Comcast's Flex platform driving ARPU of $2/month as deployments reach 3.5M devices

Comcast's deployment of Flex, its 4K-capable streaming platform for broadband-only customers, has exceeded 3.5 million devices, cable unit president and CEO Dave Watson said today at MoffettNathanson's 8th Annual Media & Communications Summit.

Comcast, which reported crossing the 3 million Flex box deployment mark in March, has been using Flex largely as a free add-on to reduce churn. Watson said Flex deployments have led to a 15-20% reduction in broadband churn.

Figure 1: Comcast offers Flex, a 4K streaming device that's paired with a voice remote, for free to broadband-only customers.

But Flex is also starting to emerge as a driver of additive revenues. Watson said Flex is currently generating an average revenue per unit (ARPU) of about $2 per active user. That revenue today is originating from services such as pay-per-view and video-on-demand along with app revenue sharing. Flex ARPU currently does not account for any advertising capability, but advertising is expected to be "additive" to that Flex ARPU over time, he said.

Watson also dropped a few more hints about Comcast's exploration of deploying and marketing Flex outside the cable operator's own footprint. It's already expanding the reach of Flex through tech syndication deals with Cox Communications, Videotron, Rogers Communications and Shaw Communications, but could eventually extend the Flex platform to the retail streaming marketplace and in smart TVs.

"It's potentially all of the above," Watson said with respect to the various current and potential opportunities to broaden the reach of the Flex platform.

Flex is currently offered on a small streaming device, but it could be installed on other devices, such as smart TVs. Comcast reportedly has held talks with Walmart about a smart TV deal that involves the cable operator's software stack/platform.

"Over time, it's essentially a software solution," Watson said of Flex, noting that Comcast is already conducting some tests and talking to potential partners about the idea. "It's absolutely doable to figure out how to get an advanced software stack into a smart TV ... We'll take a look at how things evolve, but we want to be in position if that is a great opportunity to do it ourselves [or] with other partners."

Comcast testing wireless offload

Comcast and Charter Communications teamed up to potentially bid on C-band spectrum but did not win any spectrum in that auction.

Watson said Comcast wanted to be in position to see how the C-band auction evolved, but ultimately figured the operator was already in a "strong position" with 600MHz and 3.5GHz CBRS spectrum holdings that could be used to offload mobile traffic and offset some of its MVNO costs.

"We have what we need to go after offload capabilities in these high usage, very dense mobile areas where we can offload traffic with the spectrum holdings that we have," he said.

Watson said Comcast is currently testing how to use its spectrum for wireless offload and expects to broaden those trials by the end of this year into 2022. He also noted that Comcast and Charter, which already have a joint venture focused on mobile backend systems, are likewise doing some work on how to utilize their respective spectrum holdings for traffic offload.

"We have good alignment with Charter working in tandem in terms of how to do that," he said.

On the road to DOCSIS 4.0

Comcast has conducted trials of DOCSIS 4.0 technology in the lab, but it thinks it's still in good position with a DOCSIS 3.1 network that, today, is delivering up to 1.2 Gbit/s in the downstream.

DOCSIS 4.0 "gives us a great option down the road," Watson said, noting that deployment of the technology is likely several years out. "Multi-gig is critical ... We'll be in position to deploy it when we need it."

Last month, Comcast announced that a recent lab test of Full Duplex (FDX) and DOCSIS 4.0 technologies delivered symmetrical speeds of more than 4 Gbit/s. DOCSIS 4.0, which requires changes to the hybrid fiber/coax (HFC) network, is targeting speeds of up to 10 Gbit/s down and 6 Gbit/s in the upstream.

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— Jeff Baumgartner, Senior Editor, Light Reading