 27 million high-speed internet subscribers use their service for viewing OTT services such as Netflix, Hulu, and YouTube.
Growing demand for OTT content is even prompting Comcast’s NBCUniversal business to get into the OTT act, as it plans to launch a free, ad-supported streaming service in 2020’s first quarter.
Comcast is not the only longtime cable operator pivoting toward broadband. The American Cable Association renamed itself last month as America’s Communications Association, and will be known as ACA Connects. The group represents more than 700 small and medium-sized, independent cable companies that provide broadband, phone and video services.
Future of pay TV
Looking ahead, more pay-TV disruption is expected from the cord-nevers, younger people who have never paid for subscription television and don’t intend to start.
These viewers are much more interested in on-demand viewing options that are available over multiple devices.
With the home TV viewing experience that generations of pay-TV customers have enjoyed not deemed desirable by Millennials and Generation Z, the onus is on cable and satellite TV companies to try something else.
That something else for Comcast is currently Xfinity Flex.
The new service should at a minimum help the carrier learn more about what its internet-centric customers want, enabling it to create additional services in the future for a larger segment of broadband customers.