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Rogers, Videotron Angle for X1 Edge

Alan Breznick
4/2/2019
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TORONTO -- Hoping to re-create Comcast's X1 magic in the Great White North, Rogers Communications and Videotron are revving up their rollouts of their syndicated versions of the US MSO's cloud-based video platform.

Speaking at a Scotiabank financial conference here last week, senior executives from Rogers and Videotron said they're aiming to duplicate Comcast's success with X1 south of the border, boosting video usage, revenues and profit margins while driving down subscriber churn rates and capex. Like their Comcast counterparts, they are also planning to use the new cloud-based platform to introduce other promising video and related products, such as Comcast's new Xfinity Flex streaming video service for broadband-only customers. (See Comcast Targets 'Xfinity Flex' at Broadband-Only Subs.)

With nearly a year's head start on neighboring Videotron, Rogers has been steadily rolling out its new, X1-based Ignite TV service throughout Canada since last June. As of the end of last year, it had deployed Ignite TV across the province of Ontario, by far the largest portion of the MSO's nearly 4.4-million-home footprint.

Similar to X1, the Ignite TV platform features a slick user interface for TVs and iOS and Android mobile devices, support for a voice remote, cloud DVR and integration of Netflix on set-tops. Like X1 again, Ignite TV also features an on-screen app that provides near real-time tracking of scores and stats from various sporting events, and access to KidsZone, a version of the guide that highlights channels and VoD content just for children. (See Rogers Sparks 'Ignite TV' Using Comcast's X1.)

While they caution that it's still "early days" for Ignite TV and that it will take another 12 to 18 months to draw firm conclusions, Rogers officials said they're already seeing greater video use, higher satisfaction scores and lower video churn rates among Ignite subscribers. "All the metrics are good," said Rogers CFO Tony Stafferi, noting that the churn numbers are "significantly down" and "video consumption is way up" so far.

Despite such improved metrics, Rogers still shed 16,000 pay-TV subscribers in the fourth quarter of 2018, a deterioration from its loss of 13,000 video subs a year earlier. But, for all of 2018, the company reported a loss of 55,000 pay-TV customers, an improvement from the 80,000 it lost in 2017. Rogers closed out last year with a total of just under 1.7 million video subs.

Still, encouraged by the early results and expectant of a sizable decline in customer premises equipment (CPE) spending, Rogers officials are planning to switch over entirely to Ignite TV and other X1-based "connected home" products before the end of the year. Noting that "the economics (of making the switch) are so compelling," Stafferi said the operator sees CPE and installation costs dropping from about $1,200 per home with its legacy products to $400 per home or less with the new X1-based platform.

"We'll move to stop selling our legacy products as early as we can," Stafferi said. While he declined to put an exact time frame on it, he said expects that to happen "towards the back half of the year."

For its part, Videotron intends to start conducting employee trials of its new X1-based service, called Helix, later this spring after unveiling the service with much fanfare last October. Plans include expanding the employee trials to select video customer trials, a soft customer launch and then finally a full-scale commercial rollout across the province of Quebec over the rest of the year.

Similar to both X1 and Ignite TV, Helix features a fancy user interface for TVs and iOS and Android mobile devices, support for a voice remote and integration of Netflix on set-tops. Videotron says the new IPTV service also delivers a more powerful WiFi experience, as well as pave the way for home automation and other advanced broadband products.

"Helix is very important to us," said Videotron President & CEO Jean-Francois Pruneau, whose company has about 1.6 million pay-TV subscribers. In particular, he's counting on the cloud-based platform to reduce the operator's video-customer churn rate as well as slash the number of truck rolls it must carry out for home equipment installations, making Helix well worth the hefty royalty payments to Comcast for the X1 syndication rights. He noted that 35% of Cox Communications' new customers now do self-installs since it launched its new "Contour" product powered by X1. (See Cox Takes Comcast X1 Platform National.)

In the fourth quarter of 2018, Videotron shed 6,000 pay-TV subscribers, an improvement over the 8,000 video subs it lost a year earlier. For the year, Videotron lost 12,000 pay-TV customers.

"Our subscribers have been declining for several years now," Pruneau said. "We think we'll be able to limit churn with this new platform and improve ARPU."

— Alan Breznick, Cable/Video Practice Leader, Light Reading

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