Is it just me or was the first thing you thought about when Charter and Comcast announced their streaming platform partnership Wednesday, was that it was the foundation for what the industry has been quietly thinking about for the past couple of years — becoming de facto aggregators/curators of the growing number of streaming services/direct-to-consumer offerings that are dominating the video landscape.
OK, maybe it was just me. But think about it. Comcast has been saying for years that it would think about licensing its Flex product -- which offers a ton of free programming and more importantly, links to just about every major and minor streaming app out there, to its broadband-only customers for free -- but hasn’t really pulled the trigger outside of Cox Communications’ Contour product and a few Canadian operators. Charter, as far back as 2019, has said it would consider licensing Flex if it was made available. Now, Comcast and Charter have decided to partner to offer a platform that is basically the Flex product, offering data-only consumers a more convenient path to streaming services at a time when those streamers are experiencing a slowdown in customer growth.
Not all of the details have been worked out yet -- there is still a question of whether Charter will charge a monthly device rental fee, a flat fee or no fee at all for a Flex-like box when it becomes available to its customers in 2023. And while the functionality will be incorporated into XClass TVs, which Comcast launched through Walmart last year, whether it will find its way into other Smart TVs is uncertain. One thing is certain though -- it won’t charge its broadband-only customers for the Flex-like service, just like Comcast doesn’t. And though it won’t be automatic for broadband only customers to receive the service, it seems kind of counter-intuitive not to sign up for it if you’re already signing up for broadband service. Why wouldn’t you? Whaddaya got to lose?
The distribution opportunities are huge. Charter has about 28 million broadband customers, and 15.2 million video customers, meaning broadband-only represents about 13 million subscribers. At Comcast, with roughly 17.5 million video and nearly 30 million residential broadband subscribers, the broadband-only rolls are about 12 million. Even with, at last count, 3.8 million Flex boxes deployed, there is still a lot of runway for the product.
Because if it’s anything like the current iteration of Flex -- and chances are it will be exactly that -- consumers will get access to 10,000 free movies and shows from NBCUniversal’s library like Saturday Night Live and others as well as access to subscription apps like Netflix, Amazon Prime Video, Disney Plus, HBO Max, Apple TV Plus and ad-supported apps like Tubi and Pluto TV.
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It’s the apps access that could be key in the future. At the Morgan Stanley Media Entertainment and Technology conference last month, Charter chairman and CEO Tom Rutledge said that he sees opportunity for cable operators to serve as curators for all the streaming content that is out there and is to come. That was controversial enough to force Charter chief financial officer Jessica Fischer to walk back those comments a bit at the Deutsche Bank TMT conference a day later, adding the timing wasn’t quite right for streaming aggregation.
Now, maybe Rutledge jumped the gun a bit, or maybe Fischer was saving the big reveal for Wednesday’s announcement, or maybe it really will take a while before cable operators can “curate” streaming apps, but at least the groundwork is done. How difficult do you think it would be for Charter, Comcast or both to offer the ability to manage your growing streaming subscriptions for you, offering you a place where you can pay for all of them via one bill? Gosh, that almost sounds like cable video, but with apps, and none of the hassle of having to negotiate carriage agreements. Why, heaven forfend, would any cable operator ever want that?
Already, Xfinity Flex customers can navigate the ever-crowded landscape of shows using their Xfinity voice remotes -- speak a title into the remote and the guide will show you what services it’s available on, and whether you have a subscription to the service. How hard would it be to take that functionality to the next step?
Adding Charter gives Flex a tremendous amount of additional scale -- including strongholds in the two biggest media markets in the country, New York and Los Angeles -- which is critical to the success of a product like this and its possible future iterations.
On Comcast's Q1 earnings conference call Thursday, chairman and CEO Brian Roberts perhaps offered a hint of insight into the future, adding that one of the great things about the cable industry is its ability to reinvent itself.
"We believe aggregation is a real opportunity to see customers who have now so many more choices, and they just want to get to the content they want really fast and in a seamless way and have somebody who makes it work for them,” Roberts said, adding that as viewing patterns change, Comcast and NBCU have responded with new ways to access programming through linear, VOD, and streaming through its Peacock service.
“I think we take those kinds of examples and figure out, in this new partnership with Charter and across the NBC portfolio, a way to continue to innovate and be relevant to the next generation of television viewers,” Roberts continued.
Take note of that last part. What could be more relevant to streaming viewers than offering a way to make their journey an easier one?
That, Ladies and Germs, has always been cable’s reason for being. Cable was invented literally to make it easier for consumers in markets that couldn’t get broadcast TV to get better access to that programming. As new technologies emerged, cable was always there to take advantage of them and make them better, whether it was HDTV, VOD, high-speed data, phone service, and a bunch of other things I’m forgetting. Cable has always responded better when its collective back was against the wall. Streaming was/is supposed to kill linear TV. Now that streaming fatigue is beginning to set in with some consumers, cable has the opportunity to come to the rescue.
