Xfinity Flex Is Comcast’s Attempt to Convert Broadband Customers to Bundled Customers

The United States cable operator Comcast launched Xfinity Flex, a new streaming TV device named Xfinity Flex in March 2019. Xfinity Flex supports 4K HDR streaming and voice remote control. With a monthly fee of US$5, users can access more than 10,000 free movies and TV shows including live TV from ESPN2, Xumo, Pluto TV, Tubi TV, and more. Comcast is targeting its broadband-only customers to enable them to access affordable video streaming options without requiring Comcast’s pay TV service. Comcast has integrated third-party streaming services such as Netflix and Amazon Prime to its X1 pay TV platform to further entice users, but has recognized another revenue path among its broadband only subscriber base. Xfinity Flex users will not be able to access channels in the pay TV bundle, but it does allow users to rent their favorite shows and movies.

Comcast is the largest cable TV operator in the United States with roughly 18 million customers as of Q4 2021. It has been facing fierce competition by Over-the-Top (OTT) services, resulting in a loss of 4 million subscribers since 2018. It offers an Infinity streaming service to its customers, but it seems that Comcast needs a better strategy to improve churn. With the launch of Xfinity Flex, Comcast is hoping to take advantage of its strong broadband service presence in the United States. It has more than 25 million high speed internet customers. Comcast did not report an exact number of internet-only subscribers. However, considering the 9 million customers who only use one Comcast product, the number of internet-only subscribers should be sizeable.

According to Comcast, Xfinity Flex customers will soon be able to upgrade to full Xfinity X1 cable service using the same streaming box. Comcast’s internet-only package is priced US$30 per month for 60 Mbps speed, while a double play option with 100 Mbps broadband speed and more than 10 pay TV channels costs US$40 per month. Based on Comcast’s pricing, US$5 per month for Xfinity Flex relative low for its broadband customers to try the service. Comcast might be able to attract some of its broadband customers using the Xfinity Flex streaming service, however, it should be noted that many households have more than one video streaming service with an estimated 180 million OTT video subscriptions in the country. High OTT penetration in the country might create a challenge for Comcast to maintain a strong customer base on Xfinity Flex. It might be even harder to get Xfinity Flex customers to switch or upgrade to full Xfinity X1 as today’s video subscribers are not willing to pay for high cable TV fee since Comcast’s Xfinity TV packages range between US$30 and US$85.

Consumers have plenty of video streaming options available in the markets. International players such as Netflix and Amazon Prime are available in several markets. Major media companies such as Disney are also planning to offer direct-to-consumer streaming services in 2019. There are many more regional and local service providers providing video streaming services in different markets as well. In addition to on-demand streaming, Sling TV and DirecTV in the United States, Sky in Europe, and PCCW in Asia-Pacific are providing live-streaming services too.  In such a market, adding an OTT option onto the pay TV platform is not enough to attract consumers. Service providers need to be able to offer differentiated features in their OTT service. Just another Netflix type of service is no longer what consumers are looking for. Rather, consumers are looking for quality in the service in terms of content, technical features, value to money, etc. As OTT video services provide flexible subscriptions to subscribe or terminate any time without long term contracts, consumers now have the power to try multiple services.

Content is the key when consumers select a video service. Service providers need to have a strong understanding of the content demand in the market. Creation of high-quality original content creates a good tie to customers. In some markets, local content with different language options is required. In markets like Latin America and Asia-Pacific, for example, consumers often select their service based on local content availability.

In addition to quality of content, providing excellent User Experience (UX) is essential for the long term success of video streaming services. Service providers need to support multiple devices to reach wide user bases. Supporting user friendly User Interfaces (UIs), highly personalized features, and efficient and accurate content recommendation systems is important. A number of OTT users feel it is hard to get the content they need from video streaming services. Deploying Artificial Intelligence (AI) and machine learning solutions can provide service providers with effective business insights which is helpful to improve user experience and business performance. There have been many cases where AI and machine learning have helped service providers boost revenue; recently, Kudelski Group stated its analytics solution NAGRA Insight helps its customers save 20% in content cost by providing insights on content consumption from its catalogue. The company claims that data analytics using AI and machine learning can help its customers boost 30% profitability by optimizing the services based on analytics outcomes.

Integrating features such as cloud DVR and smart home features such as voice assisted control of other multi-media devices and streaming boxes are also options to provide better user experience. Finally, service providers need to invest in the deployment of anti-piracy solutions. Content piracy is a growing threat in the industry as pirates use various illegal activities such as password sharing and illegal streaming websites to access or redistribute content. AI and machine learning based anti-piracy solutions are there to protect content and subscriber identity. The development of best-in-class content, innovative features, and content security will help service providers maintain long-term success in both OTT and the broader video space.