Shaw Communications of Canada is bagging an original plan to develop an IPTV service to instead try out X1, Comcast’s IP-capable video platform that uses a cloud-based interface for set-tops and mobile devices.
Shaw revealed plans to move ahead on a trial of Comcast’s platform Thursday in its fiscal third quarter earnings statement, which also noted that the Canadian MSO is taking a $55 million write-down of IPTV assets following its decision to abandon the original plan. Shaw said that it started to deploy an end-to-end IPTV solution in 2013, but paused in late 2014 to conduct a review and to assess other options.
“We are always exploring new ways to enhance our video experience and deliver next-generation services to our customers,” Shaw CEO Brad Shaw said, in a statement. “We are currently working with Comcast to begin a technical trial of their cloud-based X1 platform and be the first in Canada to capitalize on Comcast’s cloud technology. X1 offers customers a seamless experience across multiple screens and devices both in and out of the home.”
If Shaw -- which lost 24,524 cable video subs in its fiscal Q3, giving it 1.88 million -- decides to move forward with X1 on a commercial basis, it would mark a significant win for Comcast’s X1 licensing efforts, which were expected to pick up steam after Comcast walked away from its proposed merger with Time Warner Cable in April.
Before it tried to buy TWC, Comcast had seemed eager to license X1 to other operators, but those conversations appeared to slow after Comcast and Time Warner Cable announced the proposed merger. With TWC now out of the M&A mix at Comcast (Charter Communications is now trying to buy TWC), Comcast is expected to seek licencing deals that could help it drive more scale into the X1 platform and the devices that power it.
A commercial deployment by Shaw would also serve as welcome news to RDK Management LLC, the joint venture of Comcast, Time Warner Cable and Liberty Global that is managing the Reference Design Kit (RDK), a preintegrated software stack for IP and hybrid QAM/IP devices. Comcast's X1 platform uses the RDK.
Shaw, which also offers satellite TV services to about 851,569 subscribers, is the second MSO to publicize its interest in licensing X1.
Cox Communications has been kicking the tires on X1 as it pursues a next-generation “future-state” video project. Kevin Hart, executive vice president and chief technology officer at Cox, said in an interview in April that the MSO has completed a successful technical lab trial with X1. A Cox spokesman said then that the next step would be to test X1 with Cox employees.
“We've also made very good progress from the technical trial [with X1] and have the platform up and working properly, so that has great promise,” Hart said at the time.. “We're also looking at two or three other platforms with some other providers in the industry.”
Shaw joins a growing list of Canadian MSOs that have scotched their original IPTV plans. In 2014, Cogeco was hit with an impairment of C$32.2 million tied to an alternative IPTV project that encountered “performance issues.” Cogeco abandoned that plan and instead moved forward on a deal with TiVo.