Comcast Differentiates from Pay-TV Providers with X1 Platform
As the reports came in for Q1 2017, the numbers showed no change in the trend for subscribers abandoning pay-TV operators. Any yet, those same reports showed Comcast growing its pay-TV subscribers.
Some analysts, including Mike McCormack at Jeffries, attribute Comcast’s growing subscribers to the X1 video platform.
“We estimate video churn has dropped more than 20 basis points over the last two years, with every 5% of incremental X1 penetration reducing churn 2-3 basis points. In our view, the higher retention separates Comcast from the rest of the video pack. Notably, since X1 reached 30% penetration in third quarter of 2015, the company has grown market share each quarter, cumulatively adding nearly 300,000 subscribers vs. an industry loss of ~425,000,” McCormack said in a note to investors this week.
While the X1 brought subscribers a new, all-encompassing user interface that was obviously influenced by online streaming services, the more important platform enhancement was the integration of Netflix. Comcast subscribers now have convenient access through their Comcast service to the streaming provider that holds the key to many entertainment wish lists.
And yet, even as Comcast extolls the success of the X1 platform, analysts are already questioning the sustainability amid the rising programming costs Comcast is paying.