Comcast and Spectrum’s Streaming Aspirations Rests on a Tiny Box





The Xumo Stream Box is a small, unassuming device that both Comcast and Charter’s Spectrum have begun sending out to their subscribers in place of a traditional cable set-top box. It may also be the key to both companies staying relevant in a world where everyone is increasingly moving to streaming services.

The device, which launched earlier this month, is part of the Xumo Play streaming service that is a joint venture between the two cable giants. At the heart of Xumo is a platform that allows it to run linear channels, on-demand content and other streaming services, and can be found on smart TVs like Pioneer, streaming boxes like Roku and on the internet. That ability to run multiple services, whether its Disney+, Netflix or a YouTube TV, could be the how the two businesses navigate the transition between a world where people pay for traditional cable and a near future where most people just stream whatever they want.

Xumo’s emergence comes at a time when the cable industry is facing a crossroads, leading to some surprising blurring of businesses. Charter’s deal to include the Disney+ streaming services alongside its own linear cable channels set a precedent for how these packages could change (and is something Winfrey hinted may continue in future distribution deals). Cable companies are leaning more on broadband and becoming a pipe for streaming services, with the hope that their existing relationship with subscribers is enough to give them a lead role in picking what they watch.

“Over the past 15 years, there’s been very little to be optimistic about,” Charter CEO Chris Winfrey said on a conference call on Friday. “For the first time, I see a path where we can create value for the customer and create utility and that ultimately will enhance the value of the connectivity services we provide.

It starts with seeding its existing base with the Xumo box, giving customers who’ve yet to fully cut the cord a way to do so, but without giving up on their cable provider. There’s a familiar aspect to the box that many consumers still appreciate, but with the added capability of running different services.

“This is the bridge between linear and streaming,” said Raymond Wang, principal analyst at Constellation Research.

Ultimately, the box’s ability to run different services gives Charter and Comcast the opportunity to serve as a marketplace for a number of different services. By hosting Disney+ or Paramount+ on its platform, it could take a small percentage of the subscription from the streaming service for connecting it to one of their customers. While that isn’t enough to replace the kind of revenue it generates from cable services, it is also far more profitable since there are no programming costs to deal with.

On the consumer side, having a single box that houses all of those services, plus a Comcast or Spectrum-supplied cable TV-like streaming lineup, goes a long way to solving the fragmented world of different streaming services we face today.

The idea of a central streaming marketplace is already happening, with Amazon’s Prime Video already a central location where you can subscribe to Max, Paramount+, Crunchyroll and other subscription services, and have the content all show up in one central location. While Prime Video has been around longer than most of the newer streaming services, it’s still far behind Netflix in terms of audience. But it could become more valuable as a one-stop shop for viewers looking to see what content they have across a variety of different services.

Similarly, Apple has positioned its Apple TV app to aggregate multiple channels, from Paramount+ to AMC+, bolstering its own Apple TV+’s relatively small library of content.

Comcast likewise has high hopes for Xumo.

“We want to make sure we’re the best aggregator for streaming,” Comcast CEO Brian Roberts said on Thursday during its third-quarter earnings call. “We make it even easier for consumers to purchase and switch packages.”

Roberts emphasized this was a global play, with Sky in the U.K. and the players in Canada embracing Xumo as well. “It will be in TVs and devices all over the nation and all over the world,” he said, adding he was aware of the irony of the industry going ala carte and moving back to bundling and the back-and-forth aspect of the business.

These companies are keen to establish more of a presence in streaming because the results of their core businesses speak for themselves. Spectrum lost 320,000 TV customers in the third quarter. Comcast had it even worse, losing 490,000 TV customers and even dropping 18,000 broadband customers as 5G home internet service continues to pressure cable.

With those kinds of losses, it’s no surprise they’re looking at a future where linear TV is no longer a big part of their revenue stream.

Winfrey, for his part, believes that the traditional video business will exist five years from now. But he also understands that things will have to radically change.

“We have an opportunity to evolve to a state-of-the-art video marketplace, where we can provide that traditional linear integrated with DTC and SVOD (subscription video on demand) product for customers who can afford it,” he said. “When you get that, it’s a very valuable product, and something we’d be proud of.”

Photo credit: Xumo

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