One of the most interesting streaming stories lately is not about specific content or even a specific streaming platform, but an unlikely alliance on the streaming devices consumers use to access those platforms. NBCUniversal’s parent company Comcast has been developing and selling its own flexible streaming devices and XClass smart TVs for some time now, and last week rival cable company Charter (Spectrum’s parent company) announced that it would be joining Comcast on the 50/50 project rather than developing it. Their own. Alex Sherman has more about the implications for CNBC:
Comcast and Charter said they have developed a 50/50 project to push Comcast’s Flex streaming platform into more homes across America. Comcast will license Flex to Charter, giving Charter’s Spectrum subscribers access to the fore. Comcast will also contribute its smart TV business (XClass) and ad-supported streaming service Xumo to the project.
Charter, in turn, will make an initial contribution of $900 million to fund expenditures and expansion. Additionally, Charter will make Flex-powered devices and voice-controlled remote controllers available, starting in 2023. And while Flex isn’t a new product, the partnership nearly doubles the potential device installation footprint.
… Nearly every person or family moving into a new home or apartment needs a home broadband setup. Comcast and Charter is the largest high-speed home broadband connector in the country.
Hundreds of millions of American households already use a streaming device and may not feel like switching. But Comcast and Charter serve more than 200 million people in American households combined. Comcast CEO Brian Roberts and Charter CEO Tom Routledge could team up on a strategy to tell their broadband technicians to connect Flex devices when connecting homes across the country to the Internet.
As Sherman points out, Comcast and Charter are behind companies that have been offering streaming devices and smart TVs for some time, including Roku, Amazon and Samsung (cited by research firm Conviva as the three leaders, in that arrangement, on the global share of large companies). Screen viewing time, with both streaming devices and smart TVs counted, in Q4 2021 report). They also have some drawbacks compared to those companies: Roku’s advantage is that it’s a live/smart TV streaming company, so all of their focus is there, while Amazon can pair TVs and Fire sticks with Prime Video, Alexa voice assistant, and other aspects of their commerce portal, Samsung has a long history as a manufacturer of popular TVs. But Comcast and Charter have the advantage of all those Internet subscribers, and such a partnership between them should greatly enhance Flex’s name recognition and market penetration.
Perhaps this partnership is particularly interesting from the charter side. For Comcast, this makes a lot of sense; They keep doing what they’re doing, and Charter gives them $900 million initially to join, with more later, and helps boost the profile of Flex and XClass significantly along the way. The main downside to them seems to be that this removes the distinction between them and the charter, but A. Flex doesn’t seem prominent enough at the moment for that to matter much, and b. Direct competition for Internet customers is often limited, with only certain companies having the infrastructure to provide the service in certain regions.
For Charter, this means that they will be joining Comcast’s streaming project rather than launching their own, which has the downside of not having complete control. But it has the plus side of joining something that is already running rather than starting from scratch. Together, these two companies have a scope that will help Flex gain some brand awareness and market penetration, which could be especially important in the next few years as broadcasting continues to grow; Getting new streaming subscriptions to use your devices or TVs at this point can be critical to getting them in line with your brand. And on that front, perhaps one of the quotes Sherman quotes about Routledge, the Chartered CEO, is particularly noteworthy:
Routledge added during the charter earnings conference call that it’s only a matter of time before nearly all of the company’s customers get streaming video instead of cable TV.
“I expect most of our customer base will be all progressively [Internet protocol],” He said.
Some regions have been trending, including with DirecTV launching its last satellite in 2018 and shifting even traditional TV service to streaming receivers (instead of boxes that receive programming directly from the satellites). And “most of our customer base” on IP does not necessarily mean that they will all stray from the traditional TV packages offered by Meethaq; Some of this relates to a change in distribution technology, not a change in content. But it’s notable to hear the CEO of Charter talk about where he sees his customer base heading, and that helps solidify why they’ve struck this deal with Comcast to expand their first-party streaming device presence.
The other notable point in Sherman’s article is about the long-term potential this could bring to bundle online streaming services for those with Flex or XClass TVs. Comcast is already offering a $5 per month Peacock discount to Flex and XClass customers, and that should now open to upcoming Charter Flex/XClass customers as well (this should boost Peacock’s subscriber count). But there is also the possibility of definitive packages for online streaming services from different companies. As Sherman points out, cable companies like Charter and Comcast have a long history of successfully selling packages. This combined team enhances their range and makes them a more attractive connected TV / Smart TV partner to work with. Nothing seems imminent at the moment, but the aggregation of online streaming services certainly could happen in the long run, and this deal could lead to Charter and Comcast playing a bigger role if it does.
[CNBC; Xfinity Flex image from HighSpeedInternet.com]