Comcast Wisely Reduces Xfinity Flex Price to ZeroThursday, September 19, 2019, 10:19 AM ET|Posted by Will Richmond
Yesterday Comcast made a smart move by converting its Xfinity Flex service to free for its broadband-only subscribers, eliminating the $5 per month charge that was in place since its launch this past March.
Colin and I discussed Flex on our podcast back then, and while we both liked its overall value, we found the $5 per month fee to be a head-scratcher. Paying the equivalent of $60 per year for a streaming device with 10K mostly older content titles seemed limiting as other companies were competing aggressively on price and streaming sticks could easily be bought for $30 or less.
Further, Flex is both a broadband churn reducer and an upsell opportunity for Comcast to its full multichannel service (when the Flex box soon supports it). So with these benefits to Comcast, it was hard for Colin and me to understand the decision to charge consumers for Flex.
With yesterday’s announcement, that’s now moot and Flex seems well-positioned to help Comcast compete. Flex is a little bit of a lot of things - a connected TV device and voice remote powered by X1’s software, access to certain SVOD, AVOD and live TV services, integration of certain connected home devices, a VOD library of 10K titles, access to certain music services, though not market leaders Spotify or Apple Music and a grid guide.
The most important thing about Flex is that it keeps high-margin broadband-only subscribers thinking that Comcast can play a role in delivering video to them (even if that video is from third parties like Netflix and Amazon). This is consistent with Comcast’s stated strategy of being a video “aggregator of aggregators.”
With the rise of cord-cutting, pay-TV operators like Comcast have been slowly disintermediated by SVOD and OTT services. This trend is going to accelerate with the launch of more direct-to-consumer offerings (where Comcast is also hedging with the upcoming launch of Peacock, its own DTC service).
Flex positions Comcast as the device that brings all these SVOD/OTT services to the viewer, a role that Roku and Fire TV have both successfully pursued. And because you must also have an xFi gateway to get Flex, Comcast can also offer an array of home automation/security features that further enhance Flex.
It’s important to keep in mind that Flex is targeted to only a small portion of the overall market - you need to live in Comcast’s footprint, subscribe to Comcast’s broadband service and have an xFi gateway. Last but not least you must also still have a need for a connected TV device. Millions of homes are already equipped with not just one, but multiple Rokus, Fire TVs, etc.
But given Comcast’s marketing muscle and existing customer relationships, at its new zero fee, Flex will likely get pretty good adoption quickly. And that will put Comcast in a stronger position in the intensifying streaming battleground.
Categories: Broadband ISPs, Cable TV Operators, Devices