August 2010

It’s a bizarre day when a major cable operator turns over content assets to a third party, but that’s what Comcast has effectively done by opening up its on-demand listings to the online TV guide provider Clicker. I believe that operators should do everything in their power to promote VOD content, but it still surprises me to see Comcast support another company’s aggregation role. I consider it a good sign, and one that shows the MSO is serious about making its high-value content more searchable and more visible in an increasingly IP world.

The cable industry as a whole knows it needs to prioritize improvements in the electronic program guide experience. However, that goal is complicated by the wide range of technologies deployed across cable systems, and the fact that legacy equipment doesn’t support the upgrades operators would like to make. Motorola is proposing a way to create an IP abstraction layer so that MSOs can update their user interfaces in the cloud, without having to worry about getting older set-tops to host a new guide experience. It’s a way to inject IP into the equation without sacrificing the hardware investments operators have already made. Hopefully it’s also a way to get EPG evolution moving at a faster clip.

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Here in the States, most pay-TV subscribers lease their set-tops for a monthly fee. It works well for many consumers because there’s no major cash outlay up front, and any necessary equipment upgrades are the responsibility of the service provider. That said, some subscribers would prefer to own their own set-tops, and some do by buying a box at retail.

Now in Canada, Shaw is offering a third option. Starting in September, Shaw Direct (previously Star Choice) will let subscribers choose whether to buy a new HD DVR from the company for $399, or rent one for $15 a month. The set-top on offer here is the Motorola HDPVR 630. It’s a dual-tuner DVR with 320 GB of hard drive space, and an MPEG-4 receiver.

I’m curious to see how many subscribers go the route of buying a set-top from Shaw Direct. There’s a perception that set-top rentals are a cash cow for pay-TV operators, but the reality is far different. Will consumers take on the up-front costs and replacement fees if given the chance? Or will they stick to the lease model for DVR service?

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If your audience closes a door, it’s time to open a window – a content release window, that is. According to BTIG analyst Richard Greenfield (reported by Ryan Lawler at NewTeeVee), release windows are shrinking rapidly, with most movies available through Video-on-Demand within days of their DVD debuts. There are several reasons for this, including a wider consumer shift away from physical media, and greater comfort on the studios’ part with digital delivery. But the upshot is that the economics of video delivery are finally shifting in favor of VOD.

VOD services should be the bedrock of pay-TV subscriptions. Along with live sports, VOD has the potential to deliver the most value both to consumers and service providers. Viewers get the shows they want when they want them – you know, like the Internet, but on your big-screen TV – and providers get engaged customers they can target with money-making ads, promos, and even new services. Somehow, though, that isn’t quite how it’s worked out. The challenges have been significant, including the need for more network capacity, the problem of separate guides for VOD and linear TV, and the difficulty of negotiating broader content licensing rights. When it comes down to it, money has been a serious gating factor. Luckily, it’s also the variable that will finally push VOD to live up to its potential.

The collapse of release windows is one sign that economics are now working for the VOD model. Another sign is the increasingly competitive environment for providers who find they have to invest in greater network capacity to ward off rivals. The same is true with program guides. Although the guide problem isn’t fixed yet, operators have widely acknowledged that it has to be a top priority for them if they want to stay competitive.

All in all, money appears to be tipping the scales toward VOD in 2010. It’s about time.

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Remember when the Verizon brand was introduced back in the summer of 2000? For a long time my biggest association with the name came from the many pay phones plastered with the company’s big red logo. Who knew then that Verizon would go on to become a major player in TV services? The march in that direction started in 2005 when Verizon launched FiOS. Since then, the TV operator has gone on to debut whole-home DVR services (aka Home Media DVR), TV widgets, 3D broadcasts, and now new multi-screen video applications. Yesterday my good friend Dave Zatz interviewed a Verizon exec after a company press conference and teased out details on new features coming for Verizon’s whole-home DVR service. In the not-too-distant future, FiOS subscribers will be able to access recordings from multiple libraries, on multiple screens, all through one UI. As Dave puts it, “all drives add up to a single virtual storage device.”

In light of new FiOS TV milestones, I thought this would be a good time to go back and look at how the service has evolved. Here’s a timeline of Verizon FiOS TV: The First 5 Years.

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Although this blog is often US-focused, I try to touch on Motorola activities in other regions when possible. Last week, Motorola execs spent time in Brazil for the annual ABTA conference on broadband and pay-TV services in the Latin American market. According to a recent In-Stat report, Latin America is one of the regions where digital set-top shipments are projected to climb over the next five years. That alone makes it an appealing market for Motorola, but the company is focused on technology far beyond set-tops in its ventures south of the border.

At ABTA, Motorola showcased the RX48 decoupled upstream module for cable modem termination systems, and the high-end SB6180 DOCSIS 3.0 cable modem. Both products launched late last year, and are now being made available for the Latin American market. Motorola also highlighted 3D TV and multi-screen technologies with demos on the show floor, and Director of Engineering Roberto Munoz spoke on a panel about evolving cable networks to support new converged applications.

You can access press releases from the event on the Motorola media center. They are in Portuguese, but that’s what those handy website translator tools are for, right?

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