Behind-the-curve: “Comcast and other ISPs will eventually bundle broadband and streaming video”

Precis – According to  Barclays , with the arrival of Disney+, HBO Max, Peacock, and other new SVOD services, broadband operators will begin bundling high-speed data services with specific fee-based apps. 

TDG – Under what rock have these folks been hiding for the last five years? A bit of history will prove useful. TDG recommended a decade ago that MSOs spend the money to develop proprietary IP-based platforms in order to fend off OTT competitors and own the broadband gateway to the TV. Comcast did just that, investing heavily in the X1 platform. Launched in 2012 and largely misunderstood by analysts, within a few years the platform’s value was undeniable, so much so that other cable operators licensed X1 for their own systems. With the X1 in place, Comcast was the first to embrace Netflix, making it a feature of the X1 app store. At that point, the writing was on the wall. No longer able to dismiss the impact of Netflix and SVOD services, Comcast would bring third-party streaming into the pay-TV ecosystem.

Add to this Comcast's (correct) response to the emerging threat of Pay-TV 3.0 “operators” like Prime Channels and hardware OEMs bundling fee-based apps - i.e., dropping the monthly fee from its Flex service and providing a slightly-watered-down version of X1 (including 4K support and a voice-enabled remote) for free to its broadband-only subscribers. In other words, if the future of TV streaming is in fact Pay-TV 3.0 bundles, Comcast is fully equipped to step into this ring and own it, disrupting or even eliminating the need for third-party streaming devices.

Free Flex will prove difficult for any rational Xfinity broadband-only subscribers to reject, and thus a compelling reason to stay within the branded service ecosystem. As a long-time X1 app store user, I can say without equivocation that each time Comcast adds another service to its app store, it further reduces my use of third-party platforms. As noted last week, Roku and its ilk have taken notice as have their investors .

For many, this is news. For TDG subscribers, however, this was all but inevitable.