Cogeco bucks the cableco X1 trend with MediaFirst pick

Cogeco Inc. is going with MediaFirst for its first IPTV platform, a move that is an upgrade over its current TiVo offering but isn't likely to change much when it comes to its TV service subscriber trends, according to one analyst. The Montreal-based company’s decision to opt for MediaFirst was based on the customizability of the platform, a product of Ericsson AB, which spokesman Gabriel Beausejour said in an email was more attractive than the X1 or TiVo Corp. products. Part of that has to do with its open-source nature, as it will run on Android, which will open the company to multiple set-top-box vendors. MediaFirst “is a more customizable solution which will lead to greater personalization and ease of use in terms of the user interface,” Beausejour said, adding the company considered factors including ease of use and implementation, customer-facing features and implementation costs. The company announced the partnership with MediaKind, which owns the platform, in a press release on Tuesday. Cogeco said it expects to make the service available to its customers in its footprint by the middle of next year. It will coexist with its other TV offerings, including TiVO, and will include a wireless set-top box, voice commands, cloud-based digital video recording, and a user interface and customization. While the IPTV platform will future-proof the company’s TV services and should represent an upgrade over its current TiVo offering, it should not be viewed as a big step-up for the company, Macquarie Capital Markets analyst Sanford Lee said in an email. That’s because no matter how you deliver it, TV is still TV -- which has anchored down some telecoms’ balance sheets. As such, considering high content costs, the move should be seen more as a “means to lock up high margin internet subs,” Lee said. Lee added he thinks part of the reason for going with MediaKind is cost, as X1 licensing fees are “relatively high.” Because MediaFirst is based on open-source software, it will also make it more cost-effective for both Cogeco and its subscribers, he said. With the announcement, Cogeco joins Bell and Telus in adopting the platform. Telus participated in trials on the platform in 2015 and announced last December that it was adopting it for its Optik TV service. And earlier this year, Bell said it was adopting the platform for its Fibe and Alt TV services. Tuesday’s announcement also represents a divergence from recent moves made by other cablecos, including Rogers Communications Inc. and Quebecor Inc.’s Videotron, who elected for the Comcast platform. Shaw Communications Inc. already uses the X1 product for its BlueSky services. Calling its IPTV service Ignite TV, which went live to certain Ontario customers in June, Rogers has lauded the X1 as a platform that is backed by Comcast’s scale and technical roadmap. But in a recent conference call with analysts, Shaw said the BlueSky product hasn’t lived up to expectations. “At this point in time, market dynamics in Canada are particularly favourable for the introduction of IPTV and to Cogeco Connexion’s current and new customers,” Beausejour added. “As video solutions continue to evolve, we obviously have to continue to upgrade our product catalogue and the in- and out-of-home experience in order to future-proof our customers.” But MediaKind also offers global scale. It counts AT&T Inc., Deutsche Telekom, and Telefonica as other users. MediaKind was rebranded from Ericsson’s Media Solutions in July. On its website, it says the MediaFirst cloud-based TV platform provides a “converged multi-screen experience including Pay TV in-home, TV Everywhere and services,” which also allows for the integration of social networks. Before becoming MediaKind, the brand was known as Microsoft Corp.’s Mediaroom TV before being bought by Ericsson. Cogeco abandoned its own efforts at an IPTV project -- as Rogers and Shaw would eventually do -- and partnered with TiVo in 2014. While it’s a good overall move for the company, it “doesn’t put them on top of competitors,” Lee said. It also still introduces integration risks, he added, meaning customers may get confused by the number of TV products Cogeco will have. — With reporting by Ahmad Hathout at ahathout@thewirereport.ca and editing by Anja Karadeglija at akarad@thewirereport.ca

Cogeco bucks the cableco X1 trend with MediaFirst pick

News | August 14, 2018

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Cogeco bucks the cableco X1 trend with MediaFirst pick

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