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Are the Comcast-Charter X1 talks dead in the water?

Comments today by Charter Communications Chairman and CEO Tom Rutledge suggest that talks about licensing Comcast's X1 technology for a Flex-like product are going nowhere fast. Instead, the exec appears to be much more interested in a strategy that centers on Charter's own set-top platform and other third-party streaming platforms.

That's a bit of a turn from roughly a year ago, when Rutledge confirmed that Charter was in talks with Comcast about developing a video streaming product for broadband-only customers that is similar to Xfinity Flex, a smart home/streaming platform that supports a wide range of OTT apps, cross-app search, voice-based search and navigation. Comcast has deployed about 2 million Flex boxes so far.

"It's an interesting idea… We're considering it. It has advantages," Rutledge said last fall.

When asked about the state of those discussions at today's Goldman Sachs Communacopia Virtual Conference, Rutledge's response showed that Charter's interest in licensing Comcast's technology for such an offering has waned considerably.

Charter, Rutledge explained, has its own IP-capable set-top box platform for traditional pay-TV that is also capable of integrating third-party streaming services. Charter also operates its own pay-TV app on multiple TV-connected streaming platforms, including Apple TV boxes, Xbox One consoles, Roku players and Roku TVs and certain Samsung smart TVs. Additionally, Charter sells Apple TV boxes under a payment plan that basically provides video subs with as an alternative to Charter's own set-tops.

"We have an integrated strategy and app-based strategy. We don't feel like we need to have an equipment strategy necessarily," he said. "But if we somehow get locked out, or everybody builds a walled garden around their hardware with their operating system, we think we can – through our own set-top strategy and our own integrated set-top boxes – put apps on and satisfy our customers. We think the marketplace is developing in a different way and is more app-based rather than hardware-based."

Comcast's big ambitions
If that's the path Charter ultimately takes, it could remove the potential for Comcast to add a massive cable operator to its licencing list as it pursues a plan to expand the influence and footprint – and general economic scale – of its X1 and Flex technologies.

Comcast has X1 syndication deals with Cox Communications, Rogers Communications, Videotron and Shaw Communications, and some of them have also launched their own Flex-like services for broadband-only customers.

Speaking at the same Goldman Sachs event yesterday, Comcast Chairman and CEO Brian Roberts confirmed that his company is exploring a plan to deploy its tech stack to smart TVs across the globe.

"We're early days, but we're looking at smart TVs on a global basis, and we're wondering – can we bring our same tech stack for certain capabilities in [content] aggregation to consumers who are relying more and more on smart TVs?" Roberts said.

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— Jeff Baumgartner, Senior Editor, Light Reading

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