-Will Open Up STB to more OTT Apps
-Launching Original Series for ‘Watchable’ Web Video Service
Comcast, one of the US’ largest pay TV providers and the cable industry’s darling, is pivoting towards a new role in its transition to Internet TV. Comcast knows that its best strategy moving forward is to innovate to keep up with the new generation of OTT-centric video services. Comcast also knows the future of traditional pay TV – meaning high priced packages, two year contracts and linear TV feeds – is murky, while the flexible, on demand and any device type OTT video services have gained favor among the masses. And Comcast knows its biggest asset moving forward is its broadband network, upon which some 24 million consumers rely to receive new entertainment options instead of watching pay TV. Recognizing the shifts in the trade winds, Comcast seems finally ready to embrace the Internet TV future it sees for itself.
Comcast Hints at Future as Video Aggregator on a ‘Dumb Pipe’
This week, a Comcast executive said the company is planning to support more OTT apps on its cloud-based X1 platform and pay TV set-top boxes sometime in the future. That startling admission comes months after Comcast shocked us by announcing it would finally offer Netflix apps on its pay TV set-top boxes (STB). The fact that Comcast and Netflix were able to reach a deal after the publically antagonistic comments the two companies have made towards one another indicates among other things that Comcast executives have dramatically – if not quietly – shifted their thinking and strategies about the future of home entertainment services.
Comcast Cable’s EVP of consumer services Marcien Jenckes made comments at the recent Nomura Media, Telecom & Internet conference that hint the company is considering expanding access to OTT services that travel on its broadband network into viewers’ homes. Jenckes said:
“I think there’s only one Netflix at the moment. But there are other companies that are aggregating content that our customers want access to and there’s no reason why over time we wouldn’t figure out ways to include them in the experience as well…Our view is that if you can create an aggregated experience that presents to a customer all the content that they want to consume no matter what the source is -— if it’s current season content based on one of our programmer deals, or if it’s prior season content either that we license directly or that somebody like Netflix licenses — and we are able to showcase within our experience, the unification of that is very powerful.”
Those comments underscore the growing cloudiness about the future role traditional pay TV providers will play in the Internet TV world. As consumers access more video online and over the top, pay TV services are suffering bouts of cord cutting, cord shaving, and churn. The US pay TV industry just suffered its worse Q2 ever, losing 665,000 pay TV subs.
The only cords consumers aren’t getting rid of is their broadband cords. Comcast now has more broadband subscribers than pay TV subscribers. In Q2, Comcast added 220,000 broadband subs to reach 23.9 million; by comparison, it lost 4,000 pay TV subs to reach 22.3 million. By the way, that 4,000 lost figure is one of the best Q2’s the company has had in recent years, and made Comcast the bright spot in a field of much larger subscriber losses. It’s amid this slow contraction of the US pay TV industry that Jenckes’ comments are truly notable: it’s a tacit recognition that while the traditional pay TV business is no longer a growth business, the broadband business is and will continue to be for the foreseeable future. And the future of the set-top box? If we’re to believe Jenckes’ comments, it’ll start looking more like a net-top box.
Comcast Joins Verizon, AT&T in Funding Web-Exclusive Content
Comcast is expanding its role as Web video enabler in other ways. This week, its Web video “channel” Watchable announced new exclusive video series that’ll appear on the app. Watchable, our readers will remember, is the online video portal Comcast launched last year. It’s available as a free, ad-supported OTT service for anyone to access on laptops or via an app on iOS or Android devices, but on the Comcast Xfinity platform, the service acts something like a Web video channel within the pay TV interface. Viewers are able to watch curated video feeds on the big screen in a TV-like lean back experience.
Though Watchable started as an experiment in putting Web video on the TV set to keep viewers engaged with the pay TV STB, it’s clear Comcast is ready to flesh out the monster with new exclusive series from some of the bigger digital networks and studios. “Over the last year, the trends that compelled us to introduce Watchable have accelerated,” said Jamie Gillingham, Comcast’s VP of strategic development in TV, in a blogpost. “Digital native video is hotter than ever. In fact, Watchable mobile traffic is increasing 40% month over month, and TV viewers are proving to be incredibly engaged – with session times averaging over 30 minutes.”
When Comcast launched the OTT service last year, it said, “The web has changed the way we all think about video.” It’s looking like that wasn’t just marketing fluff. Comcast is incorporating Web video into other areas of the X1 platform. For the Rio Olympics, Comcast created an entire Web channel and interface for its special event coverage on its X1 platform. It pulled short-form video about teams, athletes and events from the Web and stitched that video in with its traditional TV offerings and additional live streaming options, on the X1 platform.
“For the first time, we have built a destination that will combine live television, online streaming and on demand content, athlete profiles and up-to-the-minute stats in one integrated NBC Olympics dashboard. And it’s all searchable,” Comcast chairman and CEO Brian Roberts said during the company’s last quarterly earnings call. At INTX earlier this year, Roberts described Comcast’s Olympics Web coverage “a real look into the future of television.”
Pay TV providers Dish Network, AT&T and Verizon are all walking down similar paths towards the Internet TV future: Dish Network launched Sling TV, a streaming pay TV service that now has over 700,000 subs and a variety of low-priced content tiers; AT&T has promised to launch three of its own streaming pay TV tiers sometime in the future, and has a few fingers in Web video pies via its Web-centric joint venture Otter Media and online video network Ellation; and Verizon has been busy acquiring new and exclusive original Web programming for its mobile-centric OTT service, Go90.
Comcast is dabbling in a number of approaches…
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