Now the distraction of the Time Warner purchase is over, Comcast needs to refocus and look for ways to stabilize its core pay TV business and look for alternative ways to grow. Here are four things the company can and should do now to get the ball rolling.
Fix escalating pay TV costs
In order to stop the trickle of subscribers cutting the cord from turning into a flood, Comcast needs to find a solution to higher than inflation increases in subscription rates. Verizon is trying to strong-arm a solution with its new “cheaper” bundle, Cablevision is trying a TV antenna and broadband approach, and Dish’s Sling TV is providing a personal streaming service mini-bundle. So far, Comcast’s attempts have been restricted to appealing to cord-cutters and cord-nevers with its Internet plus bundles of broadband + broadcast channels + HBO. It’s time for the company to start offering more creative, cost effective bundles to existing subscribers before they become cord-cutters.
Launch NBC4U OTT direct streaming service
CBS is attacking the OTT market with the subscription CBS All Access and ad-supported news service CBSN. It’s time for NBC to jump into the direct-to-consumer OTT service waters. The company has just as much to offer as CBS, and could bring premium content from cable channels such as USA and Bravo and movies from Universal Pictures. There is plenty of room to innovate here. For example, why not work with affiliates to offer local channels free ad supported and a subscription tier with on-demand and bonus content.
Bring OTT services into the bundle
Most of Comcast’s premium TV customers are already using Netflix, Amazon or Hulu. Why not accept the fact and bring them on to the set-top box. Combining these services with X1’s advanced features such as voice search could dramatically simplify the viewing experience for customers. It could also boost usage of services like PPV and Comcast’s movie store as customers do searches on the X1 set-top box rather than a Roku or Apple TV. And this approach might just be the magic that helps keep people paying those high pay TV subscription rates.
Of course, Comcast might not be ready to do a deal with Netflix, but it is one of the investors in Hulu. Mike Hopkins, Hulu CEO, also seems pretty keen to get Hulu on operator STBs. Wouldn’t Hulu on Comcast X1 STBs be a win-win for everyone involved?
Accelerate the roll-out of X1
Comcast has been very vocal about how successful X1 has been in retaining customers. The company claims 12% higher VOD purchases and 20% lower churn in X1 homes. Despite these benefits, as of last October the service was only in around 9% of Comcast’s pay TV subscriber homes. Another sign the roll-out is not moving fast enough is that it has not stopped the pay TV subscriber losses the company has been suffering for at least the last 8 years. If X1 is everything the company says it is, Comcast needs to get X1 deployed throughout its network fast and aggressively push customers to upgrade to it.
Comcast has clearly been distracted for the last year or so with the Time Warner Cable bid. Now it is over, it’s time for the company to focus and innovate in its core TV business.
Why it matters
Comcast has been distracted with the bid to buy Time Warner Cable.
Now the deal is off, the company needs to refocus to fix problems with its core pay TV business.
It also needs to leverage existing assets at NBCU in new OTT direct markets.