When Comcast divulged its vision to take Sky’s Now TV streaming service global by 2020, it was clear the X1 technology would soon be coming to Europe, likely in convergence with Sky Q. Still, the announcement from the world’s largest cable TV company that X1 could be making the switch from exclusive premium product to readily available offering came as an unexpected move.
Remember the X1 was one of the first US hybrid set tops able to accept QAM-delivered TV as well as DOCSIS-delivered IP video, and merge them into a single UI – so the burning question then is one of whether Comcast plans to massively increase the scale of its X1 licensing business on a pay TV basis, which has proved a success at many top North American pay TV operators, or whether Comcast is plotting something even bigger?
It comes as Comcast Cable CEO Dave Watson said the company is investigating “ways to extend X1 into more broadband-focused segments over time.” It implies Comcast could deploy X1 on cheaper hardware than the current roster of hybrid set tops from Arris and Technicolor, coming kitted out with the well-received X1 voice remote based on in-house recommendation software which Comcast has invested significantly in. Many reports have taken Watson’s sentiments as gospel and believe X1 will be arriving on low-end hardware and even become more mobile-focused. It would help extend the lifespan of legacy hardware in the field but why associate a premium offering with cheap hardware when you have worked hard to build a premium product from the ground up? This is why we think X1 embracing cheap hardware remains an unlikely venture in the near-term and Watson has sent the industry on a wild goose chase.
What Comcast’s Watson made abundantly clear though, speaking at a Deutsche Bank conference in Palm Beach this week, is that broadband remains the highest of priorities while video will be an afterthought. Accepting this fate has been a painfully slow process for Comcast, but at last we are making progress and acceptance is the first step to embracing change.
“For the right segments, video becomes a great complement to broadband. Broadband is the foundation of which we start the relationship. Video can be a great supporting part of that package,” said Comcast Cable CEO Dave Watson.
Perhaps three or four years ago, maybe even longer, Faultline Online Reporter waxed lyrical about the next major frontier being cable companies selling video services through rival broadband networks – and finally it seems Comcast is taking note.
Well, almost, as apparently Watson doesn’t envisage any difference in the video industry despite his company’s catastrophic pay TV losses. “I think the video marketplace is going to be tough, but I don’t see the video marketplace changing. And again it’s because of the sheer amount of virtual OTT providers as well as the amount of choice. We’ll pick and choose the segments, primarily focused on broadband. But I think the video marketplace will continue to be a tough one for at least the near term,” said Watson.
“There’s a new niche video direct-to-consumer product introduced every other month. There’s more choice than ever for consumers to piece together whatever they want. We’re positioned on one hand – X1 could be that platform. If I’m a direct-to-consumer video provider, I’d want to be on X1. We’ll think about those applications over time. At the same time, because of consumer choice, because of all this competition, we’re just not going to chase video. We’ll stay very centered on broadband, we’ll package video where it makes sense and do that profitably,” Watson said.
So, while T-Mobile has recently revamped its grand video ambitions in favor of becoming an aggregator of mobile TV content, clearly Comcast is taking a leaf from this strategy but instead down the broadband route. It has already integrated major OTT services like Netflix, YouTube and most recently Amazon Prime Video, available in 4K HDR with voice remote integration.
Speaking of mobile, we have already seen something of the sort with Xfinity Instant TV, the successor to the Xfinity TV app, which brought Xfinity X1 functionality – costing $18 a month, rising to $40 for a bundle including major sports networks.
Comcast boasts Mediacom and Cox Communications in the US, as well as Shaw Communications and Rogers in Canada as X1 licensees, most running the X1 platform on set tops from Arris or Technicolor.
Watson didn’t care much for touching on technology so let us do the honors. X1 uses Tru2way middleware, which emerged as the successor to the original Open Cable Application Platform (OCAP) technology for TVs to connect to cable services without a set top. This software presents a common platform for deployment of interactive TV applications, insulating these from the underlying device. RDK then sits as an abstract layer between that middleware and the SoC so that functions like tuning, decryption and de-multiplexing are handled via generic, rather than proprietary, commands. Comcast subsidiary thePlatform also provides the Mpx Content Management System to Shaw.
It’s worth keeping in mind a potential game changer which was rumored back in November, when plans emerged for a new set top exclusively for Comcast broadband subscribers, designed to aggregate OTT video services but with limited access to rival offerings like DirecTV Now and Sling TV, and with no cable TV. CNBC sources said the voice-activated device will run a similar platform to X1 and would launch sometime this year.
But Android TV remains its greatest challenge of all, therefore leveraging the Sky assets over in Europe could equip Comcast with invaluable weapons in the battle for the big screen, as Android TV operator tier gets ever closer to its US tier 1 debut.