Canadian cable TV behemoth Shaw Communications, Inc. SJR has decided to abandon its own IPTV platform development project and instead license Comcast Corp.’s CMCSA cloud-based X1 platform.
The company stated that it is presently working with Comcast to commence a technical trial of the X1 platform. Moreover, Shaw Communications has also written-down C$55 million of IPTV assets following its decision to discard the original IPTV solution.
Comcast’s next-generation web-capable X1 platform offers a hybrid IP/QAM video gateway with an advanced user interface and the ability to port third-party apps that tie into a cloud-based infrastructure. X1 is a cloud-based TV guide and also includes recommended web videos and a new mobile application.
Using the powerful X1 platform, Shaw Communications aims to provide its customers with an advanced seamless and connected TV experience, at home or outside. Further, the company is also looking to gain from the huge scale that Comcast’s X1 platform will offer.
Interestingly, Shaw Communications is the second major operator to have shown keen interest in commercially deploying X1, after Cox Communications Inc. Alongside, it adds to the growing list of Canadian MSOs that have dropped their proprietary IPTV plans. In 2014, Cogeco had scrapped its IPTV project and instead partnered with TiVo Inc. TIVO when it faced performance-related issues.
On Comcast’s part as well, it would be a major win if Shaw Communications finally goes ahead with the commercial deployment of X1. The licensing program will potentially open up a new revenue stream for Comcast.
We believe the deal should help Shaw Communications augment the video experience and bring next-generation services to customers, as well as check customer churn in the long run. Notably, as of May 31, 2015, the company’s video cable customer base totaled 1,881,547, reflecting a net reduction of 24,524 customers during the third quarter of fiscal 2015.
Shaw Communications currently has a Zacks Rank #3 (Hold). A better-ranked stock in the sector is The Walt Disney Company DIS with a Zacks Rank #2 (Buy).
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