Bucking a trend amplified by a small but growing cord-cutting trend and the popularity of over-the-top video options, Comcast just came off a first quarter in which the MSO added 53,000 subscribers, its best first-quarter video result in nine years.
While a portion of the credit goes to X1, Comcast’s Internet protocol-capable next-generation video offering, those results are due to a confluence of efforts and initiatives that span not just the core product but also areas such as improved customer care, according to Matt Strauss, Comcast Cable’s executive vice president and general manager, video services.
Multichannel News technology editor and Next TV editor Jeff Baumgartner recently caught up with Strauss to discuss Comcast’s new video products and strategies involving X1, TV Everywhere, its new IP-delivered “Stream” product, and future 4K plans.
Editor's Note: An expanded version of this interview will appear in Multichannel News’s show dailies at this week’s INTX show in Boston.
MCN: As you look at the second half of the year, what are your top priorities?
Matt Strauss: We’re really focused first and foremost on continuing to execute against the deployment of X1. We’re seeing a lot of very positive benefits from X1, both on the churn and on the increased consumption side. We’re now at about 35% penetrated, and it’s even higher if you just look at triple-play subs — about 50% of our triple-play subscribers now have X1.
What goes hand in hand with that is that we also want to finish out the deployment of our cloud infrastructure. We’ve been deploying cloud across our footprint — both cloud streaming and cloud DVR — and we are very close to getting 100% deployment. We want to finish that up by the middle to end of this year.
Finally, we want to continue the penetration and usage of our products and services. We’ve got a very ambitious deployment for our new consolidated Xfinity app. With the upcoming Olympics [in Rio] we want to use that as an opportunity to shine a light on this new application, which we think is a tremendous value to our customers.
MCN: With respect to the pay TV momentum, how much credit does X1 get, even as you continue to improve other areas like customer care and customer experience?
MS: It certainly is contributing. When you look at X1, we’re seeing improvements in churn. X1 customers are also consuming more video. They also have a higher attachment rate to DVRs and typically they take additional outlets in their home. There’s no doubt that X1 is contributing, but I don’t know if there’s any one silver bullet.
When it comes to growing the video business, it’s really a combination of several factors and investments that we’ve been making over the past few years, in how we’ve been improving our infrastructure, moving more to IP.
MCN: What kind of usage patterns are you seeing with the Xfinity TV app? Is the big challenge getting the message out to customers so they understand the app’s full capability?
MS: I’d almost characterize it as we’re in a moment in time because we have the Xfinity TV in-home app and we have our Xfinity TV Go app. We are in the process of consolidating those into just one app, which will be the Xfinity TV app. This unification … will provide this unprecedented access to content both in the home and out of the home. And I think those lines are going to continue to get more and more blurred.
When you look at the usage of our app in general, we have about 42% penetration of our mobile app among our double-play customers on a monthly basis. On a quarterly basis, it’s almost 60% who are using one of our apps, and that’s up about 16% year-over-year.
MCN: What’s next for Comcast with respect to 4K? You’ve got the app for Samsung TVs but we’ve seen some recent reports that you’ll really be focusing more on a strategy that puts an emphasis on High Dynamic Range (HDR)?
MS: While there’s hyper-attention on 4K, when we look at the total video experience, we think 4K is part of the offering. But HDR, which is not necessarily getting the same amount of attention, is in many ways more immersive and, we think, impactful.
Instead of deploying maybe a half-baked solution, which we’re starting to see a little bit of in the market, we thought it was more prudent to deliver the complete experience … and that’s what’s being developed with our Xi6 box, which we’ll be testing this year, but it’s going to really be deployed next year.
MCN: The video market continues to be abuzz about skinny TV bundles. Comcast has been going after that segment with the Stream TV product in some select markets. What have you learned so far, and what’s next on the rollout plan?
MS: In many ways X1, we think, is satisfying the demand for how many of us watch television. The average person watches about 130 hours of video every month.
But there are changes in how other segments are consuming video. When we look at skinny bundles, we believe that they are in some ways a manifestation of the economy as anything else. It’s rare that you hear someone say that they want fewer choices. What’s more likely is that you might hear someone say they want to pay less.
We have been experimenting with skinny bundles and experimenting with ensuring we’re getting the right product to the right customer at the right time in their life, whether that’s Internet Plus or the Xfinity On Campus product, or Stream.
While Stream is, at the moment, comprised of a skinny bundle, the strategies behind Stream are much more around how we’re going to transform the overall end-to-end customer experience, and Stream is just one example of how we are expanding into that terrain.