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Friday, October 31, 2014

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  • Comcast Launches Xfinity Streampix, Seeking Increased Packaging and Pricing Flexibility

    Comcast is launching a new subscription video-on-demand service called Xfinity Streampix that will be freely available to most of its higher-paying subscribers, while carrying a $4.99/mo charge for its lower-paying video subscribers. At launch the service will include past season episodes such as "30 Rock," "Grey's Anatomy," and "Married With Children" from NBC, ABC and Sony respectively, as well as movies from Warner Bros. and Universal, plus kids programming from Cookie Jar and Disney Channel. Streampix will be accessible both in and out-of-home and on multiple devices like the Xbox 360 and Android as the year progresses.

    Practically all of the content included at launch is also currently available on Netflix streaming, which at first blush suggests that Streampix is intended to be a Netflix-killer. That may be a consequence of the initiative, but I view it as actually being part of a broader strategy by Comcast to gain packaging and pricing flexibility in appealing to consumers whose interests are increasingly diverse. Recently in "Disney, Comcast and Why TV Everywhere Alone is Not Enough," I argued that while TV Everywhere's multi-platform access is terrific, pay-TV operators must also innovate in how they package and price bundles of programming to consumers. Simply providing better access to existing high-priced multichannel services ignores the fact that more sophisticated consumer segmentation is needed to succeed.

    With Streampix, Comcast is moving in that direction. The question that arises of course is what consumer segments is Comcast really targeting with Streampix? Since it requires a basic subscription that includes broadcast networks, Streampix subscribers would have to value that programming. As such, it also helps pre-empt those exploring putting up antennas to pick up broadcast signals, a subject coincidentally well-covered in a WSJ article just today. And since some sports still air on broadcast networks, the bundle including Streampix retains casual sports fans, while relieving them of costly monthly fees for sports networks like ESPN, RSNs, etc.

    Still, Streampix's emphasis on library content means it will inevitably be evaluated by prospective subscribers as an alternative to Netflix, Hulu Plus, Amazon Prime and others. Since Streampix's content still pales in comparison to these options, it's hard to see how many people will currently chose Streampix. Comcast surely knows this, and so that leads me to think that for now Streampix is more of a placeholder than anything else for Comcast, opening up an important new option for how it packages and prices content, and how it talks to content providers about licensing.

    How aggressively Comcast chooses to beef up content, add in other features (DVR in the cloud?), and promote Streampix will ultimately determine how valuable Streampix is for wooing consumers inundated by other video choices.