Comcast has deployed about 1 million "Xfinity Flex" devices in its cable footprint and is exploring new ways to monetize the platform beyond its use as a tool to gain and retain broadband customers, Dave Watson, the CEO of Comcast's cable unit, said Monday.

That deployment milestone comes about eight months after Comcast began to offer Flex, a video streaming/smart home service, for free to broadband-only customers. Comcast then launched Flex, a service that runs on the company's underlying X1 infrastructure, in March for an additional $5 per month.

Figure 1: Flex takes advantage of Comcast's voice remote to navigate streaming services and apps and its 'xFi' home network management platform along with an option to upgrade to the cable op's full X1 pay-TV service.

"We're pleased with the early stage results of Flex," Watson said at the MoffettNathanson Media & Communications Summit, noting that Comcast is now starting to focus on ways to increase monthly active users on the platform.

Flex's strategy centers on Comcast's broadband service and its ability to improve broadband churn, But Watson said Comcast is also exploring other ways to get more value out of Flex and have it become "more material" to the company's broader business.

"I think there is a longer term opportunity in how we monetize things between advanced advertising capability [and] participation in app revenue," he said.

Update: As Comcast reaches that milestone, there's certainly much more upside for Comcast to pursue with Flex. The cable op ended Q1 2020 with 26.88 million broadband customers, but doesn't break out how many are of the broadband-only variety. However, Comcast reported having 10.80 million one-product customers at the end of the period.

Comcast is coming off a second quarter in which it added 466,000 residential broadband customers while losing 409,000 video subs.

In the broadband category, April got off to good start and that trend has continued into May, Watson said. Almost 100% of new broadband customers are being connected through a self-install program in which Comcast ships the product directly or drops of a kit at the customer's door and has a technician remain nearby to help the customer via the phone or through video chat.

"I think in this moment, we can take [broadband] share across the board," whether it's from the remaining base of DSL customers, consumers on lower-end telco speed tiers or consumers who have never taken broadband service, Watson said, noting that about 85% of Comcast's customers take speeds of 100 Mbit/s or more.

He said growth in Flex adoption is also helping to counteract pay-TV losses. Flex additions are "netting out our video losses" over the past couple of months, Watson said. "It's an almost net-zero impact."

Notably, Flex, which does support a variety of subscription and ad-supported streaming apps, including Netflix, Hulu and NBCU's new Peacock service, also enables users to upgrade to the full X1 pay-TV service.

The pandemic has had a negative effect on Comcast's commercial services division, particularly among small and midsized businesses that have needed to temporarily halt service while they suspend operations. But Comcast, which has diversified in the category by serving mid-sized and enterprise-level customers, still expects the overall business services segment to grow in the "low single digits," Watson said.

Conversations with mobile carriers, including AT&T
On the mobile side, Comcast remains happy with its MVNO relationship with Verizon, but is keeping its options open as it receives inquiries from other carriers.

"Over time, all of them have reached out one way or the other and want to talk, including AT&T," Watson said. "We know there are a couple of opportunities to improve things just a little bit with our ability to continue long term [and] add to an already good MVNO."

He was also asked if he can imagine a day when Comcast's wireless business is bigger than its video business.

"Hard to say at this point," Watson responded. "There's strategic implications for both, but we really like how we're growing wireless. I think wireless gives us a long-term, great economic roadmap [that] certainly is helping broadband, which is one of the main reasons we did it in the first place."

Comcast added 216,000 lines for Xfinity Mobile in Q1 2020, ending the period with 2.26 million lines. Comcast, which pulled down about $343 million in wireless revenues in Q1, is still hopeful that this piece of the business can enter the black in 2021, though it could take a bit longer because of the pandemic.

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— Jeff Baumgartner, Senior Editor, Light Reading