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The Skinny on Comcast's Skinny Bundle

Mari Silbey
3/28/2017

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.)


Want to know more about video and TV market trends? Check out our dedicated video services content channel here on Light Reading.


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

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kq4ym
kq4ym
4/11/2017 | 8:47:08 AM
Re: Stream
One does wonder how and who gets the responsibility for the names. While "skinny bundle services as a way to target Internet-only customers who otherwise wouldn't sign up for cable television," seems to be a marketing logic of some sort I'm not convinced there's lots of those folks out there who would choose the cable brand over the Netflix, Amazon and other choices at a little less monthly cost.
Joe Stanganelli
Joe Stanganelli
3/31/2017 | 9:23:50 PM
Re: Stream
I have a similar story.

A marketing department is tasked with having to come up with a name for a company initiative involving the company's participation in a program that involves female executives/employees volunteering for Habitat for Humanity.

The marketers (all of whom, incidentally, are women) come up with a number of good ideas -- some clever, some empowering -- and ultimately choose one that is, among other good things, on brand.

Then, a male top executive in a completely different department decides that he likes the name "Home Makers."

And so it is decided.
KBode
KBode
3/30/2017 | 3:38:11 PM
Stream
A minor observation, but I'm just happy they'll be renaming the "Stream TV" service. You've got a marketing budget of HOW many millions, and the best you can do for your streaming video service is "Stream TV?" How do I get that job?
Joe Stanganelli
Joe Stanganelli
3/28/2017 | 8:35:04 PM
downmarket
Downmarket routes have been increasingly popular -- at least in terms of considering taking them -- among companies as they work to be all things to all people in this digital age of ubiquity.

Sometimes, however, those companies quickly reverse course after their downmarket business line doesn't do as well as they had hoped.  One hopes Comcast finds a bit more success than that.
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