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How Does Comcast Plan to Innovate Its X1 Set-Top Box?

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Nov. 30 2016, Updated 8:04 a.m. ET

Innovation for Comcast’s X1 set-top box

In the previous part of this series, we learned about how Comcast’s (CMCSA) X1 set-top box is driving its video business. In this part of the series, we’ll look at how Comcast intends to innovate when it comes to its X1 set-top box in the face of rising competition.

Comcast stated at its fiscal 3Q16 earnings call that it expects to continue innovating its X1 platform by integrating different services on the platform like Netflix (NFLX) through the introduction of new features on X1. At the end of fiscal 3Q16, Comcast had 22.4 million video customers.

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Comcast’s market segmentation

Comcast is offering different products in its triple-play services (voice, video, and high-speed Internet) based on market segmentation. For example, Comcast’s Internet Plus plan is for Millennials that aren’t very interested in streaming videos but would like high-speed Internet.

Netflix’s integration with Comcast

In July, Netflix (NFLX) and Comcast entered an agreement to provide Netflix on Comcast’s Xfinity X1 set-top boxes. Netflix is expected to become available on the X1 later this year.

Comcast explained its rationale behind the deal with Netflix at the Nomura Media, Telecom & Internet Conference in August 2016. It said it viewed the deal as beneficial for Comcast’s Xfinity X1 customers. It added that the deal would allow Comcast to offer popular content not only from Comcast but also from third-party sources such as Netflix.

Early this year, Comcast also licensed its X1 platform to Cox Communications and Shaw Communications (SJR).

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