Shaw Licenses X1, Proves Comcast's Influence

Shaw Communications is taking up with X1.

After spending millions of dollars developing its own IPTV platform, Shaw Communications Inc. has decided to scrap that project and license Comcast Corp. (Nasdaq: CMCSA, CMCSK)'s X1 technology instead. Canada's biggest MSO highlighted the strategy during its earnings report earlier this week (transcript via Seeking Alpha), with CEO Bradley Shaw pointing to the advantage in scale that the X1 platform will provide.

"Scale is a key factor in our business, particularly as we enter the world of next-generation video," said Shaw.

With the decision to partner with Comcast, Shaw becomes the second major North American cable company to license the X1 operating system. Cox Communications Inc. has also licensed X1, despite having developed and deployed its own multiscreen Contour TV experience. (See New Cox Guide Boosts Viewing.)

Want to know more about the impact of web services on the pay-TV sector? Check out our dedicated OTT services content channel here on Light Reading.

It wasn't discussed much back when Comcast was pursuing its (ultimately failed) acquisition of Time Warner Cable Inc. (NYSE: TWC), but the nation's largest cable operator has power and influence in the market far beyond its own significant customer footprint. The X1 licensing program is a good example, showing how Comcast can generate new revenue through partnerships with its peers and also shape the television experience for a large audience of viewers.

Comcast has helped drive cable's technology agenda in other ways too. The company was the original developer behind the Reference Design Kit (RDK) IP video set-top software stack that is now being licensed by more than two dozen operators. Plus, Comcast's engineers have initiated or participated heavily in development of key industry standards, such as Converged Cable Access Platform (CCAP) and the next-gen DOCSIS 3.1 spec. (See Comcast's TWC Coup: 3 Things to Know.)

As for X1, the set-top operating system has plenty of bells and whistles for operators to covet, including the cloud DVR feature, machine-learning technologies for content discovery, a voice-driven interface and more. Few, if any, other cable operators have the internal resources required to develop all of these technologies on their own, and the X1 platform makes an attractive package with all of the features bundled together.

Shaw hasn't provided any details on when it might start deploying X1. But Shaw EVP Jay Mehr did say that the company is trialing "all elements of the Comcast X1 platform," and that the deal with Comcast is "a deep partnership, and the trial is a broad one."

— Mari Silbey, Senior Editor, Cable/Video, Light Reading