Netflix Is Just The Beginning
Yesterday, Comcast CEO Brian Roberts confirmed something we’d been predicting for quite a while now: Comcast’s deal with Netflix is not just a one-off, but rather the first of many deals the MVPD is planning to strike with SVOD services.
It’s a deal that makes sense for everyone involved: the streaming services get free marketing, free sales support and access to customers who may be too technologically timid to sign up for Netflix on their own.
The MVPDs get to be the good guys for once by giving users access to the networks they watch the most. They also get to keep all those potential cord cutters inside their ecosystems because even cord cutters need broadband and if you want broadband in America in 2016, you’re usually limited to one or two choices. And once the MVPDs have a customer in their grasp, it’s hard to shake them off.
The biggest winner, however, is the consumer: viewers can now watch Netflix without having to do the dreaded input switch and they even get Netflix shows in their search results.
Initially, the Comcast/Netflix deal seems pretty hands off: Comcast will allow consumers to access Netflix via the X1 set top box, but they’re not selling Netflix subscriptions (viewers are passed through to the Netflix site to sign up) and they’re not bundling Netflix and putting it in their marketing materials. (e.g. subscribe to Comcast and get three months of Netflix for free!)
This will change though. Again, it’s too good a deal for both parties to not have Comcast start billing customers for Netflix and other streaming services. The same goes for bundling streaming services together, so that Comcast can offer a double play package with broadband, Netflix and Hulu at a price point that makes getting those services on on your own a very poor choice.
One huge effect of MVPDs offering the main streaming services will be that the threat of cord cutting goes away. If you can get the streaming channels you want to watch directly from your broadband provider, what cord are your really cutting (or nevering, as the case may be.)
It’s also just as likely that the MVPDs will make the cost of said broadband + TV package even sweeter by throwing in some combination of the broadcast networks, HBO and Showtime, and dropping the price for the first twelve months of a two year deal.
That makes their service even stickier for Millennials and for everyone else, as the single-bill thing is a much bigger factor in sustaining customer loyalty than you’d think it would be.
The set-up also creates stickiness for the streaming services. As standalones, unsubscribing was as easy as checking off a box on a website. But if you’ve ever tried to unsubscribe from anything on Comcast…
As the largest MVPD, Comcast’s actions are significant and we look forward to seeing what other deals they have up their sleeve. We also look forward to seeing how soon it takes for the other MVPDs to follow suit. Our guess is those deals are all in the works and will be announced shortly.
TV[R]EV is written, curated and incubated by the BRaVe Ventures team. Find TV[R]EV on Facebook and Twitter, and sign up for the newsletter to stay up to date on the TV[R]EVOLUTION.
