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What Comcast Can Learn From Verizon ‘Flex View’

Verizon’s Multiscreen Offering Has Goosed FiOS TV Revenues & Reduced Churn Without Massive EST Market Share 11/22/2013 5:27 PM Eastern

Apple iTunes commands the electronic sell-through (EST) market for movies and TV shows, but, as Verizon Communications has shown with “Flex View,” pay-TV operators can jump in and generate tangible benefits with just a fraction of the market.

And that could bode well for Comcast as it enters the EST fray with the Xfinity TV Store, a service that will do battle with iTunes,  Vudu, Amazon Instant Video, Target Ticket and M-GO, among others.

According to Verizon spokesman Bill Kula, Verizon has seen the average EST revenue per FiOS TV customer quadruple since the company introduced an EST product in October 2010 (Flex View’s for-sale library currently offers more than 10,000 movies and 30,000 TV shows). “From our research, FiOS customers who use Flex View on demand are three times less likely to churn than customers who do not use the service,” he added.

And Verizon’s getting those results with just a small, albeit expanding, piece of the EST pie.

According to NPD Group, iTunes held 61% of the EST movies market for the period of June through August of 2013, followed by Amazon Instant Video (15%), the Sony PlayStation Store (7%), Vudu and Xbox Video (4% each) and Google Play (3%).

In that same report, the first from researcher to include Flex View data (at Verizon’s request), Verizon Flex View represented about 1% of the EST movie market on a national basis, and a 6% share in the FiOS TV footprint, but not among FiOS customers, Kula explained.  

“Assuming an average 35% market share, the 6% translates to a 17% market share among FiOS TV customers,” he added.

He noted that Verizon’s biggest EST growth spurt occurred in the second half of last year, when studios began to support windows that made titles available for electronic sale before they were available for rent or purchase on DVD or Blu-ray.

Comcast’s new electronic video store will also benefit from the earlier EST window.

More analysis and detail about Comcast move into the EST market will be covered in the December 2 issue of Multichannel News.

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