Charter Communication’s trend avoiding pay-TV subscriber contraction appears to be coming to an end. The Spectrum TV provider April 30 reported residential video customers decreased by 156,000 in the first quarter (ended March 31), compared with a decrease of 70,000 in the first quarter of 2020, and 152,000 in the first quarter of 2019. Charter ended Q1 with 15.5 million Spectrum residential video customers.
Charter, the No. 3 pay-TV operator in the country, in 2015 was one of the first operators to launch a broadband-only service — dubbed Spectrum TV Plus — that included a free Roku 3 player priced at $12.99 a month.
“We continue to execute well in a market environment that has not yet returned to normal,” CEO Tom Rutledge said in a statement. “We added 355,000 Internet customers in the first quarter, and 2 million over the last year, for year-over-year growth of 7.3%.”
Charter ended the quarter with 29.2 million broadband subscribers.
With the April 1 start of the Major League Baseball season just around the corner, Comcast March 23 announced that its Xfinity broadband subscribers with a Flex device can now access MLB games on the league’s proprietary MLB.tv subscription streaming app. A separate subscription is required to access every out-of-market game. In 2020, MLB.tv cost $121.99 for a season of coverage.
Comcast’s 3 million Flex subs also have access to MLB.tv’s expanded library of programming with a full range of features, documentaries and classic games from MLB and MLB Network.
Existing MLB.tv subs can say “MLB app” into their Xfinity voice remote to launch the app and log-in to their subscription. New customers can subscribe to any one of MLB.tv’s three packages on www.mlb.com/flex.
Xfinity Flex is a 4K streaming device included with Xfinity high-speed Internet service that extends the features of the X1 set-top box for streamers, giving them an integrated guide and voice remote to access their entertainment, including a growing collection of live sporting events.
When Comcast launched the Xfinity Flex streaming media device in 2019, the strategy was to market an in-house product for broadband-only customers that could compete against Roku, Apple TV, Google Chromecast and Amazon Fire TV as a conduit for over-the-top video distribution.
Last year as NBCUniversal rolled out the Peacock hybrid subscription streaming, ad-supported video platform, negotiation issues kept the service off both Roku and Fire TV at launch. While availability of the Peacock app on Roku has been resolved, many of the platform’s 33 million sign-ups occurred due to Flex, according to CFO Mike Cavanagh.
Speaking March 10 on the virtual Deutsche Bank Media, Internet & Telecom Conference, Cavanagh said 3 million Flex devices have been licensed to Xfinity subs. Plans call to add additional services onto the device, including third-party apps.
“Video is changing from what it once was, and we’re moving to a streaming world for television” Cavanagh said. “Our broadband pipe is the best product to consume video.”
Comcast added 1.94 million high-speed Internet subscribers in 2020 to end the year with 28.3 million subs — making the erstwhile cable TV company the largest single ISP in the country.
“Not everyone, as we know given all the forces in the media market place, want to have the traditional cable bundle,” Cavanagh said, admitting Comcast for years fought that consumer sentiment.
Indeed, the cabler in 2017 embraced the new world order in dramatic fashion when CEO Brian Roberts publicly embraced longtime nemesis Netflix, affording the SVOD behemoth direct access to Xfinity subscribers.
“We clearly embraced where the world’s going,” Cavanagh said, adding that the Flex device enabled the company to enhance the existing cloud-based Xfinity set-top box for the streaming-centric consumer. More importantly, Flex was launched to reduce churn 15% to 20% among broadband-only subs versus a broadband customer without the device.
“Many people were worried we’d chase holding onto a video bundle even if it went upside down on us economically,” he said. “We are very eager to continue to super-serve the [pay-TV] segment of the market that values the full bundle … but if it’s not what you’re interested in, Flex gives us the same ability to get the same churn reduction benefit.”
Cavanagh said Flex ultimately becomes another platform providing video entertainment choices to subscribers.
“That can’t be a bad thing [as] 70% of Internet activity use is video entertainment consumption,” he said.
When Dish Network launched Sling TV in 2015, it represented pay-TV’s answer to the pricey cable bundle and Netflix. Competitors such as Sony PlayStation Vue, Hulu with Live TV, DirecTV Now quickly joined the party. But the industry shine seems to be fading.
Speculation U.S. consumers quarantined in their homes would temporarily stem pay-TV cord cutting was dispelled with the industry’s largest first-quarter decline for traditional multichannel subscriptions. At two million, it was the largest quarterly drop to date.
New data from media research group Kagan estimates it was also the first quarterly decline for virtual multichannel alternatives. The broadband-delivered services collectively lost 261,000 subs or 2.8% to finish the quarter with 9.2 million subs.
Gains from Hulu with Live TV and YouTube TV were erased by the declines from Sling TV and AT&T TV Now (formerly DirecTV Now) as well as Sony’s decision to shutter PlayStation Vue in January.
By comparison, subscriptions to traditional cable, direct broadcast satellite and telecommunications video services dropped 2.4% in the quarter.
As a result, Kagan updated its forecast for video market share in the U.S. due to mounting unemployment and the COVID-19 economic downturn. The revised projections suggest broadband-only households to surpass combined traditional and virtual multichannel subscribers. Indeed, online TV services have narrowed their cord cutter appeal and are expected to account for less than 10% of occupied households and reach nearly 11 million by the end of the year.
Meanwhile, broadband homes are increasingly satisfying home entertainment needs through a combination of free and subscription-based streaming services, including adding 24.7 million subs by the end of 2020, accounting for more than 19% of occupied households.
“Home isolation should have stemmed multichannel defections, but the cruel irony of the interruption in programming and ensuing economic turmoil is expected to blunt the benefits,” Kagan wrote in a note. “We forecast an 11% drop in traditional multichannel subscriptions in 2020, and penetrations of less than 56% at the end of the year.”
Comcast May 14 announced it has deployed more than 1 million Xfinity Flex devices since the unit’s launch last year. Included with Xfinity Internet (broadband) for free, the device leverages Xfinity X1 technology to deliver video to high-speed Internet-only (non-pay-TV) subscribers.
Dana Strong, president, Xfinity consumer services, said the platform combines access to 200 third-party streaming services such as Peacock, Hulu, CBS All Access, Radio.com and Black News Channel. These services join Netflix, Amazon Prime Video, Amazon Music, HBO Now, YouTube, Epix, Starz and Pandora. Flex also affords subs access to AVOD services such as NBCUniversal’s Xumo, Tubi and Pluto TV.
“Flex was designed to fit seamlessly into the lives of our Internet-only customers,” Strong said.
Last month, NBCU previewed Peacock to Flex subs. Peacock Premium is now available to Xfinity X1 and Flex customers at no extra cost. The service offers over 15,000 hours of shows and movies, and Flex customers can simply say “Peacock” into their voice remote to explore iconic shows and movies, NBC favorites, plus trending news and pop culture updated daily.