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Comcast Projects 150,000 Video Sub Loss in Q3

7 Sep, 2017 By: Erik Gruenwedel

Cable operator eying nationwide launch of ‘Instant TV’ by end of the month

After adding more than 160,000 video subscribers in 2016, Comcast Cable expects to lose nearly as many in the current third quarter, according to Matthew Strauss, EVP of Xfinity Services for Comcast Cable.

Speaking Sept. 7 at the Bank of America Merrill Lynch media, communications & entertainment confab in Los Angeles, Strauss cited increased competition from third-party over-the-top video (i.e. DirecTV Now, Sling TV and PlayStation Vue) services and the impact of Hurricane Harvey in Texas as contributory factors.

At the same time, Strauss said the cable operator had redoubled scrutiny on household economics (i.e. unprofitable video subs), growing positive cash flow and average-revenue-per-user (ARPU) to offset video sub losses.

“While we'll have a loss on video subs, we'll actually have an increase in total customer relationships in the neighborhood of 100,000 for the quarter,” he said, referring largely to broadband customers.

Comcast’s cloud-based X1 set-top (which includes direct access to Netflix and YouTube, in addition to on-demand movies and TV shows) represents more than 55% of the company’s nationwide video sub footprint.

“X1 is a killer product, and it's resonating and there are new products that we will be launching in the market that I think will allow us to be very targeted toward certain segments,” Strauss said.

Meanwhile, Comcast — which has heretofore eschewed OTT in favor of enhancing the pay-TV model — is currently testing an OTT video service called “Instant TV” in Boston and Chicago. The $20 service — accessed via the Xfinity app and featuring a skinny bundle of broadcast content, VOD and 20-hour DVR — plans to go nationwide by the end of the month, according to Strauss.

He said the service — which limits available user streams per household — is targeting millennials and non-subscribers, while avoiding existing Comcast pay-TV households.

“We've built in, we think, an economical way to go after [those market segments] and ultimately create that relationship on the video side that we then hope to upgrade overtime ultimately to X1,” Strauss said.

When asked if Comcast would include Disney’s pending branded OTT video service in X1, Strauss said the company is receptive.

“It will ultimately come down to what is the value of those OTT offerings versus what we currently distribute today and how do the economics of those things ultimately work,” he said.

About the Author: Erik Gruenwedel

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