Comcast has deployed about 5 million X1 boxes, the MSO revealed Thursday while also talking up the positive effects its new IP-capable video platform has had on churn and VOD and linear TV usage.
Comcast reached that milestone almost two-and-a-half years after it first launched in X1 in Boston in May 2012. The MSO now offers X1 in all markets, and is expected to expand the reach of the platform after it completes its proposed acquisition of Time Warner Cable.
Neil Smit, president and CEO of Comcast Cable, reiterated that the current plan is to have the majority of its customers on X1 within three years. “We’re right on track,” he said Thursday on Comcast’s third quarter earnings call.
Comcast, which lost 81,000 video subs in the third quarter (its best result in the category in the period in seven years), has been using X1 to stabilize its video sub base, and is now pitching X1 to both triple-play and double-play customers.
Although only a fraction of Comcast’s 22.3 million video subs are on X1, the platform, which also features in-home streaming and a cloud DVR in select markets, is showing some positive business effects.
Smit noted that X1 customers have higher ARPUs than customers on the legacy video platform, noting that X1 subs generate 20% more VOD transactions, have a higher take-rate on DVRs, and tend to use additional outlets.
In addition to a boost in VOD transactions, Comcast is also seeing higher usage of linear TV, thanks in part to the X1’s user interface, which makes it easier for viewers to discovery and find content, Smit said. “We think that targets everyone, not just the Millennial group.”
Smit said X1 represented 75% of triple-play net additions in the third quarter.
Comcast is also seeing a 20% reduction in voluntary churn among customers on the X1 platform. The MSO is getting a “pretty darn good return on that investment on X1,” Michael Angelakis, Comcast’s vice chairman and CFO, said.
Brian Roberts, Comcast’s chairman and CEO, said the operator is pleased with X1’s stability and ability to scale, calling the platform a “game-changer” for the MSO. “It’s a complicated process to get it in the home and working perfectly, but once it’s there, it’s fantastic,” he said.
X1 is also at the core of Xfinity On Campus, a recently launched managed IP-delivered multiscreen service that Comcast has developed for university partners. Six schools have launched it and “several others [are] in trials,” Roberts said.
Smit also talked up Comcast’s WiFi strategy, noting that the MSO now has about 5 million hotspots deployed, with most of them in home wireless gateways. Comcast, which also has a roaming deal in place with Liberty Global, has set a goal to have 8 million WiFi hotspots deployed by the end of the year. More than half of Comcast’s 21.58 million high-speed Internet subscribers have an MSO-supplied wireless gateway.
On the call, Smit was asked if Comcast had interest in developing a so-called “WiFi-first” mobile voice and data strategy that would use cellular as a fallback. He was non-committal, noting that Comcast has yet to clearly identify how it plans to monetize its WiFi asset.