StreamSaver is a new streaming bundle including Peacock, Netflix, and Apple TV that available exclusively to Xfinity customers, in the same way that Xfinity mobile services are only available to Xfinity customers.
But it might be reasonable to suggest the new bundle will boost Peacock and Apple TV market share by only single digits.
Netflix, Amazon Prime are the clear leaders leaders, with Disney (Disney, Hulu, coming ESPN service) poised to emerge at the top as well. All the others remain well into secondary or tertiary roles, and the new bundle likely cannot move the needle very much.
Of course, Comcast might see the value not so much in Peacock market share growth (Comcast owns Peacock) but in the value of customer acquisition and retention for its overall subscription businesses (mobile service, home broadband, linear TV).
As with Comcast's mobile phone service, the new bundle can be purchased only by existing Comcast customers (home broadband or linear video service). So the effort is primarily to increase the value of Comcast services.
As often is the case with bundles, the value is partly the price. The advantage of product bundles for the end user (aside from the bundles of features) is almost always the lower price. Streamsaver features the ad-supported versions of the services at $15 per month, where the a la carte prices of those services cost between $6 and $10 a month each.
A reasonable question is how many accounts, and how much revenue, that new service could attract.
Perhaps the easiest assumption is that Xfinity customers who already buy Peacock, Netflix and AppleTV+ will be most inclined to switch. Perhaps next most likely to adopt are Xfinity customers who already buy one or two of those services (Netflix as the presumed anchor and leader) and who can be convinced to the other services.
The other issue is that the new bundle can only be purchased by Xfinity customers buying either home broadband or Xfinity linear video services. And that means the bundle can likely only be considered by people living in roughly half of U.S. homes.
The potential market issues can be illustrated by Comcast’s similar approach to selling mobile phone service.
The context is that Comcast will only sell the bundle to its existing fixed network customers. Since the Comcast fixed network might only reach 45 percent of U.S. dwellings, that puts an upward limit on accounts.
Then the issue is how much market share Comcast can take from the mobile market leaders (Verizon, AT&T, T-Mobile) that collectively have about 97 percent of the installed base of customers.
In the third quarter of 2023, Comcast’s Xfinity mobile service had about six million accounts, with revenue growth near 25 percent per year.
According to the CTIA, there are 523 million mobile devices in the U.S. market with 97 percent of adults owning a mobile phone. Using a (definition of “adults” as those 18 or older, the U.S. Census Bureau estimates that in 2020, adults represented 78 percent of the total population, or 258.3 million people.
If 97 percent of those people have mobile phones and service, that implies something on the order of 250.55 million accounts. If correct, Comcast has an installed base of about two percent of the market.
The U.S. Census Bureau estimates there were around 140.7 million housing units in the United States in 2020, about 90 percent occupied. So assume dwellings with people living in them at about 126.6 million, with an average occupancy of 2.5 people, for a total of 316.58 million potential mobile accounts. Assume 97 percent have such accounts, for an implied subscriber base of around 307 million, excluding separate business accounts.
So the installed base of accounts might range from 250 million to 307 million. Assume Comcast’s network passed about 57 million homes (including small business accounts, that figure could reach 80 million locations, by some estimates. Assume it continues to sell exclusively to its own customers. Assume that its installed base of customers is about 55 percent of homes passed (customers buying internet access or video services).
That suggests terminal adoption ranging from 31.4 million to 44 million locations. If each location features 2.5 accounts, that implies a theoretical terminal customer base of perhaps 78.5 million to 110 million accounts.
Those figures are the theoretical maximum, keeping in mind that the leading mobile service providers today have installed bases in the 30 percent range each. According to Statista, in May 2023, mobile market shares were:
Verizon: 34.9%
AT&T: 32.2%
T-Mobile: 29.5%
Other Carriers: 3.4%.
Many observers believe Xfinity therefore will not reach terminal share as high as 55 percent, even within its own service territory, as its fixed network reaches perhaps 45 percent of occupied homes. So with the present policies, Comcast cannot sell to 55 percent of the market.
With those conditions, were Comcast to reach relative parity with any of the leading mobile service providers, it might hope to reach a ceiling of about 14 percent total market share (assuming 30 percent as a reasonable share within its sales territory, representing 45 percent of locations).
The new streaming bundle will face the same geographic limitations as does mobile service. On the other hand the streaming market still is growing, and is not mature, as is mobile service. And, obviously, the attraction of the bundle--for Peacock and AppleTV--is the potential to increase share in a market dominated by Netflix, Amazon Prime and Disney.
But the bundle also increases the range of products and value for Xfinity customers. Right now, it is hard to say whether ultimate value comes from growing Peacock share or increasing the value of the Xfinity service overall (reduced churn, for example) or serving as a means of supporting higher revenue per account.
It might be reasonable to assume all three sources of value will be in play. There are lots of moving parts, though, as most of the other leading or contending streaming firms also are moving to create bundles.
The coming Disney and Warner Bros. Discovery bundle combines Disney+ with Hulu (including both ad-supported and ad-free options) and Warner Bros. Discovery Max content.
Also, a new sports streaming service featuring content from Disney (through ESPN), Fox, and Warner Bros. Discovery, Venu Sports, also is launching. Unknown at this point is whether the coming ESPN streaming service will be available as part of that bundle.
The differences are that StreamSaver can only be purchased by Xfinity customers. The other bundles can be bought by any U.S. consumer.
Still, the streaming bundles seem to suggest that Netflix and Disney could emerge as the tentpoles of the business.
