1. Comcast’s New vMVPD Service Is Looking A Lot Like The TVE App We Said It Would

It’s fun being prescient.

For a while now, we’ve been pointing out that for traditional MVPDs, the vMVPDs they’ll be introducing this year are likely to wind up being their version of TV Everywhere, those apps they tried to launch way back in 2011, but never could get enough rights from the networks to make them work.

Because what is Comcast’s $18/month Instant TV if not a TV Everywhere app that’s also sold separately?

Why It Matters

The first thing to note, is that Instant TV is not an OTT app, it’s an IP app. For the less tech minded, that means that it’s not delivered over the open internet, but rather through a closed internet protocol (e.g., IP ) which ensures a higher level of quality control. It also ensures that Comcast Instant TV is only available to customers with Comcast broadband. That’s significant in that it prevents an all out war amongst the MVPDs for each others customers and because it now makes Instant TV precisely what we said it would be: a digital version of Comcast’s set top box TV service, albeit with fewer channels.

It’s a brilliant move on Comcast’s part as they ensure that anyone switching over to their system for the lower prices and more user-friendly interface remains in the Comcast ecosystem: DirecTV Now is the only one of their current competitors that can even offer broadband to go along with their virtual service. That’s a huge advantage for Comcast, as their competitors are all at risk when their customer’s (or potential customer’s) broadband providers jacks up rates for broadband-only service while lowering rates for those who subscribe to the MVPDs vMVPD service.

At the same time, Comcast can offer Instant TV as a perk for their current set top box customers, or current set top box customers who have a certain level of service. That’s a great perk and strong customer retention tool, as it gives current set top box customers a fully formed TV Everywhere app that allows them to watch on any device they want, a TVE app that even comes with its own DVR functionality. That’s something Comcast’s competitors can’t offer (yet) and can help them in that most critical of MVPD tasks: customer acquisition.

Add in some of the other smart moves Comcast has made lately: full Netflix and YouTube integration, plus a vastly improved interface, and #ComcastSucks may indeed become a distant memory.

Four More Reasons It’s A Brilliant Move: 

1. Comcast can continue to try and upgrade these Instant TV-only subscribers, offering fuller virtual packages with more channel options (packages they can they give to set top box subscribers for free.) They can also try and get them to upgrade their broadband speed, something Comcast makes a lot more money on than pay TV.
2. As we’d laid out a while back, a deeper look into the delta between the number of subscribers ESPN lost in Q2 2017 (2.9M) and the number of subscribers the MVPDs lost in that same period (600K) reveals a delta of around 2.3M. Our TV[R]EV assumption is that those 2.3M subscribers all tried to cut the cord for good and were talked into taking the MVPDs super basic packages, the ones designed for low-income consumers that basically just have the local broadcast networks—they are the only options that don’t have ESPN. If you’re Comcast, talking these same potential defectors into Instant TV is a much better deal, as Comcast makes slightly more money from Instant TV than it does from super basic cable.
3. The price: at just $18/month, Comcast Instant TV is considerably cheaper than other vMVPDs entry level package. Now granted you don’t get much for $18—just the local broadcast networks including Univision. But the existing vMVPDs are still struggling with signing up the local broadcasters and so having all of them on a linear feed gives Comcast a big advantage. Comcast offers two add-on packages— a news and sports (CNN, ESPN et al) for and extra $30/month and an entertainment bundle with A&E, AMC, FX,  HGTV, Discovery et al for $15/month. Even with both packages, $63/month is a pretty good deal for a system that works on every device and delivers a crisp, buffer-free signal.
4. IP Delivery. We’ve been playing with some of the OTT-stye VMPDs over the past year and well, there’s still a whole lot of buffering. Not all the time, but enough so that you notice it, even with a 75 Mbps connection and nothing else running. So having a vMVPD that looks and feels like set top box delivery is going to give Comcast a strong advantage as well.

What You Need To Do About It

If you’re an MVPD, you should seriously considers following in Comcast’s footsteps: given that you are able to offer both broadband and IP delivery, it seems foolish not to take advantage of both those benefits and offer IP-based double play packages.

If you’re a network or a brand, you need to get your act together and figure out how to have the ad loads on both linear and VOD on virtual services line up with the ad loads on traditional services. We get that one is digital (for legal purposes) and one isn’t and that you don’t like change, but this is not going to end well unless you get them to line up and soon.

 

2. Amazon Goes All Orphan Black With Alexa

Amazon went full Clone Club this week, rolling out multiple versions of it’s voice-activated Echo device (aka “Alexa”) with different functionality and different price points.

There’s Alexa the bedroom alarm clock, Alexa the game button, Alexa the much better speaker than Apple Homepod for a third of the price, Alexa the home networking expert, Alexa the speakerphone and Alexa the streaming television device.

That’s a whole lot of Alexas.

Why It Matters

Unlike Los Caballeros de Cupertino, Amazon doesn’t need to make money on its hardware, In fact, the main purpose of Amazon hardware (and Amazon Prime, for that matter) is to lure people into the Amazon ecosystem and make it easy for them to remain there.

Our thinking as to the rationale for all these new Alexas is that Amazon feels their resounding market lead in this area gives them leeway to play around a bit and they’re hoping that at least one of these products sticks and grows legs—that users will find an even better use for it, at which point it will take off and Amazon can then follow up.

Side Note: As frequent readers know, we’ve been using an Echo Dot in our car with relatively good success these past few months, and Amazon’s other announcement was that Echo will now power BMW cars. (They already had an agreement with Ford.) That’s going to be a huge use case for them (if we’re any indication) because being able to shout out “Alexa, remind me to call Jeff at 3PM tomorrow!” when we think of it while driving is a huge help. Even if she does sometimes schedule it as “Gall Jif.”

What You Need To Do About It

Alexa integration into the Amazon Fire TV is getting a big boost this go round, so if you’re a network or MVPD or vMVPD, you want to make sure that integration works as well as possible.

If you’re Roku or Apple, you want to up your own voice recognition game so that Alexa doesn’t become sole the reason people buy a Fire TV.

And if you’re an advertiser, bear in mind that someone already did a commercial where Google Home started talking because the commercial gave it a command and consumers were not happy about it. Enough said.

 

3. A Note On Amazon’s Curious NFL Debut

So last night a bunch of people who probably know more about the TV industry than most: BTIG’s Rich Greenfield, Decider’s Mark Graham and Scott Porch, Yahoo Sports writer Daniel Roberts, AdPerceptions’ Justin Fromm and TV[R]EV’s own Alan Wolk were on Twitter trying to figure out what was going on with Amazon, CBS and the ad load.

The thinking veered from “Amazon is selling the same local ads the MVPDs normally get (two minutes out of every hour)” to “Amazon might get to sell as many as 10 ads per hour” to “wow, Amazon is running different ads on its Roku app than it is on its iPad app” to “wow, Amazon is running a completely different feed on its Roku app than it is on its iPad app.” (The latter point was particularly baffling: iPad and browser Amazon had one feed, Roku another—different shots, different angles. No idea what was going on.)

In a more transparent world, this would not be such a mystery.

Your move, Amazon.