Shaw ditches gestating IPTV project for Comcast’s social platform

By , on June 26, 2015

(Photo from Shaw Communications Inc.'s website)
(Photo from Shaw Communications Inc.’s website)

Shaw Communications Inc. is racing to keep pace with changing TV viewer habits as it scraps longtime plans for an Internet-based platform in favour of a different approach that feels like Netflix on steroids.

The Calgary-based telecom company said Thursday it will begin a “technical trial” for the cloud-based X1 service, developed by U.S. cable giant Comcast last year, to give its customers a more seamless and connected TV experience.

The technology makes content a lot more accessible. Subscribers can watch all of their channels on any screen – from TVs to tablets to phones – when they’re connected to their home Internet. On the road, viewers are able to remotely stream programs recorded on their PVR through any Internet connection.

“It’s what Netflix is socializing people to do – one app, any device, any time,” said Kaan Yigit, a technology analyst at Solutions Research Group.

For Shaw, that’s “a real benefit they could market.”

Executives at the company seem to agree the X1 is a sales coup and took a $55-million writedown in the third quarter to scrap an Internet protocol (IPTV) platform that had been in development for nearly two years before it was suspended in late 2014.

Phone companies like Telus (TSX:T) and Bell (TSX:BCE) use IPTV to deliver channel lineups through landlines. Both companies have invested heavily in the technology to compete with cable operators, launching Telus Optik and Bell Fibe.

Yigit said both Bell and Telus have undercut cable companies on price, but selling the benefits of IPTV has been a bit more challenging. While IPTV offers better high-definition picture quality, most viewers probably don’t notice a huge difference and the ability to see it as a cutting-edge consumer service is limited, he said.

But with Comcast’s X1, the marketable features are aplenty on every platform.

Users are greeted with a highly-organized menu that displays their PVR content in a categorized format akin to Netflix, while other video-on-demand programs and in-house apps provide other avenues of entertainment.

The X1 service also lets viewers upload their own photos and videos to the platform so they can watch them on their TV or share them with a friend who’s also an X1 user.

“The Internet is changing the way we live, communicate, work, and share,” chief executive Brad Shaw said in a statement.

“In this new world, scale is important and Shaw is committed to building global partnerships that deliver best in class, customer experiences.”

What’s missing from the Comcast’s X1 platform are apps from outside companies. Viewers don’t have access to Netflix through the platform though it’s possible that Shomi, which is partly owned by Shaw, could make an appearance.

Like other cable companies, Shaw is hoping to give its customers enough reasons to keep their TV packages in the face of a rising number of people cancelling their services.

During the latest quarter, the company lost more than 27,000 cable and satellite subscribers.

Overall, Shaw (TSX:SJR.B) reported an 8.3 per cent decline in third-quarter net profit to $209 million from $228 million a year earlier.

Revenue increased 5.7 per cent to $1.41 billion.