Please ensure Javascript is enabled for purposes of website accessibility

Here's How Comcast Plans to Control Your Tablet

By Daniel B. Kline – Mar 12, 2016 at 11:00AM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The company has purchased one of its partners in a bid to improve its X1 offering.

Comcast (CMCSA -1.98%) wants all of your attention.

The cable company already has over 22 million cable customers, making it second in its industry to only the combined of AT&T (NYSE: T) and its relatively recent purchase, DirecTV. That's an impressive potential audience for the top cable company, but Comcast wants more.

The company does not simply want to control its users' experience on their primary screens: cable-connected televisions. It wants to extend that to second screens: the tablets and smartphones that can enhance the viewing experience.

This isn't a new idea. Show creators and cable companies have long recognized the opportunities created with deeper content immersion through integrated second screen experiences, but a new acquisition shows Comcast is getting serious. The company has purchased OneTwoSee, a start-up based, like Comcast, in Philadelphia.

The deal will help Comcast improve the second-screen experience on its X1 platform, specifically when it comes to sports.

Why buy OneTwoSee?
Comcast has been working with OneTwoSee for over a year, and the company has been encouraged by the results.

"In the past year, we've worked with them to reengineer our X1 sports app -- initially launched with the platform to help fans check scores, standings, and schedules for games -- into an interactive and immersive companion experience giving fans more data and statistics than ever before," wrote Preston Smalley, Comcast's VP of Product, Sports and X1 Apps, in a blog post.

Those efforts have led to a "fivefold" increase in usage of the X1 sports app in the winter of 2015, according to Smalley, who noted that it's now used by one in four X1 households on a weekly basis.

"All of this could not have been possible without OneTwoSee," he wrote. "Today's news puts us on pace to continue to redefine how fans watch sports by bringing together the best product -- X1 -- and innovative technology minds and OneTwoSee's powerful stats visualization platform all under one company."

The X1 app can serve as a second screen while watching the game. Image source: Comcast. 

Why is this good for Comcast?
There are two clear reasons Comcast wants to enhance its second-screen offerings. The first is, of course, ad revenue. If a cable customer is watching an NFL match-up on a network not owned by Comcast, the company doesn't make additional money from whatever ads he or she sees during the game. If that person consumes content through X1, whether its on a tablet or a phone, that content can be monetized.

The second reason to improve X1 is that it can be a differentiator for Comcast, which is especially relevant now that the DirecTV purchase has made AT&T a competitor in all of its markets. The second screen experience is still an add-on, a sort of customer bonus now, but as more people use it, they will become loyal to the experience and less willing to give it up in order to save a few bucks.

Eventually, if consumers respond to them, all cable providers will offer robust second-screen experiences. For now, though, Comcast has a chance to deliver something unique to the market that sets it apart from not just AT&T, but also the idea of cutting the cord.

Building out a robust second screen experience could help Comcast retain customers. Doing so using a company that it now completely owns helps build that competitive advantage and keep it away from rivals looking to follow. Buying OneTwoSee is just a small piece of a big plan for Comcast, but it's an important one that shows the direction it plans to take to not only hold onto customers, but also to make more money from them going forward.

Daniel Kline has no position in any stocks mentioned. He generally considers one screen enough. The Motley Fool has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Stocks Mentioned

AT&T Stock Quote
$18.75 (-1.42%) $0.27
Comcast Stock Quote
$35.15 (-1.98%) $0.71

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.