Is Comcast ready to let OTT pass? Hardly, it’s waiting for the right moment

By Jim O'Neill on Jul 27 2016 at 12:30 PM
Is Comcast ready to let OTT pass? Hardly, it’s waiting for the right moment

Despite adding 220,000 broadband customers, seeing huge success with its next-gen, cloud-based video platform, X1, and the continued erosion of its traditional pay-TV audience -- down another 4,000 this quarter – Comcast remains reluctant to commit to an OTT strategy that would allow it to pivot to become a virtual MVPD (VMVPD). But, Chairman and CEO Brian Roberts, in a Q2 earnings call today, didn’t rule the move out.

“We just fundamentally believe, for now, that our in-market footprint strategy is where we add the most value to consumers,” Roberts said. “OTT economics are unproven to us,” he added. “It’s not clear that that’s the right strategy for us.”

Nonetheless, Comcast plans to take an active role in OTT expansion, making sure, for example, it’s in major OTT plays.

“I think the key (to OTT) is going to be making sure that we're in every bundle, and I think we're going to be,” said Steve Burke, CEO of NBCUniversal. “We have more channels and more eyeballs than anyone else and we're pretty much essential to those bundles. And then as they go out, making sure that they're incremental, that they're not cannibalistic, wholly cannibalistic. I believe the vast majority of OTT subscribers will be incremental. We'll be going after people who currently are not part of the ecosystem and therefore will be additive to NBCUniversal and all of Comcast NBCUniversal as well.

Although Comcast is by and large eschewing a major OTT push – at the moment – other major players in the ecosystem plan to be far more aggressive. Dish’s Sling TV should top 1 million users this year for its VMVPD and ATT, now that it’s acquired DirecTV, plans to roll out DirecTV Now and other OTT offerings before the end of the year. Sony, meanwhile, is just starting to see its VMVPD, PlayStation Vue, gain traction in the market now that it’s available on devices other than PlayStation 3 and 4.

Content owners, too, have begun to take a significant more open stance on direct-to-consumer plays as HBO, Showtime, Starz and other high-profile cable networks have seen growing success in SVOD plays.

And, with the NFL gifting Twitter 10 of its NFL Thursday Night Football games for just $10 million, it’s clear that sports, too, sees the value of turning toward OTT in both SVOD and AVOD forms, especially on the mobile side where so many Millennials spend their time.

And, in addition to its ownership stake in Hulu, Comcast also is in the process of bringing Netflix to its X1 boxes, a move Comcast Cable President and CEO Neil Smit saw as an opportunity to put customer service – and stickiness – first.

“What it really came down to was, what’s best for the customer,” Smit said. It also positions Comcast to leverage its X1 platform, and make a bigger push later with its own package of streaming services on X1.

“The X1 platform gives us the opportunity to be an aggregator of aggregators,” Smit said.

So VMVPD? Aggregator of aggregators?

A rose by any other name…

Stay tuned.

Follow me on Twitter @JimONeillMedia and on LinkedIn

Posted in: 

READ THESE NEXT

PPV UFC 214 comes to Sling TV. Will it drive subscriptions?
Live sports, Operators, OTT, Cloud TV
PPV UFC 214 comes to Sling TV. Will it drive subscriptions?
Jul 26 2017 9:30 AM

Sling TV is planning to offer its first-ever pay-per-view (PPV) event, the much anticipated UFC grudge match that features a pair of light heavyweights. UFC 214: Cormier v. Jones 2 features current champ Daniel Cormier against ex-champ Jon Jones who last met in 2015 at UFC 182.

SVOD, Operators, Netflix
Should European operators worry about cord cutting as Amazon, Netflix push deeper into their market? Absolutely
May 25 2017 8:15 AM

When the Big Two come to play in your backyard, it’s time to up your game.

Netflix and Amazon have launched a push into Europe that will likely result in some bad nights of sleep for operators, pay-TV channels and broadcasters looking themselves to do more business over the top.

Cable operators in EU see revenue gains, subscriber losses
EMEA, Broadband, Operators
Cable operators in EU see revenue gains, subscriber losses
Dec 19 2016 12:15 PM

Despite increasing competition from over-the-top players and from satellite providers, and declining subscriber numbers, the cable industry in the European Union has continued to grow with gross cable revenues topping €22.4 billion ($23.34 billion) in 2015, a 5.7% increase year-over-year.

More than half of cable revenues in 2015 (53%) came from Internet and phone services, according to a report from IHS Markit, with Internet revenues up nearly 10% to €7.2 billion.

Operators, Cord Cutting
In the U.S., service providers face triple cord-cutting threat
Dec 15 2016 11:30 AM

U.S. operators – especially telcos – are facing a triple cord-cutting threat as subscribers are dropping their landlines, traditional pay-TV subscriptions and, increasingly, broadband plans, as consumers look to mobile as their one-source supplier.

Researcher Ovum’s World Broadband Information Service says the trend is “looming” over U.S. operators, but adds that other regions also are potentially facing disruption on all three fronts.