There are so many different ways to be a CordCutter, but internet access is a must for almost every option available. Often people will switch from a bundle of TV and Internet to an internet-only plan, and then add the streaming devices and services they need to watch what they want online. The biggest internet provider wants to help users with that, but they may want more in return then it seems at first.
Comcast will now include a free streaming device called Xfinity Flex with any Internet-only subscription. Previously, users had to pay $5 a month for the Xfinity Flex, which is based on Comcast's X1 platform. $60 a year was far from a bargain for a 4K streaming box with some WiFi and smart home controls, especially when most features could be found in sticks with only a one time cost. Free feels like a more appropriate price, especially considering the potential motivations of Comcast's move.
In mobile gaming, free-to-play has emerged as a popular and profitable way for a company to have a successful game. These can be good games like Clash Royale, which allows players to purchase faster upgrades even though gameplay stays the same. They also can be frustrating games, where paying is the only way to advance or complete the game. "Game of War" is cited by a lot of gamers as an example of this pay-to-win model. If you don't pay up in these kinds of Freemium model games, they stop being fun quickly.
The Xfinity Flex is the Free-to-Press-Play step in Comcast's plans to have a bigger part in the future of television. The streaming box is like a little sibling of the bigger X1 cable box. It can run streaming apps, including Netflix, Amazon Prime, YouTube, Pandora, DAZN, and more including Hulu coming soon. The Flex also has Wi-Fi controls, including displaying the password, using parental controls, and pausing devices so the kids know they're really in trouble. It can show your security camera feeds and find your smartphone, with an important catch we will get to later. Biggest of all, Flex gives Internet-only subscribers access to thousands of on-demand shows and movies for free . This feature is so big, we should start there.
Back to Cable
Those 10,000 free shows and movies sound very similar to the benefit offered to Comcast cable subscribers, and I should know because I used to be one. If the Xfinity Flex can get internet-only customers the same shows, movies and guide offered in their paid TV service, the distance between the two sides can't be too far. In fact, the two sides of Xfinity are connected.
Comcast announced that, beginning this Fall users can upgrade to a full cable TV subscription right in the on-screen guide. How convenient, especially for Comcast. Everyday they can have internet-only customers using and relying on a device that can convert them to the bundle. These free shows and movies can be the taste, or the grind of the game to convince players to buy the expensive season pass. In the end, some streamers may end up back at cable and the Flex makes that more likely than a Roku or Apple TV.
Peacock Coming, Ya'll
Not every Xfinity Flex user will end up deciding to go back to cable, but Comcast's strategy with the free Flex doesn't end there. It may be more than coincidence that the Flex became free the same week that Comcast announced their streaming service would be named Peacock . They also announced many of the shows, movies and originals the service would offer.
Peacock enters a crowded field, where it's expected to compete with other new services like Warner Media's HBO Max , Walt Disney's Disney+ , and even Apple TV+ . It will even have to compete for attention and dollars with Netflix, Hulu and Amazon Prime Video. It's doing all this with a different business model, as it will be included with ads for cable subscribers and available as a stand-alone subscription too
That's a lot for a new service to take on, even if it is stocked with movies and big names shows like "The Office". One way to get a leg up is to be the featured service on streaming devices. That's easily done when the company controls the box. Freemium games pop up offers to sell players coins, upgrades and lives constantly while they are playing. It's a safe bet that customers will see the Peacock app a lot, and a paid Peacock subscription will be a remote button away.
The Xfinity Flex won't be just about Comcast's TV efforts, so let's look at the other features it offers, and that catch mentioned earlier. It will let customers see their security cameras, control their WiFi and find their smartphone using their remote. Pretty cool, for users and for Comcast.
This is where the micro-payments of the Freemium model come in, and the user needs a regular fix. That security camera feature isn't built to work with Ring or Nest. Instead, buy some coins and sign up for Xfinity Home Security($). Want to save money and buy your own compatible modem instead of renting from Comcast? It's very likely you'll lose the WiFi controls. Want to find your smartphone using the Flex? Are you an Xfinity Mobile customer? You see where this is going.
The free Xfinity Flex can only be used to the fullest if you add other paid Xfinity services. Similar to a pay-to-win game, players won't get far without paying more through in-app purchases. In the end, will users still be internet-only customers?
A new form of contract
Even if an internet-only subscriber manages to resist the siren songs of Xfinity's other paid services, Comcast can get one other big benefit from the free Flex. Customer retention is another key, and the Flex can work a lot like a contract. The purpose behind the contracts Comcast loves to offer isn't just to lock in your price; it's also to lock you in as a customer. So why say the Flex is a new form of contract?
If your home streaming service is setup with Roku devices, you can switch internet provider with ease. You won't need to buy all new equipment to keep streaming. If you own your own WiFi router, you might not even need to change any passwords. However, with Xfinity Flex, the box is unlikely to work on another internet provider. If you do decide to switch boxes, how long will it take, and how much will you spend to be ready to switch?
Any speed bump or barrier that makes customers think twice before switching makes it more likely that some of them won't switch. Freemium games regularly remind users of things they've already accomplished, or what they are close to achieving. This helps players feel like they would lose something, like the crops they've planted, if they stop playing. Anything that locks customers in to a service, with a cost to get out of it sure feels like a contract.
Other revenue in B2B
Comcast has other ways to recover the $5 a month they lose by making the Xfinity Flex free. Beyond everything already mentioned, and money from other apps or digital rentals and purchases, they can profit on the business to business side too.
Comcast licenses their X1 technology platform to other cable providers, and that earns money for the company. Beyond licensing fees, they have a larger base of users to gain insight from using data, and have more leverage in negotiating apps for the platform. Now, they can license the Flex technology as well. Cox has already begun offering a box based on the Flex tech called Contour Stream . It can work like a game publisher who turns a popular app into a game engine that they can sell. This will help them further expand their reach, and amplify all of the benefits listed above.
Flex the Future?
Will the Xfinity Flex be enough to take market share away from Roku, Amazon or the other streaming hardware makers? I don't believe so. Will Comcast eventually offer an over-the-top version of Flex than can stream on any network? Not without a seismic shift in the landscape. Could the Flex X1 apps expand enough to offer YouTube TV or AT&T TV Now? Don't bet on it.
But I can see a world where it picks off exactly the kinds of customers big cable wants. Persuadable customers who go internet-only, but want things simple and integrated are the ones most likely to take this, and most likely to convert to more paid services. Keeping them, and increasing how much they pay will be worth far more than the cost of the free device. Like a freemium game, with the right kind of customers the free Flex could earn enough other payments to end up on the Top Grossing list.
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