Comcast To Sell Netflix Subscriptions In False Belief This Will Slow Cord Cutting

from the good-luck-with-that dept

Tue, Apr 17th 2018 6:28am — Karl Bode

As we've noted previously, Comcast has enjoyed a little more resilience to the cord cutting threat than satellite TV and telco TV providers--thanks to its growing monopoly over broadband. As DSL users frustrated by lagging telco upgrades switch to cable to get faster speeds, they're often forced to sign up for cable and TV bundles they may not want (since standalone broadband is often priced prohibitively by intent). Of course that doesn't mean these users or stick around (or that they even actively use the cable subscription they pay for), but it has helped Comcast all the same.

There are some indications that advantage isn't helping as much now that we're seeing so many streaming services come to market. At least one Wall Street research firm predicts that Comcast's cord cutting defections will double this year, though those totals still remain modest (400,000) compared to the company's total number of pay TV (22.4 million) and broadband (25.5 million) subscribers.

In the hopes of slowing the slow but study climb in cable TV defections, Comcast has announced that it will soon begin bundling Netflix subscriptions with its existing services, in what it claims is a quest to provide "more choice, value and flexibility":

"Netflix offers one of the most popular on demand services and is an important supplement to the content offering and value proposition of the X1 platform,” said Sam Schwartz, Chief Business Development Officer, Comcast Cable. “Netflix is a great partner, and we are excited to offer its services to our customers in new ways that provide them with more choice, value and flexibility. The seamless integration of Netflix with the vast Xfinity entertainment library on X1 present a unique and comprehensive experience for customers."

There's no indication yet whether Comcast will sell Netflix at any kind of discount. Still, the move isn't likely to help Comcast stop what's become an obvious example of market evolution. Customers looking for actual "choice, value and flexibility" pretty consistently find that's not something they get from traditional cable, thanks in part to Comcast's relentless rate hikes and hidden fees. Since most of these customers are ditching cable due to having to pay $130 or more per month, even a discounted subscription to Netflix isn't likely to help.

Of course Comcast still has an ace up its sleeve: usage caps and overage fees. The company's slow and steady deployment of these arbitrary, unnecessary and punitive limits will allow Comcast to (ab)use a lack of broadband competition to not only counter reduced TV revenues by jacking up the price of broadband, but to punish customers who choose to wander outside of Comcast's walled gardens.

After all, Comcast's own streaming services don't count against the company's caps, while Netflix's service does. And should Comcast and the FCC survive legal challenges to the net neutrality repeal, there's not much to stop Comcast from using a lack of adult oversight on this front to brutal, anti-competitive advantage.

Thank you for reading this Techdirt post. With so many things competing for everyone’s attention these days, we really appreciate you giving us your time. We work hard every day to put quality content out there for our community.

Techdirt is one of the few remaining truly independent media outlets. We do not have a giant corporation behind us, and we rely heavily on our community to support us, in an age when advertisers are increasingly uninterested in sponsoring small, independent sites — especially a site like ours that is unwilling to pull punches in its reporting and analysis.

While other websites have resorted to paywalls, registration requirements, and increasingly annoying/intrusive advertising, we have always kept Techdirt open and available to anyone. But in order to continue doing so, we need your support. We offer a variety of ways for our readers to support us, from direct donations to special subscriptions and cool merchandise — and every little bit helps. Thank you.

–The Techdirt Team

Filed Under: bundles, cord cutting, streaming, videos
Companies: comcast, netflix

34 Comments

If you liked this post, you may also be interested in...

Reader Comments

Subscribe: RSS

View by: Time | Thread

Ninja (profile), 17 Apr 2018 @ 5:26am

Usage caps, crappy service and other abuses will slowly drive the deployment of workarounds such as municipal broadband. They may enjoy some time of dominance and profits through this behavior but it will come back to bite them. Of course there's the fact that the US will have to live with last century broadband a while longer so the faster Americans wake up and start bashing them and voting their puppets out the faster they will get better stuff. One has to wonder how much is enough to fire up people. I'd guess we need much more abuses.
[ link to this | view in thread ]
Vidiot (profile), 17 Apr 2018 @ 6:10am

In other news, Titanic passengers are issued Dixie cups to help bail out the boat in case of leaks.
[ link to this | view in thread ]
Anonymous Coward, 17 Apr 2018 @ 6:44am

Bundling is something that Comcast understand, and they will use usage caps to force people to buy bundles on cable to get the Internet streaming services they really want.
[ link to this | view in thread ]
Anonymous Coward, 17 Apr 2018 @ 7:00am

smells like merger
Could this be just a warmup exercise for the upcoming NBC-Universal-Comcast-Netflix merger?
[ link to this | view in thread ]
Anonymous Coward, 17 Apr 2018 @ 7:11am

This will wind up being more expensive than signing up through Netflix directly once they add some BS below-the-line fee.
[ link to this | view in thread ]
MDT (profile), 17 Apr 2018 @ 7:35am

Cut Cord
Recently we got irritated at Dish (We called up to get a Hopper 3, and they insisted we pay them $100 for the privilege of paying +$2 more per month to rent the hopper 3 over what we'd been renting). Got annoyed, and went out and bought 3 ROKU's and dropped DISH and replaced it with Sling and CBS All Access, along with an upgrade on our internet to unlimited. Cost us half as much as Dish. As usual, Dish treated an existing customer like garbage (And I've been a customer for over 20 years!). A new subscriber would not have been charged for the H3.

Not nearly as easy to use as Dish was, however, for $70 a month savings, I can deal with some less user friendly interfaces. Although I'm about ready to drop HULU thanks to their horrible new interface (who the *$*#$& came up with that piece of #$(*$&).
[ link to this | view in thread ]
Anonymous Coward, 17 Apr 2018 @ 7:38am

Re:
They have already added extra cost, the cable subscription wrapped round the Netflix subscription, and with data caps, they can make it the only way to reliably stream Netflix.
[ link to this | view in thread ]
discordian_eris (profile), 17 Apr 2018 @ 7:44am

"And should Comcast and the FCC survive legal challenges to the net neutrality repeal, there's not much to stop Comcast from using a lack of adult oversight on this front to brutal, anti-competitive advantage."

There hasn't been adult oversight of the broadband/cable monopolies for decades. As usual in Washington, it's not red/blue problem. It's the legalized bribery and allowing private parties to write legislation. Regulatory capture is only a problem because congress refuses to make it near impossible. No one who has ever served in the government should be allowed to lobby - ever. No lobbyist should ever be allowed to serve in the government - ever. No one who works in a particular industry should ever be allowed to work in a government position where they have any control over or contact with their former industry.

If Congress ever found it's spine, it could put a stop to all of this in just a few years. I don't foresee that ever happening. And if by some miracle it did, I'm sure that the Supreme Court would find it unconstitutional.
[ link to this | view in thread ]
Agammamon, 17 Apr 2018 @ 7:59am

<blockquote>As DSL users frustrated by lagging telco upgrades switch to cable to get faster speeds,</blockquote>

What network upgrades are there that would allow telcos to compete with cable on speed? DSL? There are limits to how fast that's going to get you. Its competitive in rural areas where cable broadband is still slow - I get 5mbps from by DSL ISP vice 6 from the cable ISP (Spectrum). Yeah, I know - its all slow out here, but then again,I *chose* to live in the middle of nowhere.

As far as Comcast's 'growing monopoly', I'm not seeing it. The only time I've ever been limited to a single ISP choice was living in an apartment in San Diego - several ISP's served the area but the *apartment owners* limited residents to using a single specific ISP/cable company (not one of the big ones like Comcast).

<blockquote>they're often forced to sign up for cable and TV bundles they may not want (since standalone broadband is often priced prohibitively by intent)</blockquote>

That doesn't make any sense.

If the internet price is discounted in a bundle - but the bundle price is still higher than internet by itself, then you don't buy the bundle if you don't want cable, you just buy internet standalone.

If the bundle price is same or lower than internet by itself, then you buy the bundle, get cable for free - even if you don't use it.

Who is forcing you to buy cable service in order to get cable internet? Don't tell me its because the price for internet in the bundle is lower than the standalone price - that's the equivalent of bitching about a 'buy 3 for the price of 2' sale.

I live in a rural county and outside the one city here, there's 100,000 people and I still have a choice of at least 3 non-satellite ISP's. If you're limited to only one, consider that that might be because your municipality is limiting competition.
[ link to this | view in thread ]
Agammamon, 17 Apr 2018 @ 8:03am

Re:
The adult oversight is *you*.

The only way, absent government force, for a company to create and maintain a monopoly is to keep prices low enough that its not profitable for another competitor to come in.

The instant they raise prices about that point, competitors show up - unless your local government stops that from happening.

You don't like what your ISP/cable company is doing, don't cry for someone else to provide 'adult supervision', get out there and cancel your subscription. This isn't water service - you can live on mobile internet if you need to.
[ link to this | view in thread ]
Anonymous Coward, 17 Apr 2018 @ 8:27am

Re:
That is slow, as in rural Scotland I get > 3M Bytes, which is > 24M bits via DSL.
[ link to this | view in thread ]
Anonymous Coward, 17 Apr 2018 @ 8:49am

Re:

What network upgrades are there that would allow telcos to compete with cable on speed? DSL? There are limits to how fast that's going to get you.

"VDSL2 permits the transmission of asymmetric and symmetric aggregate data rates up to 300+ Mbit/s downstream and upstream on twisted pairs using a bandwidth up to 35 MHz" ref.

That's the normal upgrade path for DSL providers: drop a VDSL cabinet (DSLAM) on every block. It's common to get 50 Mbit (10 Mb upstream) in Canada and the UK, via DSL. The USA has fallen so far behind that it might end up like Africa there--skip over an entire generation of technology and replace it with something new: fiber. (Landlines weren't widely deployed in some areas of Africa, so they went straight to cellular phones+internet.)

Some US telcos did start to deploy fiber, until they gave up. But there always seems to be a catch--e.g., no public utility regulation (and no CLEC alternatives) if your phone access is over fiber.
[ link to this | view in thread ]
kog999, 17 Apr 2018 @ 8:50am

dumb
so the plan is to introduce cable customers to netflix. A platform without any commercials, full seasons of shows on demand you can watch anytime, exclusive shows and movies. Once customers get over the fear of "Internet TV" maybe they will start looking into other services like hulu or amazon. How long before they realize cable sucks and they can get their content elsewhere for cheaper.
[ link to this | view in thread ]
Anonymous Coward, 17 Apr 2018 @ 8:52am

Re: Re:
It's not a fair comparison. The United States is more than 100 times the size of Scotland. What counts as rural in Scotland does not count as rural in the US.

https://mapfight.appspot.com/scotland-vs-us/scotland-united-states-size-comparison
[ link to this | view in thread ]
Anonymous Coward, 17 Apr 2018 @ 9:11am

Re: dumb

How long before they realize cable sucks and they can get their content elsewhere for cheaper.

That assumes that they can get unlimited broadband, rather than capped broadband and streaming services outside the cap if they buy a bundle that include cable.
[ link to this | view in thread ]
Anonymous Coward, 17 Apr 2018 @ 9:20am

Competition
There is no "anti-competitive advantage" if you have no competition.
[ link to this | view in thread ]
Anonymous Coward, 17 Apr 2018 @ 9:30am

Re: Cut Cord

Although I'm about ready to drop HULU thanks to their horrible new interface (who the $#$& came up with that piece of #$(*$&).

Seriously. Someone (or a bunch of someones) over at HULU need to get fired over this. They took a sucky UI and made it horrible. So bad I don't even bother with it any more though my wife still puts up with it.

Pure garbage.
[ link to this | view in thread ]
Anonymous Coward, 17 Apr 2018 @ 9:38am

Re: Re: Re:

It's not a fair comparison. The United States is more than 100 times the size of Scotland.

It's sometimes a fair comparison. Size doesn't matter, the population density of the deployment site matters. Area covered by other telcos or no telcos doesn't count either. People have compared individual US states to individual European countries, of similar size and density, and still found the USA lacking.

FWIW, Wikipedia says Scotland is 78,772 km^2 with density 67.5/km^2, which closely matches South Carolina: 82,933 km^2 and 62/km^2.
[ link to this | view in thread ]
Thad, 17 Apr 2018 @ 9:41am

Re: Re:
Ah, the old "If you don't like it, just stop using broadband Internet" argument.

As always, my response is "You first."
[ link to this | view in thread ]
Anonymous Coward, 17 Apr 2018 @ 10:13am

Re: Re:
Tell that to anybody that makes a living off of youtube. Tell that to anybody that hosts any kind of game server. Better yet, just tell that to anyone that works as a Sysadmin.

The result is all the same... They laugh at you and start glaring when they realise you aren't kidding.
[ link to this | view in thread ]
Agammamon, 17 Apr 2018 @ 10:16am

Re: Re: Re:
I don't have a problem with my service - which is why I'm neither complaining about it nor seeking to get the government to threaten to use violence on my behalf.
[ link to this | view in thread ]
Agammamon, 17 Apr 2018 @ 10:17am

Re: Re: Re:
Tell that to the guy running a business in rented office space - he's pissed off that rent is eating into his profits too.
[ link to this | view in thread ]
Not.You, 17 Apr 2018 @ 10:22am

Re: Re: Re: Re:
This is a no dumb zone. Please do not dumb here.

You may as well be arguing that people who are mad at their local electric company to stop using electricity.
[ link to this | view in thread ]
Anonymous Coward, 17 Apr 2018 @ 10:32am

Related: House Energy and Commerce Hearing

… allow Comcast to (ab)use a lack of broadband competition…

The House Energy and Commerce Committee, Subcommittee on Communications and Technology hearing this morning (Apr 17, 2018) scheduled for 10:15am EDT, actualy started almost 20 minutes late.

From Core to Edge: Perspective on Internet Prioritization

YouTube (hearing begins after 19 min mark).
[ link to this | view in thread ]
Killercool (profile), 17 Apr 2018 @ 10:33am

Re: Re: Re: Re:
Does the guy renting his office space have the ability to find a different landlord? Because in Houston, your options for internet "landlords" are Comcast, who is trying to lower the ceiling (cap) in all the houses, and satellite, who keeps insisting that their RV is just the same as a stick-built house.

Then again, why don't we all just start using snail mail? It's only a little bit slower than dial-up.
[ link to this | view in thread ]
Thad, 17 Apr 2018 @ 10:44am

Re: Re: Re: Re:

I don't have a problem with my service

Then be quiet and listen to the people who do. You might learn something.
[ link to this | view in thread ]
Anonymous Coward, 17 Apr 2018 @ 10:47am

Re: Re: Re:
Even Lewis has a decent Internet connection, and it sits there off the north west corner Of Scotland.
[ link to this | view in thread ]
Anonymous Coward, 17 Apr 2018 @ 11:32am

Re:
Where I live...

Internet alone 69.99 monthly (after initial 3 months at 29.99).

Cable TV $34.99 monthly + Internet @ 29.99 (when bundled)... so technically cable is 4.98 more than just internet (not counting cable box rental, wi-fi router rental, etc, so total bill bundled ends up being over $100.00.

I cut cable 2 years ago and would ditch their internet if there was ANY other reasonable competitors (aging telecom DSL and some fly-by night microwave broadcast type internet are the only other options).

The City actually cancelled their internet from our local cable company and installed their own fiber network due to the cost (but did nothing to prevent the cable company from jacking costs for the remaining customers), and while the city's fiber offering sounds reasonable, it only reaches about 20 downtown businesses (due to lack of funds to build out the network... hampered from other types of public/private partnerships due to laws purchased and written by the cable industry).
[ link to this | view in thread ]
Jinxed (profile), 17 Apr 2018 @ 11:49am

"There's no indication yet whether Comcast will sell Netflix at any kind of discount."
Discount? Comcast doesn't understand the definition of the word.

Comcast will "sell" Netflix for $49.99/mo., remove its Zero Rating protection, impose a new 100GB monthly cap, and charge customers for using Netflix, which can easily surpass 100GB monthly usage.

Anything Comcast announces should be treated as having an ulterior motive which "discount" is not applied.
[ link to this | view in thread ]
Anonymous Coward, 17 Apr 2018 @ 11:52am

Heres $10.99 Netflix for FREE with Comcast*

*Convenience fee of $29.99 applies

Seriously FUCK comcast and their shitty ways.

Taking bets they DELIBERATELY slow their version of Netflix as if to say "see? netflix is poor quality...stay with us"
[ link to this | view in thread ]
Anonymous Coward, 17 Apr 2018 @ 12:08pm

Re: Re:

The only way, absent government force, for a company to create and maintain a monopoly is to keep prices low enough that its not profitable for another competitor to come in.

That can still result in very high prices. The nature of a natural monopoly is that there's an inherent advantage to being first. A competitor could offer much cheaper prices, if they had already paid the fixed infrastructure costs. If you have to build an infrastructure first, in a market where an incumbent exists and can use predatory pricing to undercut you, they'll have to be really overcharging for the math to work out.
[ link to this | view in thread ]
Anonymous Coward, 17 Apr 2018 @ 12:17pm

Re:

Taking bets they DELIBERATELY slow their version of Netflix as if to say "see? netflix is poor quality...stay with us"

More like they slow Netflix for those who do buy the cable package that includes it, and lower data caps at the first opportunity, while the bundled Netflix does not count towards the data cap.

This move is all about countering the falling cable subscriptions by giving people a reason to subscribe to a service they do not want ore use.
[ link to this | view in thread ]
Anonymous Coward, 17 Apr 2018 @ 1:02pm

Re: Re:

(not counting cable box rental, wi-fi router rental, etc, so total bill bundled ends up being over $100.00.

Why rent a wi-fi router? It's under a hundred bucks to buy a decent one outright, or $50 for a cheap one, or thrift stores always have a bunch for $5-$10.

VDSL modems are cheap too. Cable modems are often available but not quite as cheap, maybe $200.
[ link to this | view in thread ]
Anonymous Coward, 17 Apr 2018 @ 2:38pm

Re:
"This will wind up being more expensive than signing up through Netflix directly once they add some BS below-the-line fee."

What we should all keep in mind is that even a 45 cent increase, times 22.4 million suckers, is $121 million a year for these scammers.
[ link to this | view in thread ]