& cplSiteName &

Comcast's X1 Clips Canadian Cord-Cutting

Aditya Kishore
8/17/2017

The second quarter of 2017 was the worst ever quarter for cord-cutting in the US, but in Canada, it seems the trend is slowing. According to a new study from Ottawa-based research and consulting firm Boon Dog Professional Services Inc., cord-cutting in Canada is bucking the trend, and actually decelerating.

Boon Dog's analysis found that Canada's publicly traded pay-TV providers lost a combined 22% fewer subscribers in the first half of 2017 compared to the same period in 2016. These larger providers lost 101,000 subscribers in their most recent two fiscal quarters, while the equivalent number for 2016 was 129,000 subscribers.

The firm's co-founder and partner, Mario Mota, "almost entirely" attributed the slowdown to a "significant turnaround" at Shaw Communications Inc. , resulting from the deployment of Comcast's X1 platform to support its new BlueSky TV service. He believes that if Shaw and other operators are able to improve their TV services to a similar standard, Canada could further slow cord-cutting in the pay-TV market.

Even in the US, despite the rather savage cuts by US households, there was the faintest suggestion that cord-cutting might slow at some point. According to Craig Moffett, principal analyst at researcher MoffettNathanson, the quarterly rate of cord-cutting acceleration declined from the previous quarter. In Moffett's words, it "got worse more slowly" during the second quarter and was not as bad as some market expectations. (See Are Cord-Cutting's Days Numbered?.)

And the X1 platform certainly has worked for Comcast Corp. (Nasdaq: CMCSA, CMCSK). The US operator actually gained 161,000 pay-TV subscribers in 2016, while some of its peers haemorrhaged customers. Almost half of those new additions are on the X1 platform, driving new annual subscriber growth for the MSO for the first time in a decade. (See Comcast Kicks A$$, Earns $80B in 2016.)

Shaw's fellow Canadian cable operator, Rogers Communications Inc. (Toronto: RCI), will also be launching Comcast's X1 platform early next year. If Mota's thesis is correct, that should further slow cord-cutting in Canada. (See Rogers Pencils In X1 Launch for 2018.)

But Mota also noted that even though pay-TV providers may have improved their churn numbers, they were still losing market share. He pointed out that there were 200,000 housing starts in Canada, so operators were well behind household growth in the country. This meant that penetration of pay-TV services was actually reducing at a faster rate than just cord-cutting subscribers.

Mota's numbers are also culled from the publicly traded operators, which are typically larger and better positioned to launch new services and then market them to new subscribers. Smaller providers with limited resources, potentially weaker channel packages, and less advanced service features, are more vulnerable to cord-cutting. While the big guys account for most subscribers, the little guys are more likely to be losing subscribers, and that isn't necessarily factored into Mota's analysis.

Still, the majority of the market is still subscribing to pay-TV services, and still seeing value in a full-fat TV service. And given the growing number of OTT services being launched, fragmentation is inevitable. It could be that at some point down the line, consumers start to get frustrated with limited content options on exclusive OTT services, and weary of signing up and paying for multiple services to get the selection they want.

If operators can create more streamlined content packages and deliver high-quality experiences across devices, they might just have a shot at getting them back.

— Aditya Kishore, Practice Leader, Video Transformation, Telco Transformation

(0)  | 
Comment  | 
Print  | 
Related Stories
Newest First  |  Oldest First  |  Threaded View        ADD A COMMENT
Featured Video
Upcoming Live Events
November 14, 2019, Maritim Hotel, Berlin
December 3-5, 2019, Vienna, Austria
December 3, 2019, New York, New York
March 16-18, 2020, Embassy Suites, Denver, Colorado
May 18-20, 2020, Irving Convention Center, Dallas, TX
All Upcoming Live Events