Comcast, a traditional provider of cable television, launched Xfinity Instant TV—the latest product offering to compete for eyeballs in the streaming space. This service is not strictly over-the-top because, like all cable services, it is delivered over Comcast’s managed cable network, but it is bound to compete with others who are. (An earlier version incorrectly stated it was an OTT service.) Will it succeed?
Comcast joins the thousands of video services that have entered the U.S. market since HBO announced in October of 2014 that it would launch its own streaming service. In its beta stage, Instant TV is making an entrance with three key disadvantages versus other existing services:
- Core offering: The skinniest bundle of the service is an $18 core package with the major broadcast networks, including ABC, CBS, CW, Fox, NBC, PBS, Telemundo and Univision. Note that you can get these channels for free using a digital antenna. As a benchmark, the leading OTT skinny bundle TV service is SlingTV, which for $20 offers 30 cable channels including FX, ESPN, Disney, and CNN. With Instant TV you can also add premium networks and channel packs such as kids, entertainment, or sports and news for $5-$30.
- Potential market: The service is being marketed to existing Internet customers within Comcast’s footprint.
- In and Out of Home Use: All programming is available in the home and customers will enjoy access to live and on demand TV Everywhere programming, as well as their DVR recordings on the go.
Xfinity Instant TV is aimed at “cord cutters” who have cancelled cable service and “cord nevers” who have never had cable, but who have Comcast internet service. Matt Strauss, Comcast’s Executive Vice President, Xfinity Services, told Multichannel News, "It’s for someone who has broadband service, but doesn’t necessarily take video. Or they want video, but they want a different video experience.” But with these disadvantages of the beta version, I wonder if it can get the traction it needs to succeed.
Laura Martin, senior equity analyst at Needham for entertainment and internet, painted the very competitive picture of the U.S. OTT market at the Digital Media Pipeline conference on Tuesday, organized by the Entertainment Merchants Association. She stated: “There are 5,000 streaming OTT apps in the market today. Consumers are confused. Nearly 50% of total TV viewing is still broadcast channel viewing. What Xfinity Instant TV offers cord cutters is an $18/month trial of the most popular channels in the larger TV bundle, which could be a stepping stone to a larger, more traditional TV bundle. For Comcast, this new skinny bundle should create a competitive advantage for its high speed modem product.”
If you think about Instant TV as a value-added offering within Comcast's ecosystem of products and customers, then Instant TV could do well, as Martin suggests. Comcast's edge in its territory is that it has key data on its customers to determine who would value a skinny bundle like Instant TV. Others, confused with the numerous options, may just settle for Instant TV's bare bones offer of broadcast channels to stream at home. But if Comcast customers go online to check their options, competitors like Sling TV may sneak in and poach some who value bare bones cable programming or streaming on-the-go.
Instant TV in beta is an attempt to lure Comcast broadband users to cable, but it is doing so in a competitive environment where you must excel to succeed. And in this context, with consumers more confused than ever, Comcast should better have a solid plan for the launch of the full version, otherwise Instant TV may get lost in a red ocean of OTT offerings, where only the best will survive.
Authored by Nelson Granados