As the video landscape evolves operators have been looking to offer new kinds of TV options and packages, including bringing streaming into the fold in different ways. Efforts are early, but it appears some are gaining traction as others hit road bumps.
Comcast’s StreamSaver bundle pairing Peacock, Netflix and Apple TV+ at just $15 per month, which was introduced in May, is already getting positive response after just a short time in market.
That’s according to Christine Whitaker, president of Comcast’s Central Division, who sat down virtually to chat with StreamTV Insider. Whitaker declined to quantify traction or uptake of the bundle, which is available to the operator’s Xfinity customers, but said it has been “really strong out of the gate.”
The company hasn’t yet put its full marking might behind the bundle, according to Whitaker, who oversees Comcast’s Central Division that encompasses 16,000 employees and 21 million customers across a 12-state footprint. But even without heavy promotion initial results indicate it’s performing “really really well.”
“It’s been well received by our consumers, both existing customers and new customers, which is exactly what we thought would happen, but even better” Whitaker said, adding the operator sees it as a premium streaming package that will be a hit with both existing and prospective customers.
The bundle includes ad-supported versions of Comcast-owned (via NBCUniversal) Peacock, Netflix, as well as Apple TV+, offering around a 30% discount to the cost of buying each service on its own.
Inclusion of the ad-supported plans instead of commercial-free hasn’t appeared to dampen interest, according to Whitaker, who noted consumers are finding the price point compelling. It’s seeing interest both from existing TV customers that have downgraded their services over a period of time “to try to right size bills” and pick StreamSaver as a video option, as well those bringing an entirely new customer relationship to the operator.
StreamSaver picks up steam, Charter’s Disney+ push falls short?
The comments come as Puck News this week reported that some aspects of Charter and Disney’s landmark carriage deal reached last September – with which the cable operator aimed to set a new type of video model by dropping less-watched networks and including ad-supported versions of Disney+ in certain Spectrum pay TV packages at no extra cost to customers – haven’t been going so well.
Analysts at LightShed Partners, in a July 16 blog, noted the report from Puck’s John Ourand indicates less than 10% of Charter’s roughly 9.5 million Signature Select video package customers are activating Disney+ and questioned if the operator’s vision for video is wrong.
“Charter is back to where it started, stuffing video offerings into its bundle that the vast majority of its consumers do not use, which hurts the price/value of the video bundle,” wrote analysts led by Richard Greenfield. Meanwhile, Disney is getting paid $3-4 per subscriber per month by Charter for all 9.5 million subscribers even though less than 1 million might be using it, the firm said (but also called out the fact that it means Disney’s missing out on that advertising revenue).
While it’s still unclear how successful Comcast’s StreamSaver bundle is or will be, it brings an example of how the two largest U.S. cable operators are experimenting with streaming offers and TV packaging in various ways.
To be sure, there are a lot of factors involved and the two examples aren’t directly comparable for several reasons. A main one being the business relationship for Comcast and its streaming partners is different as Netflix and Apple TV+ aren’t legacy media companies like Disney so there aren’t any carriage agreements (and associated fees) or renewals involved for linear networks. Plus, Netflix and Apple originals aren’t available on pay TV networks. Comcast declined to comment on the financial relationship with the streaming bundle partners, so it’s unclear whether Netflix and Apple TV+ receive wholesale per subscriber fees and/or a revenue share. Additionally, Comcast isn’t including apps at no cost in pricier TV packages, instead pitching the bundle as its own offer for broadband and TV customers and asking them to pay a monthly price (Charter’s customers pay too but it’s for the TV package lineup with apps included as a value-add). And unlike Charter, Comcast has a role as both a traditional programmer and content owner through NBCU and owner of one of the streaming services in the bundle with Peacock.
So two different situations, but worth taking a look at Comcast’s latest approach to evolve video and offer streaming options, alongside potential factors LightShed called out regarding why so few Charter customers may have activated their free Disney+ subscriptions.
Ad-supported hurdle and market segmentation
LightShed posited three reasons why Charter customers reportedly aren’t activating Disney+. One is that the offer from Charter doesn’t give customers the option to pay more to get the ad-free version of Disney+ or to utilize discounted offers in Disney-delivered duo or trio bundles with Hulu and ESPN+.
So if customers want ad-free or a discounted bundle “you have to effectively subscribe twice (so you have no need to activate your Charter/Disney+ subscription,” wrote LightShed.
Separately in the interview with Whitaker, the executive noted Comcast hasn’t seen evidence that ad-supported versions of apps are a hurdle to uptake, saying “we’re not seeing it as any sort of limitation” and reiterating “we’ve got great traction.” She also emphasized there’s an easy and clear path to upgrade to ad-free versions of services in the StreamSaver bundle for a fee, so consumers aren’t locked into watching ads nor do they need to disconnect from the bundle if they want to upgrade. It also doesn't require a contract.
Another factor LightShed suggested for lack of Charter’s Disney+ uptake is customers not having the right profile - including that Charter customers still holding on to pay TV could skew towards older families and therefore might not have the demand for kid and family-focused Disney+ content. Or the ad-supported version might not appeal to those with enough disposable income to afford the operator’s pricey Spectrum pay TV package in the first place.
In contrast, Comcast’s bundle might have more widespread appeal, in part because Netflix is consistently the most-watched streaming TV service in the U.S. behind only YouTube, per Nielsen’s the Guage monthly snapshot (accounting for 8.4% of U.S. TV time in June compared to 2% for Disney+). And as a trio bundle it brings in more content options including next-day broadcast from NBCU. That said, Peacock ranks lower on The Gauge at 1.2% and Apple TV+ didn’t meet the 1% threshold to even make the list. A recent MoffettNathanson quarterly streaming report also pegged just around 11% of U.S. streaming households as using Apple TV+, finding usage has remained flat for the service that’s lagging behind most major SVODs, per NextTV.
As for customer profile, Whitaker emphasized Comcast’s ability to segment the market and tap into consumer behavior, where the streaming bundle can appeal to both high-end premium customers and those looking for value.
Ultimately, the operator’s looking to offer more options and flexibility for packages, such as pairing StreamSaver with Comcast’s Now TV lineup that launched last year and features more than 40 linear live TV networks for $20 per month. Xfinity customers can get Now TV and StreamSaver together for a total price of $30 per month. On the other end, premium customers could add StreamSaver on to 1-gig internet and a full-fledged linear pay TV package.
Whitaker cited this as a unique aspect where “it’s not one-size fits all.”
And other iterations of bundles are likely to come.
“I think we’ll test and learn over time for sure,” she added, regarding what packaging and services hit the mark.
Consumer awareness
LightShed also said subscribers might not be aware of their free access to ad-supported Disney+ from Charter, as consumers need to go into the app separately and can’t simply stumble upon content using legacy Charter hardware or the Xumo Stream Box.
Charter has previously said one benefit of the deal for Disney is getting cable operator’s in-house marketing and sales teams – including promoting Disney apps to its broadband-only base. On the Comcast front, awareness in terms of access is likely less of an issue since consumers need to proactively sign up and pay for the StreamSaver bundle – rather than apps newly included in TV service they already subscribe to and are billed for like Charter.
Still, Comcast does need to make consumers aware the streaming bundle exists. Marketing efforts haven’t fully ramped, but Comcast is taking an omnichannel approach across media, social and other channels. So far it’s let some awareness happen organically with a ‘walk, skip, run’ approach, according to Whitaker. And in the early days, has started to see “just incredible transactions without even having to do a lot of that…we have a lot of upside here,” she said.
The approach to streaming offers was designed as a response to consumer behavior and with other Comcast assets in mind, including aggregating the entertainment experience in what’s become a fragmented viewing landscape.
Whitaker emphasized delivering easy navigation and integrated content discovery via Comcast’s platforms underpinned by its EntertainmentOS, including X1 and Xumo Stream Box (through the Xumo joint venture with Charter).
“As you have this package and you want to see something, like Ted Lasso, you say it in the voice remote, and it finds that for you and you don’t have to log into your Netflix account per se or your Apple TV account. It does that for you” she said.
Flexible packages
TV package flexibility with skinnier and lower cost bundles is something LightShed analysts indicated the video business could benefit from and questioned whether MVPDs should be pushing harder for that rather than hybrid bundles that bring streaming into the mix.
In its note on Charter, the firm said on the surface it sees reason for distributors to want legacy media companies to include their streaming apps into TV packages as “they feel like the best programming has all been shifted to streaming from linear TV” but think perhaps Charter’s is the wrong approach. Instead, Greenfield posited that distributors should point to steep declines in linear TV viewership to drive down affiliate fees and lower minimum distribution requirements demanded by programmers – enabling operators to offer skinnier, cheaper video packages and letting consumers add themselves whichever streaming apps they want.
“And if smaller/cheaper [video] bundles actually came to fruition, maybe bundling in streaming apps could actually be value-add to subscribers versus just adding even more bloat/cost,” wrote Greenfield. "[Charter CEO Chris] Winfrey is right, there needs to be a major change in the video biz, but the starting point for that future needs to be packaging flexibility, not stuffing in streaming apps.”
More optionality in video packages is something Charter has sought to deliver, while Comcast is also looking to appeal to a range of customers with various choices as it introduces streaming bundles alongside skinnier pay TV packages and other services like broadband.
As it renews carriage agreements Charter has added other ad-supported apps into pay TV packages (such as TelevisaUnivision’s ViX and Paramount’s Paramount+ and BET+). But it’s also launched skinnier, low-cost streaming TV packages available through its Spectrum TV app. Those include a $40 entertainment and news lineup with more than 90 channels and a $25 per month package featuring 45 Spanish-language channels, which debuted in April.
Whitaker, meanwhile, acknowledged ensuring Comcast has the right choices for consumers is key as “not everybody wants everything in the bundle” and it wants to have options available so customers can “put together what makes sense for them and their family.”
And they aren’t the only ones playing with less expensive TV packages. On Thursday Altice USA-owned Optimum announced a new Entertainment TV package available to internet customers for $30 per month through its Optimum Stream CPE device that also provides access to streaming apps. The package doesn’t include streaming services but features more than 80 entertainment channels, as well as a collection of FAST channels. In a statement, Optimum Chief Growth and Innovation Officer Leroy Williams similarly pointed to a desire for optionality.
“We know our customers want choice and flexibility, and Entertainment TV does exactly that, providing an amazing option for the entertainment content customers want to watch, all at a competitive price point,” Williams stated.
Comcast focused on overall experience
The StreamSaver bundle is also an example of how Comcast is working to bring its investments and businesses together with products that cater to consumers in a complementary fashion – where it wants to serve up not only content, but connectivity and an aggregated user experience as well.
Comcast’s traditional pay TV base has been declining and it, like other operators, has focused attention on its higher-margin broadband business, making heavy investments in network enhancements. On the entertainment side it’s also focused on technology through EntertainmentOS for devices to provide that search and discovery experience bridging linear and streaming apps.
Taken together, the operator pitches a broadband network that can reliably support and underpin high bandwidth needs for streaming (particularly as sports rights continue to shift), alongside an aggregated user experience through its integrated device UI and the content itself both from NBCU, Peacock and its streaming partners.
It's somewhat a newer version of the bundling Comcast’s been doing for decades, where the Triple Play used to be internet, home phone and TV (Comcast, like Charter, also has mobile service by the way).
Whitaker expects benefits from customers bundling StreamSaver with other services like broadband to be similar to what it’s seen from bundling in the past, including with mobile service, such as improved retention rates and reduced churn. It’s looking to not only bring in new customers but expand or deepen those it has by providing a strong overall experience that ultimately entices uptake of additional services.
“When you create and you meet customers where they are, you provide them with services they want at a great price on an awesome network, they’ll buy more from you,” Whitaker said.
A core strategy for Comcast is to “continue to innovate around broadband,” she added, including for entertainment and aggregation, where avenues like gaming and others could emerge as future companions alongside its streaming bundle products.