Bit Rate

Time Warner Cable's Buying Only HD Set-Tops

3/13/2008 1:56 AM

Even if you don’t have an HDTV, Time Warner Cable may be giving you an HD set-top if you’re a new subscriber.

Time Warner Cable chief operating officer Landel Hobbs, on the operator’s earnings call last month, told analysts that “all the CPE [consumer premises equipment] we now order is HD capable so we expect to enable more subscribers to enjoy [a] better video experience in the year ahead.”

That means the PO’s the operator is sending to its three set-top box suppliers — Motorola, Scientific Atlanta and Samsung Electronics — are only for high-def models. (Note that Moto has had some supply-chain issues recently in delivering HD set-tops, specifically for Verizon’s FiOS TV.)

Not all new subs will get an HD unit: According to spokesman Alex Dudley, Time Warner Cable may redeploy existing standard-definition equipment it has in inventory to customers who do not specify that they want HDTV service.

Now that Time Warner Cable is gung-ho about seeding non-HD households with high-def boxes, it needs to do two things:

1. Stabilize the OCAP-based Digital Navigator code, which runs in all new set-tops. Time Warner Cable is leading the cable industry in deploying OCAP (er, tru2way). But the new platform still has some kinks. Witness the customer complaints – in Milwaukee; Kansas City, Mo.; and Lincoln, Neb., for example, and on messages boards here, here and here — about boxes running slow, freezing up and rebooting without warning.
 
2. Add more linear HD channels. Time Warner Cable (unlike, say, Comcast) has not charged extra fees for HD-enabled set-tops or digital video recorders. But its digital cable packages include maybe only around a dozen HD channels in most markets.

In New York City, Time Warner subs get 18 free HD channels. That’s a start. But with DirecTV touting 92 channels now, cable needs to step on the HDTV gas. DirecTV, recall, added 275,000 net new subs in Q4. Time Warner Cable lost 50,000 basic video subs in the quarter.

Yes, according to a recent Bear Stearns survey, HD was supposedly "one of the least important factors driving demand for pay TV," which the analyst firm said indicates "DirecTV’s current HD-fueled performance may not be sustainable over the long term."

But that’s true only if cable can soon get within shouting distance on HD tonnage.

  

March