Flex helps keep Comcast broadband subscribers, executive says

A picture of the Comcast logo on the front facade of a retail building.
The Comcast logo is seen on a retail store in Sacramento, California on July 3, 2015. (Photo: Matthew Keys/Graphic: The Desk)

Comcast’s streaming TV box may not have deep market penetration, but it’s helping the cable and broadband company keep customers, an executive said at an investor’s conference last week.

The company’s Internet-only customers have the option to lease a Comcast-developed streaming TV box called Flex as part of their service. One box is leased to customers for free, while a second box is available for a small fee.

The box runs a modified version of Comcast’s X1 operating system, which powers the company’s next-generation TV set-top boxes. And like X1, Flex carries most of the popular streaming services out there — including Netflix, Hulu, HBO Max, Amazon Prime and YouTube — while missing a few niche services that some customers might want.

But the biggest reason for customers to take Flex is that at least one of those boxes is required on an account for Internet-only subscribers to get free access to the premium version of Peacock, the Comcast-powered streaming service that launched last year. Without Flex, Comcast’s Internet-only customers have to pay the same $5 a month fee that non-customers pay for premium access to Peacock. (A limited free tier is available to non-Comcast customers and non-Flex households alike.)

That perk might have been enough to convince around 3 million Internet-only households to grab a Flex box last year, according to data released by the company. And those who are taking the box appear less likely to switch to a competitor.

“Flex gives us the ability to get the same churn-reduction benefit (of) being at the end of the pipe and providing a service,” Michael Cavanaugh, Comcast‘s chief financial executive, said at a conference last week, adding that the churn rate for Flex subscribers is 15 percent to 20 percent lower than non-Flex households.

“It can’t be a bad thing when you think about the 30-million-plus customer relationships we have,” Cavanaugh said. “It’s not an abandonment of our other video strategies. I would say it’s a complement to our broadband strategy.”

If Internet-only customers do want to subscribe to a video service — to watch in-season sports or to stream cable news — it’s as simple as logging on to Comcast’s website or making a call, because Flex offers access to Xfinity Stream, a streaming-only version of Comcast’s video bundles.