Commentary

Will Cable-Centric Distributors Take On Roku, Amazon Fire TV?

Traditional pay TV providers, such as cable TV operators, seem to be tiptoeing around the idea of looking more like Roku and Amazon Fire TV of the industry.

For example, Comcast’s Xfinity Flex, which started as a small set-top box where apps/streaming platforms deliver content, might get into the space more aggressively.

Originally, it was an add-on of sorts for Comcast’s still growing broadband-into-the home service. Flex started by offering movies and TV shows, as well as access to some streaming services. Then it began licensing out the service to other cable operators, including Cox Communications. Currently, it has 3.5 million subscribers.

But now it is mulling expanding the business further, such as getting onto smart TVs as platforms for all types of streaming -- akin to what set-top device/platforms Roku, Amazon Fire TV, Apple TV, Google Chromecast, have been been doing.

Flex’s business model is already similar to revenue share deals for apps/streamers that run on its platform. Again, something Roku, Amazon Fire TV and others also do.

Right now, Xfinity Flex is generating $2 a month in average revenue per active user (ARPU) -- which is far lower than what Roku generates per user, closer to $70. Xfinity Flex’ ARPU doesn’t account for any advertising revenue.

No doubt Roku and Amazon Fire TV have big head starts -- over 50 million monthly active users each. But considering the decline of the traditional cable TV video business, it is something Comcast and others has been musing for a while. Perhaps offering a bigger broadband package that includes basic internet service.

Why not muse a little faster? Comcast, as well as other cable TV operators, continues to get strong revenues from just offering broadband service itself -- the basic, bare bones of what all digital media companies depend on.

But what will the future bring? Broadband service scale in the U.S. will end sometime. And then companies will be looking for new business line extensions.

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