After years of losing subscribers to its western rival Telus Corp., Shaw Communications Inc. is launching a new television platform it hopes will help it regain an edge in the TV market it once dominated.
Calgary-based Shaw on Wednesday formally took the wraps off BlueSky, a premium TV product based on the cloud-based X1 platform it is licensing from U.S. cable company Comcast Corp.
Shaw has been working with Comcast for about 18 months to develop the service with a view to competing with Telus's IPTV (Internet-protocol television) service Optik TV, which has hastened the erosion of Shaw's cable base as subscribers cut the TV cord.
It is a problem cable operators across North America began to face about a decade ago as telephone companies began getting into the TV game with IPTV, using new technology to offer a non-satellite option to customers in urban areas.
In an age of cord-cutting, Telus offered an appealing product for TV lovers still willing to pay expensive monthly fees for an all-in and convenient experience. Optik TV includes features such as a PVR (personal-video recorder) that functions across multiple televisions and devices, the ability to pause and restart on different TV sets and interactive program guides with apps like Netflix directly integrated.
Shaw hopes to go further with BlueSky, offering a voice-controlled remote for simplified searching, easy-to-access sports stats, scores and schedules and kids' programming with parental controls.
BlueSky builds on FreeRange – a companion TV app that lets customers watch live and on-demand programming on their mobile devices – which Shaw launched a year ago and is also based on X1 technology. Shaw is offering the new television set-top box product starting now in Calgary and said it will launch in additional markets in the coming months.
Toronto-based cable provider Rogers Communications Inc. said in December it is also partnering with Comcast to deploy X1, scrapping an in-house effort to develop IPTV that spanned more than five years and will lead to a writedown of up to $525-million.
Shaw chief executive officer Brad Shaw said in a statement Wednesday the company is proud to be the first international partner to launch Comcast's X1 technology, which has also been licensed by Cox Communications Inc. in the United States. Shaw made the move to work with Comcast in 2015 after writing off $55-million on its own IPTV development efforts.
Tony Werner, president of technology and product at Comcast, said his company has "seen a tremendous response [to the X1 product] from millions of customers in the U.S."
It is expensive to deploy and capital costs have gone up, but since launching the first version of the X1 platform about five years ago, Comcast has reported a turnaround in its cable-subscriber numbers and actually begun adding new customers instead of shedding them. Analysts predict 2016 will be the first year in a decade that the company will post a full year of positive subscriber additions.
"We attribute just about all of those video results to this product and this platform," Mr. Werner said in an interview Wednesday. He added that Comcast has reported a consistent reduction in the rate of customer turnover since launching X1 and also benefits by selling more pay-per-view and video-on-demand content thanks to the user-friendly interface.
Shaw president Jay Mehr said the partnership lets Shaw tap into Comcast's team of thousands of engineers who are encouraged to experiment with new ideas, such as the voice-controlled remote. "Those are the kinds of bets that Shaw on its own, we don't have the scale to make."