Pitching to young video consumers
Comcast’s (CMCSA) Xfinity Instant TV could help the company kill two birds with one stone. This Internet-based video service, which is designed to appeal to Millennials, is expected to roll out more broadly before the end of this year.
Xfinity Instant TV is viewed as Comcast’s response to declining pay-TV subscriptions. The company lost 45,000 residential video customers in 2Q17, implying a steeper loss than a year ago when it shed 21,000 residential video subscribers.
Although Comcast gained business video customers in the latest quarter, the gain was smaller than a year ago, implying a tough business environment for pay-TV providers.
OTT is shaking up pay-TV foundations
AT&T (T) and Dish Network (DISH) have also reacted to the loss of pay-TV subscribers by launching their own Internet-based video services to compete with OTT (over-the-top) video providers such as Netflix (NFLX), Amazon (AMZN), and Sony (SNE).
OTT subscriptions have been growing at the expense of traditional pay-TV, leaving pay-TV providers with wounds to lick.
Potential boost to broadband business
While Xfinity Instant TV could stem the loss of video customers for Comcast, the service could also help the company generate more broadband revenue. OTT services such as Xfinity Instant TV rely on high-speed Internet connection for smooth streaming. As such, the launch of Xfinity Instant TV could lead to an uptick in demand for Comcast’s high-speed Internet service.
Comcast’s high-speed Internet sales rose 9.2% to $3.7 billion in 2Q17, as shown in the chart above.