MATT STRAUSS: When we first launched our on-demand platform more than a decade ago, it was initially designed and developed around making transactional and pay-per-view content more accessible. If you were to go back in time, you would see we were actually the first distributor to realize the platform presented a much bigger opportunity to add more value to the video subscription by giving customers access to their content on demand.
Today, over 90% of all content available on demand is free and included with our video service, and over 70% of our customers are using the platform every month. We have extended that philosophy to other platforms, like TV Everywhere, and you will continue to see us support various models, which are either free to the customer or ad supported.
How are you expanding your ad-supported business?
We are focusing on providing advertisers and programmers with better interactive and addressable tools that will create new ad models and monetization opportunities. We have also become a meaningful player in the digital ownership landscape, with millions of our customers purchasing content through our digital store. Electronic sell-through allows our customers to purchase and own digital content with just a click of the remote, and access those purchases across devices. We will continue to evolve that platform as well.
What’s the immediate impact of unbundling on distributors, cable operators and advertisers?
We are clearly focused on X1 (cloud-based DVR system) … [to give] customers personalized, seamless access to all of their entertainment choices in a rich, visual and immersive guide. The data we are seeing from X1 gives us confidence that we are moving in the right direction, both through reductions in voluntary churn as well as increases in on-demand consumption.
It has also helped contribute to our quarterly results, coming off the best second quarter we have had in nine years. That said, we also acknowledge there are changes in viewing behavior, and you will see us continue to experiment with different products and services. Whether it is delivering services to students through our Xfinity On Campus program or introducing new products like Stream, which will allow an existing Xfinity Internet customer to instantly subscribe and access a skinny video bundle across devices in the home via an IP Gateway, for us it is about casting a wider net and getting the right product to the right customer at the right time.
A lot of broadcasters talk about scaling VOD. What does this mean and what are the challenges?
Historically, one of the challenges facing the VOD platform was the lack of consistency. Customers didn’t always know what shows would be available, how many episodes would be available or when they would show up on the platform. In many ways that created a lack of predictability, which was not an ideal customer experience. We’ve spent the last few years refining and improving the VOD offering and today, we offer the top 100 Nielsen-rated shows on demand across platforms. We have also been a driving force in the shift from the traditional VOD offering of four or five episodes of a particular show, to now offering every episode of a series in season. We now offer hundreds of series fully stacked on demand.
How much has it grown?
TV is now the top-viewed category on demand, accounting for over 50% of the total viewing on Xfinity On Demand, with consumption increasing over 100% in the past three years. And you will continue to see us make on demand better and more predictable. One of the things we have been testing is Instant On Demand, where we collapse the window even further and offer the content on demand immediately after its initial live debut. We are even testing early windows with a USA Network series called “Playing House,” where new episodes are airing a week early on demand before their live premiere. We think that on-demand, while it's a technology we helped introduce more than a decade ago, is actually now accelerating at a pace faster than we have ever seen before.
What are you prioritizing in TV Everywhere planning?
TV Everywhere has gone through various phases. Initially, the focus was on unlocking the content and ensuring our customers had access to a robust programming catalog. Today, you would be hard-pressed to find a network that is not offering content for TV Everywhere consumption. We currently deliver movies and TV shows from over 100 networks for on-demand viewing across devices anywhere in the country and have thousands of titles that a customer could download for offline viewing.
Are you unifying logins across your various services?
The next phase is focused on improving and simplifying authentication. This area has faced several challenges, but we have taken material steps to simplify the process and you will continue to see us innovate on this front. For example, customers can now log in using Facebook Connect, opt in to “Remember me” to stay signed in for 30 days on a rolling basis, remain signed in when traveling from website to website through a process called "Single Sign-on" or create credentials and reset passwords using the last four digits of their Social Security number and their telephone number, where historically they would have had to know their account number. And for double-play customers, we’ve enabled auto-authentication in the home, in which case they do not need to sign in at all.
How has mobile impacted this?
When we first announced TV Everywhere back in 2009, the tablet did not even exist. TV Everywhere was initially designed around the PC before anyone was streaming video to Internet-connected devices. When you take a look at the landscape today, we authenticate nearly 20 different platforms from smart phones, tablets and computers to Internet-connected TVs, game consoles and … devices like Apple TV, Roku and Amazon Fire.
This interview has been edited for length and flow.