M+E Connections

CEO: Comcast Still Searching for Profitable OTT Option

The impact of over-the-top (OTT) services, including the “skinny” bundles offered by a growing number of companies, was among the main subjects discussed by media executives at the MoffettNathanson Media & Communications Summit in New York May 18-19.

“We haven’t seen a model yet that is profitable” for Comcast, Neil Smit, CEO and president of Comcast Cable, said May 19 of OTT services. But Comcast realizes that there will continue to be new ways to deliver content and “we don’t want to be caught short-sighted,” so the company continues to weigh its options, he said. One major issue is that most OTT services require Comcast to provide service to customers outside of its cable TV footprint, and the company still sees the best return on investment from servicing customers inside its footprint of nearly 55 million homes who subscribe to Comcast services, he said.

“It’s not clear yet what the package will be” and how long it’ll take to get significant support from content providers, he said of the virtual multiple system operator (MSO) service that Hulu plans to launch sometime next year. Hulu, which is owned by Comcast’s NBC Universal, along with Disney and Fox, will provide entire broadcast and cable channels to consumers for a monthly fee as part of that plan. Hulu now only provides reruns of individual shows from those channels.

Comcast Cable sees “pros and cons” to providing its Xfinity TV app to multiple devices that include Roku set-top boxes and smart TVs from manufacturers including Samsung, he added. One plus is that “we widen our addressable audience by getting our app out on different devices,” he said. The company, on the other hand, prefers that consumers access its content and services directly from it rather than a third party — in part because it can use its recommendation engine to steer viewers to other Comcast content, he said.

There is a “modest” amount of cord-cutting, “cord-shaving or cord nevers” among U.S. TV viewers because although the “uber” bundle remains attractive to most people, it’s not appealing to everybody, said John Martin, CEO and chairman of Time Warner’s Turner division. Turner has channels on both Sony’s PlayStation Vue and Dish Network’s Sling TV OTT services and is looking to participate in others. Turner wants to be represented on “all of those packages of networks” and is “having constructive conversations with numerous companies,” he said without naming any of them.

As he did on a May 10 earnings call, Disney CEO Bob Iger told attendees at the MoffettNathanson Summit that he’s seen encouraging results for ESPN on PlayStation Vue and Sling TV. “In today’s world, in the United States, you can’t launch a new multichannel platform or bundle — whether it’s, by the way, 30 channels or whether it’s 150 channels — you can’t do it successfully without ESPN,” he said May 18. “You can do it, but the numbers will not even be close to what they would be with ESPN in,” he said.

Comcast Cable, meanwhile, is confident that its DOCSIS 3.1-powered gigabit internet service can support Ultra High-Def (UHD), Smit also said May 19. “We feel very good about Ultra and 4K,” but virtual reality (VR) delivery is “still TBD” because it’s not clear how much bandwidth that requires, he said. “The network is very flexible and capable,” he said, pointing out that the company has “upped our feeds 17 times in the past 15 years.”