Over-the-top streaming services like AT&T’s soon-to-launch DirecTV Now will vie for the niche segment of the market that doesn’t currently have pay-TV and are not a threat to cable’s core video offerings.
That was the essential takeaway put forth by NBCUniversal CEO Steve Burke today, when asked during Comcast’s third-quarter earnings call about the competitive threat represented by an emerging crop of virtual MVPD services.
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“The real promise of OTT is incremental subscribers,” Burke said. “I think we have a healthy degree of skepticism that these new OTT entrants are going to create millions and millions of subscribers anytime soon. The fact is, most people find plenty of value in their cable and satellite subscription and aren’t going to change anytime soon.”
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Burke made these comments less than a day after AT&T revealed a $35-a-month loss-leader price point for its V-MVPD service, DirecTV Now, which has more than 100 channels.
The aggressive price point seems to be a clear indicator that AT&T is targeting Comcast’s video market share at a time when the cable company has turned the tide on satellite carriers and is now once again growing its pay-TV business. Comcast reported the addition of 32,000 pay-TV subscribers in the third quarter compared to a loss of 48,000 in the third quarter of 2015. It was Comcast’s best video subscriber performance in 10 years for the third quarter.
For his part, Comcast Cable CEO Neil Smit, speaking alongside Burke today, said the MSO will continue to develop its X1 video platform, which he believes is driving its video business growth.
“I think there's going to be more flavors and more competition, but we'll compete aggressively,” he said.