A Guide to 'The Cable App'
By now, you’ve probably heard enough gadget giddiness from this year’s International Consumer Electronics Show. We’ll spare you a roundup and instead focus on perhaps the most promising thing to happen to cable at a CES, ever: the rebirth of the “cable-ready TV,” this time without federally mandated technology components.
We’re talking about the debut of “the cable app,” by Comcast and Time Warner Cable, on “smart TVs” made by Samsung and Sony.
First of all, what’s “smart” about a “smart TV” is the same thing that made phones “smart phones” last year: an Internet connection.
For cable, it means this: Consumer Jane buys a smart TV. She brings it home, hangs it on the wall and hooks up the Internet connection. (Warning: When you try this at home, have that crazy-long, un-memorizable Wi-Fi password handy.)
Then, voila: Apps start popping up. Netflix comes to mind. But, next to the Netflix icon, there’s perhaps an “Xfinity” logo, for Comcast customers, or the Time Warner Cable icon, for its customers.
(Note: So far, none of the manufacturers are accepting a premium to put one company’s icon higher in the queue. So far, it’s by popularity - whichever app is used the most is highest on the list. We’re taking bets on how fast that changes.)
How does it work, technically? Let’s start easy. Let’s say Consumer Jane lives in Comcast territory and is already a broadband and video customer.
In the past, and in a huge oversimplification, streaming live video meant getting an encrypted stream to her set-top box.
Now, getting a live stream to a “connected” or “smart” TV means sending an HTTP stream, wrapped in digital rights management, “from the cloud” (translation: from a server in the network). That stream moves over Internet protocol through the cable-modem termination system, through the cable modem, through the Wi-Fi router, to the TV.
Then, to move that stream around to other TVs and screens in the home, two other components come into play. One is DLNA with DTCP-IP, a form of link-layer protection that keeps the signal encrypted as it moves around the home.
The other is HTML 5, to render the user interface on the other screens in the home.
So, no set-top, no CableCard, no OCAP. Just cable, going into television sets, without all the rest of it. Sounds to me like a cable-ready TV, and a way to get the services people are already paying for onto their other screens - without the Federal Communications Commission’s “help.” Amen!
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Stumped by gibberish? Visit Leslie Ellis at translation-please.com or multichannel.com/blog.
CDAY commented:
I always appreciate Leslie’s lessons and read her posts often.
I’m curious about the “difficult” scenario. What happens in this scenario when Consumer Jane lives outside of Comcast territory? Will she still see a “Comcast” app? Or, will she only see the Cable App of the MVPD providing her upstream plant? If so, why?
Roger Drummer commented:
the whole set top/cable card issue, from both a tech and financial pov, is above my intellectual pay grade. (bum sitting in front of a keyboard, with no tech knowledge or savvy at all). but the issue has always raised questions for me. possibly some out there with tech and financial expertise on the subject can chime in to fill in the blanks for me.
seems like ever since the first corded remote grossed an extra buck or 2 a month, that the cable industry has had some level of obsession with the equipment rental business.
i can see that as being all good, pre DBS, when cable had a near monopoly. but since DTV 1st went on line in 94, soon to be followed by Dish Net, i can’t help but wonder to what extent the equipment strategies of cable have affected their mkt share.
at first, cable still held the edge even post DBS, as DBS required a box on every TV, with an associated monthly charge. cable, not so much. even after cable 1st went digital, the equipment war still sided the cable provider, as a DBS home with 4 TVs might have a $15 or $20 a mo equip premium, and a cable home more like zero to $6.95 a mo, as many homes were happy with just analog, or a box on the main TV and analog on the rest of the house.
(on a side note, i always thought going digital only on premium channels was one of the worst decisions the cable industry ever made. whether they re-couped some bandwidth or not, or put some extra boxes in homes, it cost them more in mkt share than they know).
fast forwarding in time, more and more TVs and rooms desired a box. meanwhile DBS had been more judicious/creative/whatever, in it’s approach over time to equipment and it’s impact on the customers bottom line of the monthly bill.
even leaving DVR’s out of the discussion for now, a current 4 TV cable home could carry an equip charge in the mid thirty dollar range after tax and franchise fees, vs a $5 mo. equip fee for a 4 TV DBS home with 2 boxes, both capable of serving 2 TVs.
i think it’s more complex than people would want to admit, figuring exactly what the net of that thirty something a mo gross in equip fees really is. (after figuring in box costs to the provider, warehousing, added install time and cost, maintaining satellite offices to service equip needs, lost equip, recovery, added truck rolls, etc). (remember when addressability was pretty much going to eliminate the truck roll).
there’s also a big cost providers don’t figure in. virtually every sub who got hit with a $300 plus charge for an unreturned converter, became a lost customer for life. and not just for video, but the bundle as well. providers all had some level of poor record keeping, (from poor to terrible), so no telling exactly how many disputed unreturned boxes were really on the cust, and how many on the provider. regardless, too large of a percentage of the customers hit with that unreturned equip fee were lost for life, as a video, data, or voice, cust.
so what’s my point?
while the cable app may well be a great ip work around for a box on every TV, i can only presume that not only will Netflix and other internet video competitors have one also, as you say, but in an open network world, could DBS and Telco video competitors not also possibly have one down the rd, even on a TV getting it’s data over cable?
regardless, even if no on the DBS and Telco app thing, there will still be more and more other competitive services all the time going through the net. and would they not eventually have apps to? or if not, wouldn’t they still be accessible with a few extra clicks?
but cable’s video service pipe, that’s not an open net, nor will it be tomorrow. no never ending reg battles needed here.
and who knows what all implications that could have in the future, far above and beyond the linear and VOD content we see going through it today.
i still wonder if cable doesn’t need to re-think it’s approach to equipment.
i know, the cable card thing was a complete failure, bla bla bla.
imo, it failed because cable didn’t want it to succeed. i just don’t buy that cable really set it up to succeed, did all it could in that direction, or that it was/is an impossible task.
imo, if cable made it viable for electronics manufacturers, they would put it in their products, just as they did cable tuners in cable ready TVs, VCRs, DVRs.
and whatever that near impossible to figure actual net the industry gets from equip rental fees is, could be incorporated elsewhere in the video bill making it all net revenue neutral, while still appreciably lowering bottom line cost to the sub, and enabling much better interaction between their equipment and cable. thus, much greater video mkt share to the cable provider.
enough of a hardware based recapture of a dominant video position, helps even more.
rule the hardware side, you rule the mkt.
re-think the love affair/addiction to the equipment rental business, solve any cable card or cable card equivalent tech issues, and good things will happen to the core video business.
rule video, and good things happen to data and voice.
(of course, i could be just a blabbering crazy person too).