(Reuters) - A top Comcast Corp executive said on Wednesday that the company is in talks to license its latest technology, called X1, to other cable operators, which would help the industry better compete with telecom and satellite rivals.
“Concerning the licensing of the X1 product, we have had interest expressed by a number of MSOs (multi-system operator or cable companies), and we are considering the opportunity,” Comcast’s cable unit Chief Executive Neil Smit said during a conference call with analysts after the company released its third-quarter results.
Comcast unveiled its X1 cloud-based platform last year and has expanded the service which has an advanced interface, a more complete search function, and a better digital video recorder to nearly all of its markets.
John Malone, the billionaire chairman of Liberty Media who made his name in the cable industry, has been calling on Comcast to share its technology with smaller players.
Cable companies should team up to create a rival to Internet streaming service Netflix, Malone said on October 10. He thinks Comcast will share its technology with the rest of the industry.
Rising programming costs from media companies have combined with online streaming competition from telecom companies such as Verizon and AT&T are pressuring the cable industry.
“The industry needs to be much more coordinated. That’s the theme this year with Malone being in it. It’s all about coordination and consolidation at that point,” said Macquarie analyst Amy Yong.
Malone’s Liberty Media has a large stake in cable operator Charter Communications and has been circling Time Warner Cable as a potential acquisition target. Time Warner Cable reports its third-quarter results on Thursday
The cable industry also faces another challenge as customers who consume an increasing amount of Internet video, subscribe to lower-cost alternatives such as Netflix.
Smit said putting Netflix on its set top boxes was not a priority for Comcast since customers can get that service in several ways.
Smit’s remarks were made after Comcast posted quarterly a profit that beat analyst estimates on Wednesday. Shares fell 1.4 percent to $47.05 per share after the company lost more video subscribers than expected and added an amount of high speed Internet customers that missed estimates.
Comcast lost about 129,000 video subscribers in the quarter, which was worse than the loss of 102,000 subscribers Wall Street analysts were expecting, according to Street Account.
Comcast, like its smaller rivals, increasingly relies on Internet customers for growth as they continue to lose cable TV subscribers to competitors such as and grapple with rising programming costs. Comcast added 297,000 high-speed Internet customers, which slightly missed estimates of a gain of 305,400 customers.
Comcast clinched full control of NBC Universal for $16.7 billion earlier this year by buying out General Electric’s stake a few years ahead of schedule. It owns broadcaster NBC, the film studio Universal and a host of cable channels.
In its NBC Universal business, its biggest cash flow growth was seen at its filmed entertainment unit, where it generated operating cash flow of $189 million compared to $72 million a year ago thanks to the children’s movie “Despicable Me 2”. Total operating cash flow at NBC Universal rose 9.6 percent to $1.25 billion.
The company posted third-quarter net income of $1.73 billion, or 65 cents a share, compared with $2.11 billion, or 78 cents per share, a year ago. A year ago, it saw gains from the sale of spectrum to wireless companies and from its stake in A&E Television Networks.
Its EPS beat estimates by four cents, according to Thomson Reuters I/B/E/S.
Revenue fell 2.4 percent to $16.15 billion, below analysts’ estimates of $16.26 billion, according to Thomson Reuters I/B/E/S.
Reporting by Liana B. Baker; Editing by Jeffrey Benkoe and Leslie Gevirtz