Shaw: Why We're Testing Comcast’s X1

Seeking Scale, Shaw Would Be Hard-Pressed to Develop In-House
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Highlighting the need to build scale across its company, Shaw Communications execs shed more light Thursday on why the operator has opted to trial Comcast’s cloud-based X1 platform and scrap an original plan to deploy its own soup-to-nuts IPTV system. 

“As we look at the complexity of this roll out [of IPTV], it’s hard to imagine for us that we could have done something like this on our own, like our first effort was in this area,” Jay Mehr, Shaw’s executive vice president and chief operating officer, said on the company’s fiscal third quarter earnings call.

“Scale is a key factor in our business, particularly as we enter the world of next-generation video,” company CEO Bradley Shaw said of the decision.

Shaw, he added, “used to be an engineering-driven company that built stuff. We used to be the aggregator. And we’re not that anymore. We’re now a customer-centric organization defined by customer experiences. And when you look at it, the Internet has changed everything in this new world and we need scale.”

With that as the premise, Shaw is now “committed to getting scale through industry solutions that are partner-led. And Comcast is an example of that… and a proof-point of this strategy.”

As Shaw moves forward over the next year, “you’re going to see a variety of announcements from us that prove that this relationship is the right way and these relationships are the right direction for this company,” Shaw said.

Shaw has not yet decided to go with a full rollout of X1, but Mehr said the X1 angle with Comcast represents “a very capital-friendly program.”

He noted that Shaw will launch only boxes that Comcast has in production for X1, envisioning a 40% savings in the MSO’s CPE equipment. Comcast has been basing X1 deployments on a hybrid IP/QAM HD-DVR, but has also developed an IP-only HD client for multi-room setups called the xi3, and recently announced it’s working on a 4K-capable box called the xi4, and is developing the xi5, a device that will support high dynamic range (HDR), an emerging format that supports a wider palette of colors and brighter pixels for both HD and 4K video.

Additionally, Shaw’s anticipated architecture “will strongly leverage Comcast’s video cloud,” meaning that Shaw would not have to duplicate it in Canada, Mehr said.

“It’s fair to say that we are trialing…all elements of the Comcast X1 platform and that includes those elements that are in production today and [in the] future,” Mehr said. “So, I think you can look at the partnership as a rich and deep partnership and the trial is a broad one.”