The Skinny on Comcast's Skinny Bundle
Sources close to Comcast have confirmed a report by Reuters that the cable company will launch a skinny bundle service in new markets in the third quarter of this year. The service, originally called Stream in early deployments before expected further rollouts were delayed, will be rebranded as Xfinity Instant TV and will come with a host of features and add-on options not available in earlier product iterations. Pricing will start at $15 per month and rise to roughly $40 per month depending on how subscribers customize the offering.
Features include a cloud DVR, access to Instant TV on connected television sets, and the option to add premium content tiers to any baseline package.
Comcast Corp. (Nasdaq: CMCSA, CMCSK) has always positioned skinny bundle services as a way to target Internet-only customers who otherwise wouldn't sign up for cable television. The goal is to add subscribers, but also to give consumers an upgrade path if they want to start with a skinny bundle and then move to something more expensive. Comcast has said previously that one third of the customers for its Internet Plus service (another skinny bundle option) ultimately upgrade to a higher-level offering.
The nation's largest cable operator has also been very clear that it doesn't plan to use its new IP-based services as an intermediary step on the way to over-the-top TV delivery. While OTT may be attractive to consumers, it doesn't come with the same financial returns as a service like Comcast's X1. Worse, launching an OTT service could quickly undermine the existing X1 revenue machine. (See Comcast: X1 Strong, No Need to Go OTT Today.)
So why is Xfinity Instant TV noteworthy? For Comcast, it's a critical milestone in the company's long and very deliberate march toward IPTV. Comcast was the first cable operator to invest the resources necessary to transform its network for the Internet age, and while it's taken nearly a decade, the end result means that today Comcast can deliver its entire library of content over IP. The company will continue to serve a massive footprint of customers over its legacy QAM platform, but Xfinity Instant TV -- along with the many IP components of X1 -- is a foundation for Comcast's future. (See also Comcast Teases X1 With Xfinity Stream.)
As for possible future OTT ambitions, while Comcast has no cause to venture down that path today, the television industry is changing rapidly. With more operators now marketing to a national customer footprint, it's hard to imagine that the lure of a larger addressable market won't catch up with Comcast eventually. If and when the economics make sense, Comcast will undoubtedly be ready with an OTT service of its own. (See Comcast Stacks Up National TV Rights – Report .)
— Mari Silbey, Senior Editor, Cable/Video, Light Reading