Commentary

Obamacare, Netflix, Skinny Bundles And Comcast

Coming next week, Comcast cable subscribers will be able to access their Netflix subscription through the Comcast X1 set-top box. That is big news for an over-the-top content maker that led the charge against Comcast’s ill-fated merger attempt with Time Warner.

But that was then. That was before there were a variety of skinny bundle alternatives to fat providers like Comcast, and before the FCC began pushing the idea of creating some real competition in the cable set-top business.

Each and every cable customer pays an average $231 to rent cable boxes from their providers. It won’t happen this year, but the FCC seems poised to open up that market; timing probably depends on the next occupant of the White House.


The Netflix-Comcast accord, as it is called by absolutely no telecommunications insiders, will give consumers the ease of turning from cable television to Netflix without dealing with the HDMI input which can be mighty annoying if you have a perfect life. On X1, it will also mean a user can say, “Give me Netflix” and it will happen. Cool, Alexa.

This could be so beautiful that far from hiring those hit men they might have thought of a couple years ago, maybe someday Comcast and Netflix could marry. I didn’t start that talk. It was Barrons.com that asked “Is a Wedding in Comcast’s and Netflix’s Future?”  

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For Comcast, some say, that means users will identify the cable company with Netflix, to Comcast’s economic advantage. For Netflix, the ease of that channel switch for consumers and presence in at least half of Comcast’s 22 million homes, should lead to new subscribers. Or, as it’s been theorized, it should lead to existing customers using their Netflix subscription more.

“That will increase word of mouth,” Neflix CEO Reed Hastings explained on a investor conference call a while ago. And that will increase the subscriber base. Hastings has to hope it works exactly that way. A few months ago, Netflix missed its new subscriber target by 30%.

I have my own theories. Comcast and all cable companies are, as noted earlier, up against the wall with skinny bundle peddlers.
And then there’s this. No matter what people think of Obamacare's exchange, health insurance monthly costs are going to increase in some states, by 22% next year. Subsidies will help, but for people who make too much, Money.com predicts insurance will cost individuals as much as $2,000 more a year.

That’s the kind of sticker shock that makes even the most torpid household budget-minder sit up and take notice. And that could be bad news for cable, because it’s the one place it’s now possible to cut way back without being totally media-less. Unlike bad times during the recession, nowadays there is at least good hunk of TV offered by skinny bundles.

That’s why this Netflix hook up helps Comcast, and I’d bet others, that will soon be forced to really up their game to stay in the game.

Further down the food chain, what happens to those dear apps on your “other” HDMI input? Netflix has always been good for bringing customers into the OTT Mall.  What happens to Acorn and Curiosity Stream and Crackle and a zillion others when connected TV consumers aren’t shopping at HDMI 2?  

Does Hulu, with its package of old TV, Showtime and a skinny bundle of its own starting soon, become a central player? We’ll see.  

pj@mediapost.com
1 comment about "Obamacare, Netflix, Skinny Bundles And Comcast".
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  1. J S from Ideal Living Media, November 8, 2016 at 12:03 a.m.

    Great article. I've been wondering about the impact of skinny bundles, etc., too. When will infrastructure and media companies accept that whatever can be done, which offers benefits to potential users, will be done. They can drag their feet and complain, but it'll still happen, so it's better to get in on things before its too late. 

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