NBC Universal CEO: We Have 'Healthy Degree of Skepticism' About OTT Video Sub Growth26 Oct, 2016 By: Erik Gruenwedel
On the heels of AT&T’s $85 billion acquisition of Time Warner, Comcast senior management declined to opine on the deal -- notably pending DirecTV Now, per corporate policy.
But that didn’t stop Steve Burke, CEO of NBC Universal, from continuing his ongoing reproach toward over-the-top video as replacement for linear pay-TV.
Specifically, Burke agreed it would be a positive for content creators (such as NBC Universal) if online TV services such as Dish Network’s Sling TV, Charter’s Spectrum TV Plus, Sony’s PlayStation Vue and pending DirecTV Now and Hulu Live indeed capture incremental segments of the mythical 20 million domestic households without pay-TV.
But the executive contends the pay-TV ecosystem remains a better consumer value, and that upstart online TV platforms have “all sorts of issues” to deal with, including content cost and service.
Indeed, analyst firm MoffettNathanson says the pending $35 DirecTV Now online service would syphon away about 2 million DirecTV satellite subs, 3 million rival pay-TV subs, and 6 million cord-cutters — while operating at a fiscal loss.
“I think we all have a healthy degree of skepticism that these new over-the-top entrants are going to create millions and millions and millions of subscribers any time soon,” Burke said on an Oct. 26 fiscal call.
Meanwhile, Comcast Cable added 32,000 video subscribers in the third-quarter (ended Sept. 30), compared with a loss of 48,000 subs in the previous-year quarter. The cabler has added 170,000 video customers in the past 12 months.
Comcast added 948,000 net new and existing customers, with nearly 45% of residential video customers now having the Xfinity X1 set-top box — a “cord-connecting” device featuring proprietary and third-party apps (i.e. Netflix) in an effort retain subs.
Notably, Comcast said about 50% of its mobile video subs are using TV Everywhere, which is up from 30% last year. And they view about 10 hours of content monthly.
“We're really getting good traction in that area,” said Neil Smit, CEO of Comcast Cable.