For several years, Comcast billed its X1 platform as a mitigator of an inevitable cord-cutting trend, a salve that didn’t necessarily eliminate churn, but limited its impact.
But faced with resurgent linear video attrition in the third quarter—Comcast lost 238,000 Xfinity TV users during Q3 vs. 106,000 in the year-ago quarter—Comcast seems done beating the drum of X1 as a churn buster.
The focus now seems to be on Xfinity Flex, the X1-derived IP client device offered free to broadband-only users that lets them stream Netflix, Amazon Prime, and soon, Hulu. With Comcast adding 379,000 broadband users in Q3, X1’s best features—including voice control—are now seemingly being leveraged to advance the broadband-first agenda that has taken hold of the cable business over the last several years.
Nobody’s talking about saving, at least a portion, of the linear video business anymore.
“What we are delivering to our customers is just a great streaming experience with Flex, and it's completely integrated. The content is available through the voice remote, just like X1,” Dave Watson told investment analysts during Comcast’s Q3 earnings call last month.
Certainly, the Flex model is proliferating.
Privately held Cox Communications now licenses Flex technology, along with patents from the broader X1 ecosystem, and is marketing a product it calls Contour Stream to its broadband customers.
Charter Communications, which lost 75,000 linear video subscribers in Q3, an uptick over the 54,000 lost in the third quarter of 2018, might license Flex, too.
“We have discussed that with Comcast and it's an interesting idea, and so I would say that, we are considering it and it has advantages,” Charter Chairman and CEO Tom Rutledge said during last month’s Q3 call. “We have a significant number of app based relationships that we've developed on multiple devices, and that strategy is working for us. And but putting inexpensive devices out with your service makes some sense to us.”
Meanwhile, WideOpenWest CEO Teresa Elder didn’t specifically reference Flex during WOW’s third-quarter earnings call earlier this month. But she did talk about a paradigm in which access to IP-delivered video drives usage rates of higher-speed broadband.
“We were the first operator to have 1 gig services in over 95% of our footprint. And we had, very early days, established a different relationship with Netflix to put the content closer to the customers so that we routinely are in the top rankings of Netflix ISP viewership,” Elder said.
Englewood, Colorado-based midsized operator WOW grew broadband revenue by 9.4% to $11.2 million in Q3, as its strategy of “edging out” its footprint drove an increase of 7,900 high-speed internet users for the quarter.
WOW’s video business, however, lost another 6,300 customers, dropping linear TV revenue by 10.8% to $12.9 million. Overall, WOW revenue dropped 2.1% to $285.4 million, largely on the sustained collapse of linear video.
Elder, however, wasn’t talking about ways to stop churn for traditional TV.
“We feel very good about our ability to provide streaming services and we believe customers come to us specifically for that,” she added.
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