Comcast To Battle Cord Cutting By... Reinventing The Closed Cable Box

Like many cable operators, Comcast continues to slowly bleed cable TV customers to cheaper, more flexible streaming alternatives (aka cord cutting). The industry just saw its biggest ever quarterly loss of such subscribers in history, with Comcast losing 106,000 subscribers during the third quarter alone. It's a trend that's directly thanks to the industry's refusal to not only compete on price, but flexibility and openness.

You'll recall that Comcast (with the US Copyright Office's help) played a starring role in killing plans at the FCC to bring more competition and openness to the cable box. The cable industry hauls in $21 billion in cable box rental fees annually, so their motivation here should be obvious. The combination of limited cable box competition and the walled-garden approach to content also lets these companies keep would-be competitors at arms' length, helping to "protect" existing customers from the temptation of cheaper, more flexible programming options.

Realizing the company had to do something to address the rising streaming threat, Comcast has been doing things like adding Netflix to some cable boxes in the hopes that would keep its existing customers from cutting the cord. And, in last week's news, it emerged that Comcast would soon be launching a new streaming device for its broadband customers that actually lets users view not only Comcast's cable TV content, but that of some competitors. Again, the hope is that adding a few additional options will prevent users from fleeing to alternative options.

Of course this being Comcast, you won't actually be able to install whatever you like on it, just like a... cable box:

"The product isn't quite a direct competitor to Roku or Apple TV because it won't allow customers access to hundreds of apps, including streaming TV bundles like AT&T's DirecTV Now or Dish's Sling. Those services are direct competitors to Comcast's video bundle, and Comcast wouldn't be able to push its own video service to its broadband-only customers if it allowed them access to those bundled OTT services. Comcast hasn't decided the exact number of apps that will be accessible through the device, said the people."

Comcast doesn't appear to have gotten the message that openness is the future. Streaming services now operate on an ocean of third-party hardware that (with some caveats like piracy) largely allows users to install whatever app or service they'd like. That's even more true of custom-built media center PCs. It looks like Comcast is attempting to justify the closed-nature of the device by throwing in some additional internet of things functionality (read: "we had to lock this device down for security purposes"):

"Rather, Comcast wants the device to be the hub to the connected home, they said. In addition to aggregating streaming apps, the device will also allow customers to control anything that's connected to the Internet, including thermostats and smart-locks."

Still, a walled garden by any other name...

Granted this being Comcast, there's sure to be some additional caveats (like price or rental fees) at launch. Given Comcast's past actions on this front, it wouldn't be shocking to see Comcast exempt owners of its own hardware from broadband usage caps given the death of net neutrality rules.

Of course that brings us to Comcast's ace in the hole when it comes to battling cord cutting: limited broadband competition. Limited competition means bullshit usage caps and overage fees can be imposed on user lines without them being able to vote with their wallet. Such caps and fees not only let Comcast counter lost TV revenues with broadband price hikes, but simultaneously punish and profit from users who wander too far off-script to enjoy "non-sanctioned"competing products while using a Comcast broadband connection.

Between locked down hardware and the death of net neutrality, it's a good bet Comcast is hoping it won't have to compete quite as intensely on openness, flexibility, and price as the streaming wars truly accelerate.