Comcast's Strauss: 'We have to be surgical with our video strategy'

On the same day that Comcast (NASDAQ: CMCSA) finally launched the anticipated trial of its IP-based "Stream TV" service in Boston, the MSO's video chief, Matt Strauss, laid out his company's vision for video services to investors at the Wells Fargo Securities Technology, Media & Telecom conference in New York.

"We want to grow video subscriptions," Strauss said, only hours after the CEO of a much smaller cable company, Cable One's Thomas Might, called video services, on the same stage, to be a "dog" and a "mature business."

While Comcast reported its best video subscriber metrics in nine years last month, it's still losing video customers. To get back to growth mode, Strauss said, Comcast is going to have to adjust to the "changes in how people are consuming video."

"Our platforms need to be more surgical in how we segment customers," he said. "We need to give the customer the right platform at the right time, in some cases the right time in their life."

As an example, he said, Comcast is pitching college students on its low-margin, IP-only Xfinity on Campus product, with the hope that as they mature and move into family life later on, they'll upgrade to Comcast's full X1 cable platform. "It's really about putting things in the market to attach customers to video with belief you can upgrade them later to other services," Strauss said.

About 30 percent of customers who subscribe to Comcast's skinny "Internet Plus" bundle upgrade their package after one year, Strauss said.

The $15-a-month Stream, which only includes broadcast channels and HBO, and is targeted to mobile devices is, for example, "a mobile-first product," Strauss said. "It's probably not something a single-family home with kids is going to find valuable. And we have to be surgical in how we advertise those products. We're not going to run national TV commercials for Stream."

Despite clear declines in ratings for linear TV, Strauss said that it's equally clear to Comcast that consumers are watching more video than ever. 

"The way I would characterize it is, it's like dark matter," he said. "There's all this video out there that's not being measured."

Comcast strongly believes, Strauss added, that continuing to grow the company's extensive on-demand programming library will address this scattered audience, with viewership of shows often "over-indexing" on Xfinity On-demand. Simply put, Comcast is finding that a lot of the "lost" linear audience is embracing its on-demand programming.

However, getting programmers to embrace on-demand has been a challenge. Strauss said the breakthrough came when he convinced NBCUniversal CEO Steve Burke to allow him to do some trials with NBCU programming.

For example, for the USA Network series Playing House, viewers were enticed to see the next episode free, and on-demand. These on-demand presentations included full ad loads, meaning there was less lost adverting to USA based on DVR viewing. 

"What we did was we flipped the model," Strauss said. "We gave customers an incentive not to see it on DVR."

For more:
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