Comcast has entered the hyper-competitive electronic sellthrough (EST) market with the debut of the Xfinity TV Store, a new service offering the direct sale of movies and TV shows via the Web and set-top boxes.
Although Comcast enters that market with a built-in base of about 21.6 million video subscribers and more than 20.2 million broadband customers in tow, it will be playing from behind. Way behind.
In 2012, Apple’s iTunes Store was by far the dominant player in EST video, representing 65% of the movie market, and 67% of the market for TV shows, according to The NPD Group. For the period of June through August of this year, the iTunes share of the EST movies market was a still-commanding 61%, followed by Amazon Instant Video (15%), the Sony PlayStation Store (7%), Vudu and Xbox Video (4% each) and Google Play (3%). The EST market also includes the recently launched M-GO and Target Ticket services.
FIRST MSO IN EST
Comcast is the first incumbent U.S. cable operator to launch an EST service. Verizon Communications’s FiOS TV platform has been in the game since 2010 with Flex View, an EST and video-on-demand multiscreen service that now touts a for-sale library of more than 10,000 movies and north of 30,000 TV shows, according to the company.
Comcast’s Xfinity TV Store offered a much smaller library as of Nov. 22 — at least 170 movies and just seven TV series (BatesMotel, Chicago Fire, Covert Affairs, Grimm, Hannibal, Mad Men and Suits) — but expects to expand that total rapidly.
In the early going, Comcast allows customers to buy movies and TV shows via the set-top box and its Webbased store (www.xfinity.com/store). The operator has also launched the Xfinity On Demand Purchases app for iOS and Android devices that plays back purchased titles, but does not yet enable in-app purchases.
Customers are allowed to stream purchased titles on up to three devices, such as computers, mobile phones or tablets, at any given time, according to Comcast. Up to three diff erent devices can be registered to a customer’s account to download purchased movies for playback while on the go.
Although Comcast won’t overtake any of the existing EST video players anytime soon, Verizon’s work in the market shows that pay TV operators can build some tangible financial benefits with just a small fraction of the market.
FLEX VIEW LESSONS
Verizon has seen the average EST revenue per FiOS TV customer quadruple since the company first launched the product in 2011, spokesman Bill Kula said. “From our research, FiOS customers who use Flex View on demand are three times less likely to churn than customers who do not use the service,” he said.
The tel co had about 1% of the EST movie market on a national basis, according to NPD Group EST data from June through August of this year, the first report from the researcher to include Flex View data (at Verizon’s request). It had a 6% share in the FiOS TV footprint, but not among FiOS customers, Kula said. “Assuming an average 35% market share, the 6% translates to a 17% market share among FiOS TV customers,” he added.
Kula said Verizon’s biggest EST growth spurt occurred in the second half of last year, when studios began to support windows that made titles available for electronic sale before they were available for rent or purchase on DVD or Blu-ray. Comcast’s new store will also benefit from the earlier EST window.
Comcast has become the latest entrant in the crowded online TV and movie market with the opening of its Xfinity TV Store.
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