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Will Other MSOs Cut a Path to X1?

Comcast’s licensing efforts for X1, its next-generation, cloud-based video platform, appear to be in full swing in the wake of a national deal with Cox Communications, fueling speculation that other pay TV operators, both big and small, might eventually travel the same path to multiscreen video nirvana.

Another operator is already walking down that road: Canada’s Shaw Communications has begun to trial X1 after scrapping its original IPTV migration plan.

So who else will jump on board Comcast’s video train? The pickings are getting slimmer, at least among major U.S. MSOs, as many have already made those decisions. Others have questioned whether X1’s integration challenges are too great for tier 2 and 3 MSOs (see sidebar).

One possible taker for X1, two industry sources said, is Canada’s Rogers Communications. Rogers, they said, is looking at X1 as it pursues an alternative.

Rogers “has been dancing around the idea,” a source said. The MSO was not available for comment by press time.

Comcast’s X1 licensing activities picked up soon after it scuttled its pursuit of Time Warner Cable, a deal that would’ve added significant additional scale. By licensing X1, Comcast can carve out a new revenue stream while recouping some of its research and development costs.

The approach gives prospective MSOs a clear path to a proven, next-generation platform that is adding features and improvements at a rapid clip, but they also must give up some control of their video destiny to Comcast. Cox weighed all of those scenarios as it mulled its “future-state” video strategy, and ultimately decided that X1 was the best option.

“We’ve made our pick,” Steve Necessary, Cox’s vice president of product development and management, said.

Necessary agreed with the notion that by going with X1, Cox had opted for a “buy” versus “build” strategy for its new multiscreen service, which will continue to be branded as “Contour.”

“It clearly became a very attractive scenario for us,” Necessary said of X1. “But it was not a decision that we made lightly.”

While Cox will have a chance to ride X1’s development wave, it will lose some control of the interface. Cox’s new UI will carry its branding, but “at the moment, the opportunity to customize it is pretty limited,” Necessary said.

That could change later, but “in context, it’s a pretty remarkable platform,” he said of X1, noting future plans for it “are pretty darn impressive.”

Cox believes the trial-phase work will pave a path to a smooth, broader deployment in 2016. “It was a big integration effort to be sure,” Necessary said, noting that some application program interfaces (APIs) had to be built to combine the two sides.

Cox has commercially deployed its new X1-powered Contour offering in San Diego, and expects to expand it to other markets in 2016.

Limits to Licensing

Though Canada’s Rogers is seen a candidate for X1, Comcast’s efforts to expand its licensing program could be stymied as operators pick different routes:

Charter Communications: Developing its own platform that leans heavily on ActiveVideo’s cloud technology.  

Time Warner Cable/Bright House: Expected to use Charter’s video playbook once Charter acquires the MSOs.

Liberty Global: Using the RDK, but has developed its own cloud-based interface for its next-gen Horizon TV platform.

Cablevision/Suddenlink: Altice Group, set to acquire both, has already taken a different video path in Europe that hints at how its U.S. technology strategy might shake out.

CenturyLink: Evaluating the RDK for its next-generation video platform, but it’s extremely unlikely that it, or any other telco, will go with X1 because of the competitive ramifications.

Independent U.S. cable operators: Several are teamed up with TiVo and Arris (for its Moxi platform), and some question whether the X1 licensing model can be applied to smaller operators in the near-term. “We have not yet seen a practical way to bring X1 to the small and midsized market,” National Cable Television Cooperative CEO Rich Fickle said in a recent interview.