Comcast Cuts Price of Its Streaming Hardware From $5 a Month to $0

Date : 09/18/2019 @ 10:55PM
Source : Dow Jones News
Stock : Amazon com (AMZN)
Quote : 1767.35  30.92 (1.78%) @ 9:08PM

Comcast Cuts Price of Its Streaming Hardware From $5 a Month to $0

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By Lillian Rizzo 

Comcast Corp. is making its streaming device available free of charge to its internet-only customers, in an effort to capitalize on its expanding broadband customer base as the battle for streaming customers ramps up.

The nation's largest cable operator launched Flex, its answer to other streaming hardware such as Roku, Amazon.com Inc.'s Fire TV Stick and Apple Inc.'s Apple TV, earlier this year. The device, which originally could be leased for $5 a month, will now be free to all broadband customers during the duration of their contract, the company said Wednesday. Comcast declined to say how many of its customers had opted to lease the Flex since its inception.

Another competitor to Flex was launched Wednesday: Facebook Inc. introduced a new Portal device that has television chat and video-streaming capabilities, becoming the latest company to enter the streaming-hardware field.

Comcast's decision to make Flex free to customers comes one day after the company's NBCUniversal unit unveiled its new direct-to-consumer streaming service, Peacock, a nod to NBC's logo. Peacock will launch in April 2020 and will be available for free to Comcast's more than 21 million U.S. cable subscribers.

The company has yet to disclose pricing for the app outside of its customer base. While Peacock will be available on Flex, Comcast declined to say whether it would be free as well for internet customers, or what the price point will be.

CEO Brian Roberts on Wednesday said Peacock would lean heavily on advertising. Mr. Roberts added the company is exploring how to work with other distributors to extend Peacock to non-Comcast cable customers at no additional cost to them.

Like its peers, Comcast has been bleeding pay-TV subscribers as people abandon traditional pay-TV packages in favor of streaming apps like Netflix Inc., Amazon's Prime TV, and Hulu Inc. Mr. Roberts on Wednesday said Comcast has 55 million customers across its business, but the company has lost cable-TV customers for the past nine consecutive quarters.

Mr. Roberts, who was speaking at Goldman Sachs Group Inc.'s Communacopia conference in New York, acknowledged the cord-cutting trend is here to stay, and said providing Flex as an option to broadband-only customers is a way for the company to remain a video-content provider.

"Not all video customers are profitable to us anymore, and programming costs can be lumpy," Mr. Roberts said, adding it isn't always worth fighting the cord-cutting trend for those reasons.

Comcast said Flex is able to stream videos in 4K resolution and comes with a voice-activated remote control. The technology behind the Flex platform and remote control stems from Comcast's cable system, Xfinity X1, which gives cable subscribers access to their pay-TV package and streaming apps through Comcast's set-top box. A majority of Comcast's cable customers use the X1 platform and its voice remote.

The company said Flex would provide a "digital dashboard, "similar to X1 and Xfinity's xFi internet service, so that customers can manage their related internet-home products, and use other functions similar to a smartphone.

Comcast said there wouldn't be any advertising on Flex. It declined to say whether it would take a cut of subscriptions purchased through its platform. As with other streaming devices, apps from rivals including Hulu and Netflix are available on the platform.

Peacock will be added to Flex once the service is live. Skinny bundles, such as Dish Network Corp. 's Sling TV or Alphabet Inc. 's YouTube TV -- which provide access to a limited selection of live TV channels -- aren't available on Flex yet, although Sling International, which provides international TV shows, is.

The company will reach out to its current internet-only customers, with and without Flex, to notify them that Flex is now available free of charge. (Customers will still have to pay $5 a month if they want a second device.).

Flex is currently only offered to Comcast customers. Matt Strauss, Comcast Cable's executive vice president of Xfinity Services, on Wednesday said the company was exploring whether license Flex to rivals -- similar to the X1 cable platform that is licensed to Cox Communications, among others.

While Comcast has focused on speed upgrades to improve broadband customers' experience, offering Flex at no cost is meant to improve the internet-only customers' experience, a spokeswoman said.

Write to Lillian Rizzo at Lillian.Rizzo@wsj.com

 

(END) Dow Jones Newswires

September 18, 2019 17:40 ET (21:40 GMT)

Copyright (c) 2019 Dow Jones & Company, Inc.

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