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Flex is Comcast’s greatest embrace of OTT video to date

Blink and you’ll miss it. Following Comcast’s cryptic X1 broadband convergence comments from a fortnight ago, the company unveiled its new Xfinity Flex video aggregation service moments after Faultline Online Reporter went to press last week – in the latest ambitious initiative from the US cable giant as it aims to offset the torrent of pay TV losses.

While some 10,000 movies and TV shows will be available OTT free of charge, Flex is really about introducing cord nevers to the world of cable TV – providing Xfinity internet-only subscribers with a portal for upgrading to the full Xfinity X1 cable service directly from the Flex UI. This will be accessed via an HDMI streaming dongle with Comcast’s trademark X1 voice remote, hoping to lure users towards an upgrade through offering a cloud DVR, tens of thousands of additional VoD titles and hundreds of live channels, but without any installation fees or a clunky cable TV set top. Presumably these streaming sticks will be the same Roku devices which Sky in Europe has shipped to access its Now TV streaming service.

The similarities between this announcement and the recent OTT-only launch from Comcast-owned Sky in Austria are striking – although Sky has gone one step further by delivering a full pay TV package over broadband via an app available on various devices. But still, the move is arguably Comcast’s most brazen acceptance of the cord cutting phenomenon threating its core business – with Flex surely destined to exacerbate subscriber losses as a portion of its cable TV footprint will certainly be peeved.

We said Comcast had made hints at becoming an aggregator of TV in the broadband segment much like T-Mobile US is trying to do in the mobile market, and it turns out Faultline Online Reporter was bang on the money. It has already integrated major OTT services like Netflix, YouTube and most recently Amazon Prime Video, available in 4K HDR with voice remote integration.

Flex will cost $5 a month and with no upfront price mentioned in the press release, it seems Xfinity internet-only subscribers can receive the 4K HDR Flex streaming dongle free of charge.

Comcast added 351,000 high-speed internet subscribers in Q4 2018 to total almost 26 million, while video subscriber losses reached 29,000 making it 370,000 for the year, dropping to 22.36 million. However, Comcast does not break out how many of the 26 million are internet-only and how many also take cable TV services, so an exact market cannot be quantified. We do know Comcast ended 2018 with 9 million single-product residential subscribers, of which we believe the majority are internet subscribers – so a sizable base for which Comcast sees a decent ARPU inflation opportunity.

In addition, Flex users will be able to access programming from apps including Netflix, Amazon Prime Video, HBO, and Showtime, and can rent and purchase movies and shows from the digital store, access their digital lockers across platforms by pairing their account with Movies Anywhere, or listen to music from Pandora, iHeartRadio, and XITE. Xfinity Flex can also become part of the smart home ecosystem, linking up to camera feeds and to other home security devices, for example.

Comments made recently by Comcast Cable CEO Dave Watson implied that X1 was preparing to break out of the hybrid set top ecosystem in order to bring the platform into more broadband-focused segments. “For the right segments, video becomes a great complement to broadband. Broadband is the foundation of which we start the relationship. Video can be a great supporting part of that package,” said Watson a few weeks ago, speaking at Deutsche Bank conference.

Meanwhile, the newly launched Sky app, called Sky X, is set to make quite a splash, landing on mobile devices, Samsung and LG smart TVs, PCs, and PlayStation 4 consoles. A dedicated Sky X streaming device is also a purchasable option, which looks almost identical to the Sky Q Mini set top, a hybrid device built by the in-house operation listed as BSkyB, but which was once Amstrad.

It boasts a full fat Sky line up with live channels including its trademark sports content, plus on-demand series and movies, and a host of popular broadcast channels from the likes of Disney, Discovery and NBCUniversal.

Matt Strauss, EVP of Xfinity Services for Comcast Cable, said, “For just five dollars a month, we can offer these customers an affordable, flexible, and differentiated platform that includes thousands of free movies and shows for online streaming, an integrated guide for accessing their favorite apps and connected home devices, and the ease of navigating and managing all of it with our voice remote.”

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