Cable Operators

X1: The Rocket Fueling Comcast Growth

Rollout of next-gen platform a big focus for Comcast Cable CEO Smit 12/12/2016 8:00 AM Eastern
TakeAway

X1, Comcast’s state-of-the-art video platform, has played a key role in the MSO’s positive video sub growth story.

Related > 'MCN' Exec of the Year Neil Smit: No Team, No Dream [subscription required]

 

With the prospect of its first full year of positive video subscriber growth staring it in the face, Comcast can point to many factors that have helped push the operator over the hump, but none perhaps with as much impact as its state-of-the art operating platform, X1.

 

Comcast introduced X1 in 2012 and to date it is available in about 45% of the cable company’s footprint, reaching 50% by the end of the year. With X1, Comcast customers get a state-of-the-art user interface, cloud digital video recording, home-streaming capabilities and other features, like an interactive voice remote. Those features have proven to be popular with customers.

 

For the cable company, the X1 architecture allows it to more easily overlay new services and products, essentially via software downloads from the cloud.

 

X1 also is having a big impact on customer retention and the uptake of new services. Customers of the platform are less likely to churn, DVR take rates for X1 users are about 3 times that of non X1 customers and X1 users are twice as likely to buy pay-per-view products.

 

FROM PLANS TO REALITY

Comcast Cable CEO Neil Smit said that X1 was still in the planning stages when he joined the company in 2010, adding that the platform dovetailed nicely with Comcast’s emphasis on video and the renewed focus on the customer experience.

 

In its final iteration, X1 had all the bells and whistles associated with new technology rollouts. But Smit said that at its core, X1’s message is simple.

 

“We invested in X1 and the on-demand content and the different platforms at a time when there was not a lot of significant investment going on,” Smit said. “Video is about great content but also about ease of discovery of that content — if you have great content and make it easy to find and you bring up new recommendations of things. We believed from the beginning we could achieve that.”

 

X1 was a collaborative effort from the beginning, Comcast executive vice president and chief operating officer Dave Watson said.

 

“One of the first things he did was prioritize the list,” Watson said in an interview. “We had so many things going on, a lot of promising things that were emerging post the early stages of DOCSIS — more VOD, all the standards we had invested in. The infrastructure stuff was for the most part coming to an end, but the product stuff was not. That’s where Neil came in and helped prioritize. X1 was at the top of the list.”

 

Watson added that in addition to X1’s chief architect — technology president Tony Werner and his team — Smit brought in other disciplines and executives to help shape the product.

 

“One of the things Neil did, he included [Comcast chairman and CEO] Brian [Roberts] in a lot of the early iterations of feature design,” Watson said. “A lot of others that were engaged — the marketing team, the rest of Tony Werner’s engineering team, there were a lot of people that were very focused.”

 

That sense of collaboration has been part of Comcast’s DNA for years, Watson said, but it was especially evident in the formation of X1.

 

INCLUSIVE PROCESS

“It goes back to that belief that an effective team gets better results,” Watson said. “You don’t roll out things at scale of this magnitude without having great teams on it.”

 

That kind of collaboration also led to one of the X1’s most popular features, the voice remote. The remote, which allows customers to search for shows and launch apps with voice commands, is one of the most popular features of X1. To date, about 10 million voice remotes have been deployed to Comcast customers.

 

Watson said Roberts championed the voice remote. “The engineering team had developed the capability, but Brian was focused on [the idea] that this could be special,” he said. “Neil then brought it to a whole other level. Neil got with his team and said, ‘Let’s scale this.’ And that’s what happened.”

 

Comcast recently incorporated the Netflix app into the X1, allowing for subscribers to the SVOD service to more easily access it. While that may have been unheard of several years ago — Netflix is considered a cable competitor by some — Smit said it fits in with Comcast’s overall philosophy.

 

“We’re all about saving the customers’ time,” Smit said. “Their time is precious and we have to respect that. The Netflix integration was saving the customer’s time; it was making it more convenient for them. They didn’t have to switch over to input B, they could just speak into their voice remote and say ‘Find Orange is the New Black.’ It was grounded in making the customer’s life more convenient and saving them time.”

 

The X1 has received rave reviews: Geekwire called it an “Escalade,” referring to the high-end Cadillac SUV. And Comcast doesn’t plan to keep the operating system to itself. It has already licensed X1 to two cable operators, Cox Communications in the U.S. and Shaw Communications in Canada, and hopes to add more licensees in the future.

 

WORKS FOR COX, TOO

At Cox, which markets X1 as New Contour, the platform has lived up to and exceeded expectations, executive vice president of product development and management Steve Necessary said.

 

Cox began rolling out New Contour in one market with 3,000 customers at the beginning of the year; by April, it was deployed in all 21 of the cable operator’s territories. By the end of the year, Necessary said Cox expects to have nearly 600,000 New Contour customers.

 

Because Cox has had the product less than a year, the operator hasn’t seen the full impact of the platform yet. But he said the company has seen a reduction in early life churn and customer satisfaction has risen. Necessary said New Contour has resulted in higher Net Promoter Scores — a more than 20-point lift for X1 users. And VOD usage has roughly doubled for X1 customers.

 

“The metrics we have to date are very positive and support or exceed our business expectations,” Necessary said. He expects the growth trajectory in 2016 to continue into next year.

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