March 3, 2021
Comcast has deployed more than 3 million Flex boxes as of last week, a milestone that comes as the cable operator continues ramping up the reach of a streaming/smart home platform focused on its growing base of broadband-only customers.
In addition to reducing churn up to 20% among broadband customers who engage with Flex, the platform represents "the new television," Brian Roberts, Comcast's chairman and CEO, said today at Morgan Stanley's virtual Technology, Media & Telecom Conference. "It's also a platform for future relationships and opportunity in R&D."
Figure 1: The Flex box and voice remote.
(Image source: Comcast)
The Flex deployment figure is the first shared by Comcast since it announced in May 2020 that it had deployed more than 1 million Flex devices. Comcast began to offer Flex for no added cost to standalone broadband customers in the fall of 2019. Comcast ended 2020 with 12.43 million one-product customers, but does not break out how many within that total take broadband or pay-TV as the standalone service.
The ramp-up of Flex comes as Comcast identifies streaming and content aggregation as two of the three "core tenets" of the company's long-term business (the third being broadband). The new deployment figure also arises as Comcast explores ways to expand Flex beyond its cable borders and integrate its broader X1 platform on smart TVs globally.
Flex today integrates several popular streaming services, including Netflix, Hulu (SVoD only), HBO Max, NBCU's Peacock, CBS All Access (becoming Paramount+ on March 4), Spotify and Amazon Prime, among others. Comcast recently added an option that enables Flex customers to add the cable op's pay-TV service.
Roberts hinted that Comcast will make additional streaming aggregation-related announcements for Flex this year along with a promised "drum beat of new initiatives" across Comcast's three categories of streaming, aggregation and broadband.
Sticking with streaming, Roberts also talked up the value of Comcast's one-third ownership of Hulu. Comcast has the option to sell that stake as early as 2024.
While the value of that stake might not be reflected in Comcast's stock today, "the opportunity to get a lot of cash from Hulu is coming our way," Roberts said.
The deal also gives Comcast flexibility for licensing Hulu content for NBCUniversal and its new Peacock streaming service.
"We're looking at streaming and [asking], do we have the piece parts? And I think we do," Roberts said. He noted that the content piece will come from a blend of licensing agreements, originals and rights for sporting events such as the Olympics.
There's a "long road ahead," but Roberts said he's confident the company has the resources and will "to make Peacock one of the must-have streaming services and evolve as the market evolves."
Peacock, which launched nationally on July 15, 2020, has about 33 million signups, but has not broken out how many are taking the service's two paid, premium tiers, or its free, ad-supported tier. Roberts said Peacock signups are 50% greater than anticipated at this stage and that advertising targets and ad commitments for the streaming service have so far exceeded expectations.
Hints of new mobile action
Roberts also hinted that Xfinity Mobile, a service that relies on a recently revamped MVNO deal with Verizon, will introduce new packaging and pricing options in "several weeks."
Xfinity Mobile, available only to Comcast's broadband customers, produces a 20 basis point reduction in churn. That's effectively the kind of levels that the cable operator saw in the early days of its original triple-play (video, voice and broadband) bundle, he said.
Roberts also expects Comcast, which recently won some licensed CBRS capacity at auction, to use some of its spectrum to offload traffic in high-usage areas. "I think we have a path to do that," he said.
— Jeff Baumgartner, Senior Editor, Light Reading
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