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Comcast Reportedly Wants to Battle Roku and Amazon for Smart TV Deals

The cable giant is reportedly pitching its X1 platform to TV OEMs. But the competitive environment is intense.
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Comcast  (CMCSA)  reportedly wants to take on Roku  (ROKU) ,  (AMZN)  and Alphabet/Google  (GOOG)  in the realm of smart TV platforms.

Tech website Protocol reported on Friday morning that Comcast is now trying to sell smart TV makers on adopting its X1 software platform, which has mostly received favorable reviews and has long been deployed on Comcast set-top boxes. It adds that it’s not clear how far talks have progressed to date.

As Protocol notes, Comcast has already licensed X1 to fellow cable provider Cox, which deploys X1-based set-tops under its Contour brand, and has also rolled out an X1-powered streaming device known as Xfinity Flex. However, it hasn’t yet licensed X1 to third-party consumer electronics OEMs.

Why might a cable/broadband giant be interested in software licensing? A few factors could be at play:

  1. Comcast, like other U.S. pay-TV providers, has seen cord-cutting accelerate in recent months. As a result, its TV business might be feeling additional pressure to create new revenue streams.
  2. TV-based streaming activity has inflected higher since March.
  3. Comcast and its NBCUniversal unit own streaming services that Comcast is likely eager to grow distribution for.
  4. As Roku and The Trade Desk  (TTD)  will vouch, the over-the-top (OTT) TV advertising market has been taking off. And Comcast/NBCUniversal has both a substantial video advertising business and considerable user data that it could leverage to deliver targeted ads via streaming apps running on X1.
  5. Along with advertising, licensing a platform such as X1 to hardware OEMs can open up revenue streams such as licensing fees and transaction cuts on streaming service sign-ups and video rentals and purchases.

But while Comcast could profit in a few ways from licensing X1 to smart TV OEMs, it will have to contend with a pretty intense competitive environment.

Roku reported having 43 million active accounts globally at the end of Q2, and claims its software is used on 1 out of every 3 smart TVs sold in the U.S. Amazon’s Fire TV platform, which has large bases in both the U.S. and Europe and is also licensed to smart TV makers, had more than 40 million active users as of January.

There’s also Google’s Android TV platform to consider, as well as Apple’s  (AAPL)  Apple TV set-tops and proprietary smart TV platforms from the likes of Samsung and Vizio. Google reported earlier this month that Android TV’s user base was up 80% annually, albeit without sharing a user count.