Could Flex be Comcast’s secret weapon in cord-cutting era?

Comcast’s Flex service, initially derided by some critics as a puzzling product without a clear market, is making a big difference in reducing churn on the company’s “center-of-the-plate” offering, Xfinity Broadband, said CFO Mike Cavanaugh today.

​Xfinity Flex is a streaming device that puts multiple streaming apps in one place on the screen.

“Not everyone wants to have the traditional bundle, or the modified bundles we’ve brought on to cater to different customer needs,” Cavanaugh said at a Deutsche Bank investor conference. “While we may have fought that a little bit years ago, we've clearly embraced where the world's going with the idea of, we have an opportunity to attach to our broadband the kind of brains that goes in X1,” the company’s flagship cable box.

Flex has 3 million users, who get it free if they subscribe to either Xfinity or to the most expensive tier of streaming service Peacock.

Cavanaugh said the company is trying to make its broadband connectivity “more than a pipe,” with add-ons such as Flex, a wireless MVNO, business services such as network security, even cooperation agreements with other cable providers to serve larger customers whose operations straddle service areas. All of those help differentiate Xfinity from just another data pipe and reduce churn.

“Many people were worried we'd chase holding onto a video bundle, even if it went upside down on us economically,” Cavanaugh said. “We are very eager to continue to super-serve the segment of the market that values the full bundle. But if it's not what you're interested in, rather than chase (that declining market opportunity), Flex gives us the ability to get the same churn-reduction benefit (of) being at the end of the pipe and providing a service."

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Churn for broadband subscribers using Flex is 15% to 20% lower than for non-users, Cavanaugh said. ”It then becomes a platform to do more,” including selling subscriptions to “the big streamers out there.”

“It can't be a bad thing when you think about the 30-million-plus customer relationships we have,” Cavanaugh said. “It’s not an abandonment of our other video strategies. I would say it's a complement to our broadband strategy.”

He said integration on Flex gave “a tremendous assist” to the launch last year of Peacock, which he said is “off to a good start” with 33 million subscribers eight months after going wide in July. That despite the year’s delay of the Tokyo Olympics and a lack of original shows, both because of the pandemic and lockdown.

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“To be where we are is a real testament to the power and content and understanding of the media space that our teams at NBCUniversal have,” Cavanaugh said. “We’re really pleased with the start we have.”

The company will “in short order be on all the major ways that people have to aggregate their streaming services,” Cavanaugh said.

He also expressed little concern with one future competitor, in-home fixed wireless broadband.

“The magnitude of the data customers are taking dwarfs what they would be able to take over a wireless network,” Cavanaugh said. “If you look at what it would take for a wireless network to compete, I like our hand,” though he acknowledged “it’s a whole different story in Europe.”

The company hopes to resume share buybacks “in the second half of this year while funding all the right kind of investments for growth,” he said. “I think the company’s in a great spot. It was a hell of a year last year, but I think we enter this year the better for it.”