Comcast’s X1 set-top box
As streaming services become increasingly popular, pay-TV operators such as Comcast (CMCSA) are looking at different ways to attract consumers. Such strategies include the introduction of products such as its X1 set-top box.
Comcast stated at the 2016 Wells Fargo Technology, Media & Telecom conference that it believed its X1 set-top box was instrumental in shaping consumer behavior in the pay-TV market.
Comcast pointed out that its X1 set-top box offers personalized recommendations, with ~90,000 titles provided on-demand and ~90% of X1 subscribers using video-on-demand every month. According to the company, these subscribers are viewing on-demand content for an average of 25–30 hours each month. Thus, the company expects ~4 billion hours of what it describes as “time-shifted viewing.”
As part of its strategy of offering its viewers wider content choices on multiple platforms, Comcast also stated that currently, it has 800 television shows, with its pay-TV viewers watching 150 hours of content on average.
Comcast’s X1 has improved customer retention for its video business for the past 32 consecutive months. The company has also observed that its X1 set-top box customers have better satisfaction and three times the number of DVR (digital video recorder) activations than customers without X1.
As a result, the company has observed higher ARPU (average revenue per user) from its X1 customers. In 3Q16, the company added net 948,000 new and existing customers, with ~45% of its residential customers using the X1 set-top box.
Comcast’s video business in 3Q16
In 3Q16, Comcast had video revenue of $5.6 billion, a rise of 4.5% year-over-year. This rise in revenue was mainly driven by rate adjustments, customers subscribing to higher-priced plans, and growth in CMCSA’s number of video customers.
Comcast’s video business had the best third quarter of the past ten years in terms of video customer net additions. The company added 32,000 video customers in 3Q16, compared to subscriber losses of 48,000 in the same quarter.