Comcast is pitching a new low-cost, broadband-plus-TV bundle designed for consumers who have shunned or canceled traditional cable TV, using HBO as a key enticement for those who don’t want to pay for a full package with other cable channels like ESPN, Fox News or TNT.
The nation’s No. 1 cable operator confirmed that it has launched a trial offer of “Internet Plus,” which includes broadcast TV, video-on-demand, HBO (and HBO Go) and 20- or 25-Mbps broadband. Subscribers also get access to Xfinity Streampix, Comcast’s Netflix-style multiscreen VOD service with several thousand TV shows and movies.
The bundle is priced at $39.99 or $49.99 per month for 12 months (depending on market), which is $15 less than the starting price for bundles with Comcast’s expanded basic cable lineups. The price goes up to $69.95 monthly after the first year. The limited-time offer is being promoted across Comcast’s footprint to new residential customers, but may not be available in certain areas.
Under FCC rules, pay TV providers are required to offer premium services like HBO on a standalone basis in conjunction with broadcast basic. What’s notable about Comcast’s Internet Plus promo is that it leads with broadband as the primary service and touts any-screen access to TV shows — a pitch intended to persuade customers inclined to take broadband-only service a reason to buy a TV package (albeit a smaller one).
The MSO’s pricing for Internet Plus also is much lower than what it would cost for a similar package of services from other providers. For example, Time Warner Cable offers broadcast basic, HBO and 30-Mbps broadband for a promotional rate of $79.99 monthly.
Comcast insiders insist the marketing offer, which expires next Jan. 31 in some markets and July 31 in others, is just a trial and doesn’t presage a move toward pure a la carte. Indeed, part of the strategy is aimed at upgrading subscribers to cable TV tiers down the line.
Time Warner CEO Jeff Bewkes said at an investment conference last month that the company was open to the idea of packaging HBO with a broadband offering from cable and telco operators — as long as they also offer pay TV to consumers.
Comcast’s Internet Plus service is not a broadband-only streaming video play: Subs must have a Comcast set-top. Meanwhile, the MSO is prohibited under federal regulations from offering cable channels like HBO without also including broadcast nets, referred to as the “B1” tier in industry parlance.
Comcast had 21.8 million video subscribers as of the end of June, down 342,000 from the year prior.
HBO execs, for their part, have repeatedly disavowed plans to offer HBO Go as a direct-to-consumer service, stressing the go-to-market benefits of pay TV distribution.
In a statement, the premium cabler said the offer “recognizes the popularity of HBO’s programming and brand. For those consumers that prefer this type of package, we are thrilled HBO is being made available to them in this way.”
At the same time, Netflix is in talks with Comcast and other other cable operators including Time Warner Cable and Cox about potential distribution deals that would include access to Netflix’s service through cable set-tops. Netflix CEO Reed Hastings said on the company’s earnings call Monday that he was “hopeful” it could reach pacts with Comcast and others.
Comcast’s launch of the broadband-plus-HBO promotion was reported Thursday by DSLReports.com.