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Rogers Dumps In-House IPTV Product for X1

Mari Silbey
12/16/2016
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It's a familiar story by now. Cable company invests millions in developing its own IPTV platform. Cableco realizes it doesn't have the scale to compete. Said company takes a huge loss on the investment. Comcast steps in and delivers its hosted X1 video service.

In the latest episode of the X1 epic, Rogers Communications Inc. (Toronto: RCI) has announced a long-term partnership with Comcast Corp. (Nasdaq: CMCSA, CMCSK) to deploy the US company's X1 IP-based video platform. The move comes after Rogers had already spent years building its own IPTV product and will result in the Canadian operator taking a massive loss in the fourth quarter estimated at C$475-$525 million (US$355-392 million). It also happens just two months after Rogers assured investors that its own IPTV service was on schedule for a near-term launch. (See Rogers Still Big on Gig & IPTV.)

The company now says it expects to make X1 available in early 2018.

Despite assurances to the contrary, there were signs that Rogers was facing difficulties upgrading to new forms of video delivery. First, Rogers and Shaw Communications Inc. announced in September that they would shut down their over-the-top video service known as shomi. Cox Communications Inc. similarly closed out its own OTT video services in conjunction with licensing the X1 platform.

Second, Rogers President and CEO Guy Laurence abruptly left the company in October after continued pay-TV subscriber losses and a decline in overall cable revenue. Chairman of the Board and interim leader Alan Horn said during the company's last earnings call that Laurence's departure was not a knock on his performance, but the former executive's lack of success in addressing the new realities of the pay-TV industry undoubtedly played a role in his exit. (See Rogers Says See Ya to CEO Laurence.)

Horn continues to lead Rogers today. Former Telus Corp. (NYSE: TU; Toronto: T) CEO Joseph Natale is expected to join the company as its new president in 2017.


Want to know more about video and TV market trends? Check out our dedicated video services content channel here on Light Reading.


Comcast, meanwhile, can count the new partnership with Rogers as a major win in its continuing effort to spread X1 internationally. Speaking in May at the Internet & Television Expo, CEO Brian Roberts declared about X1 that Comcast wants "to make this platform available around the world." (See Comcast Boasts Global Plans for X1.)

So far X1 licensees include Cox in the US and Shaw and Rogers in Canada. Comcast hasn't made clear publicly if X1 is generally available to all pay-TV operators, but it's clearly exploring its options.

Comcast's B2B ambitions also expand further than just X1 licensing. The company combined its Comcast Wholesale, thePlatform and This Technology business units into a new Comcast Technology Solutions division in October. Broadly speaking, the Technology Solutions group sells ad production and distribution products, multiscreen video management offerings and infrastructure services. (See Comcast Intros a Whole New Kind of Bundle.)

In June, Comcast also announced it would acquire part of the smart home platform company Icontrol. That deal hasn't been completed yet, but when it has, Comcast will power home monitoring services for several cable companies including Rogers and Cox, as well as Telstra Corp. Ltd. (ASX: TLS; NZK: TLS) in Australia and Itscom in Japan. (See Comcast, Alarm.com Swoop in on Icontrol.)

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

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kq4ym
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kq4ym,
User Rank: Light Sabre
1/7/2017 | 5:12:12 PM
Re: Defracture
It may be that the smaller operators can't yet justify letting loose of their current setup while to Rogers even multi-hundreds of millions in losses can be budgeted as in this case to go along with Comcast X1. The X1 marketing plan surely is keeping that brand in front of consumers at a steady pace as well.
msilbey
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msilbey,
User Rank: Blogger
12/16/2016 | 2:56:57 PM
Re: Defracture
I don't think the smaller operators will jump on the X1 bandwagon, at least not any time soon, but yes, there are limited options. That appears to be the price of a need for massive scale.
inkstainedwretch
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inkstainedwretch,
User Rank: Light Sabre
12/16/2016 | 1:16:37 PM
Defracture
One of the interesting things about cable over the decades is that cable operators have had so many options for how to implement different services and features. That was frequently a blessing -- if one solution was inappropriate for any given MSO (because of  size, architecture, geography, budget), there was another solution available that would probably be adopted widely enough that some economies-of-scale would kick in.

It seems that's becoming less and less the case. Whatever Comcast adopts or develops is apt to become the most commonly used solution (it helps that they've been very smart about what they adopt and develop). Toss in the market influence of Liberty Global, which is chummy with Comcast and is content to let Comcast take the lead on most technological innovations.

It all makes me wonder if a) the amount of innovation in cable will decrease and b) if the industry is at a point where it's more important to take care of business instead of testing a bunch of innovations, most of which are unlikely to be much of an improvement on what's now available.

-- Brian Santo 

 
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