With nerves rattled in the pay-TV industry over cord-cutting, Comcast Corp. launched this week in the Philadelphia area an $18-a-month Instant TV streaming service, a "skinny bundle" of broadcast-TV networks, PBS, and local government channels.
The monthly cost to Comcast customers will be between $68 and slightly more than $100 for mostly free over-the-air television channels, as it will be offered only to Xfinity internet subscribers. They pay $50, $75, or $85 a month for internet services after promotions, according to the Comcast website.
The lowest price for Instant TV — $68 — is based on internet speeds of 10 megabits per second, which would be too slow for most consumers. Comcast says it will offer Instant TV even at this slow speed.
Instant TV subscribers also can specialize the offering with add-ons that drive up the cost: $30 a month for sports channels, $15 for entertainment networks, and $10 a month for kids' programs.
Comcast's offering joins a crowded field of on-demand and live streaming services from Sony, Hulu, Google, CBS, Netflix, and Dish Corp. that threaten the traditional TV bundle. On Thursday, Netflix announced it would raise the price of its most popular streaming product to $11 a month from $10.
The Walt Disney Co. also says it intends to offer a streaming service that could compete with Netflix.
A proliferation of streaming services has pointed the industry into the direction of à la carte offerings in which consumers choose to purchase only networks they want instead of buying 200-channel bundles from Comcast and other television distributors.
Comcast executive Matt Strauss has said that the Philadelphia cable giant could lose up to 150,000 cable-TV subscribers in the third quarter, blaming the hurricanes in Comcast markets of Texas and Florida and competition from AT&T and Verizon. Analysts and industry insiders also say that streaming services are taking bites out of the pay-TV business.
They also warn that consumers eventually could pay more for streaming content because of the cost of the internet service and because individual streaming services don't benefit from the economics of cable bundles — pay-TV distributors can negotiate volume discounts for networks.
Comcast "is saying 'OK, if this is where consumers are going, let's provide them an option,' " Brad Adgate, an independent and longtime media analyst in Boston, said on Thursday of Instant TV.
"It seems that particularly younger folks are more likely to be cord cutters and migrating to these types of skinny bundles," Adgate said. "Comcast wants a place at the table."
Instant TV streams ABC, NBC, Fox, and the CW. While these can be obtained for free from over-the-air antennas, Instant TV enables the content to be streamed to smartphones, tablets, and laptops. An Instant TV subscriber would have to purchase a Roku streaming device to watch the channels on a television itself.
Instant TV restricts subscribers to watching two screens in a home at one time.