Past Telogical Talks
Welcome to Telogical Talk, a weekly series where we analyze a slice of the competitive intelligence data collected by the Telogical research team.
When Comcast announced new Xfinity packages this month, the inclusion of Netflix garnered all kinds of media attention.
Treating Netflix like a premium channel included in the bundle price was only part of the story. Comcast also removed equipment for additional TVs from the newly-introduced Super Triple Play, a change from the package it displaces, the HD Complete XF Triple Play, which included receivers for up to three TVs.
The shift away from bundling equipment for multiple TVs has precedent. AT&T had aggressively bundled WH-DVR plus three client boxes with its DIRECTV packages, but in November, the company shifted course-- opting to reduce the advertised price of the core video product and allowing receivers to return to a variable line-item on a customer's bill.
Comcast also reduced the price of it's new, fully-loaded triple play, partly by pushing equipment costs down the bill. Very few video providers remain that bundle additional TV equipment. What's happening here?
Data
Vintage analog cable boxes sell on Etsy as collectibles.
For one thing, the number of TVs in U.S. households is on the decline. Government surveys may not be timely, but even old data reveal a pull-back in the number of traditional TV sets. Fewer than 4 in 10 households had 3 or more televisions in the most recent survey, and that number will shrink as more customers use laptops and tablets to watch "TV" in bedrooms and kitchens.
Meanwhile, getting video service to additional TV sets has gotten easier with the advent of inexpensive streaming devices. Consumers can consider a variety of options to purchase outright that compare favorably to the price of leasing a device from a traditional MVPD.
Chart: Streaming Device Cost vs. STB Lease
Popular streaming device purchase prices expressed as a monthly price (12 months)
Discussion
For those who have been around the industry long enough, the "rent-versus-own" equipment conversation harks back to the ill-fated CableCard.
But unlike CableCard, which pre-dated IP video and offered a crippled version of existing service, streaming devices open the door to the entire app-based video ecosystem. Within a 12-month window, only an Apple TV carries a higher price tag than renting a typical set-top box. An Apple TV, however, delivers much more functionality than a typical receiver, as do less-expensive options from Roku and Amazon.
Will inexpensive consumer devices push STB rentals aside completely? Currently, in a multi-TV home, whole-house DVR with client receivers offer the strongest unique value-proposition for proprietary set-top boxes over streaming devices. But that advantage appears to be shrinking, as OTT competitors advance cloud DVR features.
At Telogical, we’re always studying the competitive landscape. If you have a topic you’d like to discuss with us, please reach out. We look forward to working with you.