As I watched my Roku investment get smaller today, I considered, “what’s in this for Comcast?”
Comcast is now going to give away hardware to base internet customers (short version of the announcement).
What does it mean for Comcast?
- They supply hardware to their lowest tier customers for free (internet only). One bedroom apartment watching TV on PC now connecting to TV on wall. (good value for customer)
- Maintain hardware – bios updates, firmware – honestly, no biggie for Comcast. They are a hardware company.
- They have a TV operating system to connect customers to maintain. Should be ok. They are a technology company. Will it be best of breed. Unlikely.
- They have order management and tech support of hardware – not funded by hardware sales. Could be a problem.
- Will customers upsell? (add a box) If I add a TV, maybe but not likely. Customers will get a pre-installed package from Roku or Samsung or will have an old Fire TV stick lying around (free)
- Uh oh. Now a content company (Peacock) wants to control distribution. Don’t they ever learn? Does Fire TV want to cut a deal for Peacock? Nah. Apple? Nah. You get the idea.
- Scale – Comcast has good business. But it’s limited geographically. It won’t have 2-3% of the market in Smart TV operating systems. (read – Roku has a deal with WalMart. Will Walmart consider dumping it for a Comcast OS? Hardware? Never.)
Best they can hope for is a small part of a small part of the market.
To illustrate look at the xfinity availability map.
Roku is of course the whole map, without even thinking about the globe.
An Xfinity Flex box is included, along with the Xfinity Voice Remote, at no additional cost as part of an Xfinity Internet-only subscription. Additional boxes will be available to lease for five dollars per month per box (limit of two boxes per customer).
Limited to two boxes per customer and the free one is only for inter-only subscriptions.
All good points. Now taking the conversation to any/all content providers such as APL, DIS, AMZN, NFLX etc. flooding the marketplace with their own version of a simple Firestick…because I agree that people like simplicity w/o cords, etc. perhaps it’s simplified further with just an app that allows viewers to stream either to just their content or to all content providers. If they control traffic with their version of app, firestick, etc, they have a virtual tollbooth that may get a shave of the advertising dollars that flows through their tollbooth, or they keep the advertising shave they would have given to ROKU.
Point being, it would seem that while ROKU comes with +/- 30% of Televisions, what about the iPads, cell phones and the other 2/3 of televisions? Big picture without getting metric-specific, sure seems IMHO that TTD is a better bet than ROKU when considering TAM of streaming, radio and other news outlets.
Is Roku another TiVo?
Great idea, but not enough of a moat to keep the bigger players from moving beyond what Roku offers?
What does Roku offer that can’t be duplicated by a big, or many bigger fish?
Is this a case of Roku’s success costing them in the longer term as their business model is easily bypassed by others that see how profitable the business model really is?
I don’t know, but for now I agree that playing the TTD side of this is the safer play.
One interesting note, Roku hit its 50 DMA today. The 200dma is way way down around 78 bucks, so the rise YTD has been almost straight up until now.