In a world where cord cutting and streaming services have blurred the picture for the pay-TV industry, Matt Strauss, Comcast’s top video executive, believes the key to keeping customers hooked up may come down to just one word: bundles.
Bundling everything from video and high-speed internet to a forthcoming wireless phone network offers a better value and experience than stand-alone services, Strauss said. And it makes cable giant Comcast more than a pay-TV provider.
“We don’t see ourselves as a cable company,” Strauss said. “We see ourselves as a technology and communication-entertainment company, much more in the consideration set of Apple and Google than more of the traditional cable and satellite providers.”
The strategy may already be paying dividends.
Pay-TV providers, including cable and satellite, lost a record 762,000 subscribers in the first quarter of 2017 — five times as many as the same period last year, according to research firm MoffettNathanson. Meanwhile, over-the-top streaming services such as Dish Network’s Sling TV and DirecTV Now together added more than 300,000 subscribers.
Comcast bucked the trend, adding 42,000 pay-TV subscribers in the first quarter, bolstering Strauss’ enthusiasm for the power of bundling.
Strauss, 45, joined the senior management team at Comcast in 2004, working his way up to executive vice president and general manager of video and entertainment services three years ago. He previously worked at Rainbow Media and ABC.
The following interview has been edited for length and clarity.
Q: With so many people cutting the cord, has pay TV lost its mojo with viewers?
A: The paradox of all of this is there’s probably no better time to be alive if you love television. There’s more high-quality television, more original television, that’s available now than in the history of television. Cable networks who had relied on syndication now are investing heavily in originals. And then you’ve got also originals coming from over-the-top services like Netflix and Amazon and Hulu in addition to the traditional (premium channels).
Q: Who is the typical cord cutter?
A: There’s always been a segment of the population — it’s been between 15 (percent) and 20 percent of all TV households — who’ve never subscribed to pay TV. They haven’t subscribed to pay TV for a variety of reasons. It could be they can’t afford (it), they don’t really need it. In some cases, they don’t qualify for it because of credit issues.
A lot of what you’re seeing in the market, whether it’s Sling or DirecTV Now or YouTube, in many ways they’re catering to that segment. That’s not a bad thing. It’s just another example of how the technology is allowing products to be really targeted.
Q: A lot of people say cable is too expensive. They want internet and perhaps a low-cost streaming video service — not necessarily from the same provider. What is your argument against that?
A: Independently, you can always take high-speed data or video, but I think when you take them together, not only are you going to get the best services, but you’re going to get the best value. I think what some people may realize, at least when it comes to skinny bundles, is you may ultimately find that you’re paying more and getting less. That’s a dynamic that will reveal itself over time.
Q: Millennials seem to be leading the cord-cutting revolution. Are they simply not into TV as much as their baby boomer parents?
A: One of the misnomers that I think a lot of people have is that millennials don’t watch TV. It’s actually wrong. Millennials watch a lot of TV. They just watch TV differently.
A millennial very much consumes sports, very much consumes broadcast television, very much consumes premium channels like HBO and Showtime. They just want to access it differently, and they want to have it in an economic model that is more affordable for them.
Q: With so many people watching video on smartphones, computers and tablets, what exactly is a TV these days?
A: To me, a television is a piece of glass. Any piece of glass that can render video securely is a TV. When you look at it through that lens, you start to see the world differently around the all the different types of applications and places that you can now make video available. But television is still where most people consume the majority of their video.
Q: Does Comcast offer a skinny bundle, a lower-cost package of channels?
A: Later this year, we’re going to be launching another product called Xfinity Instant TV. You don’t even need a set-top box. If you take our high-speed data, you’ll be able to download the Xfinity Stream app starting at about $15 (per month) and access broadcast (channels) and get a cloud DVR and access to a premium channel. Then if you want to add on top of that, skinny packages like a sports and news pack or kids and family pack or a TV and entertainment pack, you’ll have the ability to do that.
Q: When is Comcast going to come out with a stand-alone, over-the-top streaming service like Sling TV or DirecTV Now?
A: “Over-the-top” typically means you’re delivering video on a national basis. We are not focused on delivering a national over-the-top service. We’re very focused on delivering products and services within the markets that we serve today, like Chicago.
The reason for that is we think the real value is in the bundle, in our ability to deliver high-speed data, video, voice, home security, home automation. So it’s the bundling of those products and services that we think is a real differentiator, and it’s also where we think we can provide the most value to our customers.
Q: Comcast doesn’t have the best reputation when it comes to customer service. How do you overcome that?
A: What we’re finding is that when you’re honest with your customers, when you really demonstrate making an effort to make it better and do right by your customers, people will give you another chance. People generally respect that, and I think that level of transparency is something that we are aspiring to do and improve upon.
Twitter @RobertChannick
