Comcast has been busting a gut to end its unenviable reputation as the biggest US loser from cord cutting. It peaked at just over 25.1 million pay TV subs back in October 2008 and has shed them every single quarter since to stand at 21.9 million by the end of March 2013.
There were various reasons for this churn, such as the rise of Netflix appealing to a broad constituency, including younger viewers and those that never had a pay TV subscription, with its offering of TV shows and movies complementing Free to Air sources. While Comcast could not nobble the competition it could do something about a self-inflicted wound, the need for logging on to access content over the Internet even inside the home, despite the existence of an authenticated set top box.
Comcast will have noted surveys such as TV Everywhere 2012: A How People Use Media Report from research firm GfK, finding that authentication procedures requiring users to provide a username and password to gain access to multiscreen services were substantial deterrents. Seven out of ten users said they were at least somewhat deterred from using multiscreen if they needed to provide authentication, and 25% said they would be deterred ‘a lot’. Older respondents from 50 to 64 were especially likely to say that authentication would put them off multiscreen completely. The upshot was that four times as many subscribers accessed content on broadcasters’ catch up portals than pay TV operator sites despite the latter having more premium content available and being free once the sub had been paid.
Comcast started remedying this in 2012 with steps to avoid repeated logons without weakening content protection. The first move was launch of Facebook Connect so that customers could link their Comcast.net account to their Facebook account for simpler sign-in. At the same time came secondary email identification and rolling ‘remember me’, so that customers could stay signed on to a designated computer for 30 days after the initial authentication.
But the most important development was the recently announced Home Pass for Comcast’s Xfinity TV and Internet customers. This allows them to access the Xfinity.com/TV website from an Internet connected device within the home and be automatically logged on. This gives them access to Comcast’s library of over 285,000 video items, including on demand and live streaming TV content.
This was first trialed during the London Olympics so it has taken a year for final launch preparation, which means that all the technical glitches HomePass has suffered from are all the less excusable. These will be ironed out and then the real test will come to see if it combats churn. The added convenience will undoubtedly help retain people on the platform, but it is far less clear whether it will help Comcast go out and actively recruit new customers or regain those that have recently churned. The problem of high subs cost still remains and the convenience of HomePass is unlikely to persuade people to part with $60 to $100 or more a month when they can get most of what they want from an online free to air service coupled with a much lower priced OTT sub, under $10 a month.