Arris investors overreacted to news that one of the vendor’s leading clients, Comcast, will begin enabling its set-top environment on connected devices, Raymond James analyst Simon Leopold said in a note to clients.
“The market has reacted as if the news was new or unexpected. Most, including us, see the traditional set top box (STB) as challenged, but offset by the deployment of next generation IP gateways and media boxes along with the infrastructure to support them, and today’s release does not alter our view on the trajectory," Leopold said.
Multichannel News was first to report on Leopold’s memo.
On Tuesday, Comcast announced that its Xfinity TV app is in beta testing on select Roku devices.
Previously, Comcast’s multiscreen video app has only been available on iOS and Android mobile devices. This is the first time that the app, which allows customers to experience their full cable package without using a proprietary Comcast set-top, has been available on a connected TV device.
Comcast announced plans to do this back in April of last year.
“There is nothing new about the app-based approach to delivering video,” Leopold said. “During 2016, the cable TV industry proposed an app-based approach to address concerns raised by then FCC Chairman Wheeler. The FCC’s new Chairman Pai has scrapped the regulatory effort, but as we said last year, the industry was already evolving even without the regulatory efforts.”
What is new, however, is a tidbit in the Leopold report: Comcast will reportedly offer a $2.50 credit to customers who use the Roku as their primary video device in lieu of a pricey leased set-top.
Another interesting tidbit: The analyst said Arris gets 15% to 20% of its revenue from Comcast.