Suddenlink CEO Kent: Embracing Over-the-Top VOD

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Suddenlink Communications CEO Jerry Kent said one of the key reasons the MSO selected TiVo DVRs and set-tops for its next-generation video services was to let customers access broadband-delivered content — including YouTube clips — right on their TVs (see Suddenlink Turns To TiVo).

But wait a cord-cuttin’ second. Won’t offering access to Internet-delivered video erode the value of the TV services that form a major part of Suddenlink’s business today?

“We wrestled with that very issue,” Kent told me in an interview today.

Ultimately, though, Suddenlink concluded it could either swim against the Internet tide or go with the flow. “Our customers are going to get broadband content [on TV] one way or other,” Kent said. “We can either get on board and bring them premier entertainment options from many different avenues — or we could try to ignore it and protect our customer base.”

He elaborated: “In the end we looked at the experience of the music industry, which just ignored the Internet and that completely demolished their business plan. We looked also at the newspaper business which completely embraced the Internet and turned dollars into digital dimes.”

In addition to YouTube content, Suddenlink’s TiVo boxes are planned to deliver music services such as Pandora and Rhapsody, as well as movie info and ticketing from Fandango.

Asked about other services — like Amazon.com — Kent said the company is still negotiating with content partners. He did say Suddenlink would not necessarily get a fee for Internet content the service enables access to. Note that the MSO last year announced a deal with Blockbuster to provide VOD services under the “Blockbuster” brand, while TiVo also has a partnership with the movie-rental chain (see Blockbuster Inks Marketing Pacts With Suddenlink, Mediacom and TiVo Teams With Blockbuster).

Suddenlink will deploy TiVo Premiere DVRs, which use an interface running on Adobe Flash. That’s intended to allow third-party developers to take advantage of the TiVo platform for new interactive TV applications, said president and CEO Tom Rogers. But cable operators still maintain control over the services and content they offer to subscribers.

“What we think is critical is that the cable operator be in a position to frame that experience,” Rogers said.

Suddenlink chose to go with TiVo rather than traditional cable-technology vendors because a) the TiVo user interface is better and b) the company is much farther along on the broadband front, Kent said.

“Our embedded legacy set-top [supplier] base has not been particularly innovative over the last several years,” Kent said. “I mean, look at what they offer. And look what we can bring to market with TiVo.”

RCN cited the same issues when that operator made the same decision to deliver cobranded TiVo DVRs last year (see RCN Will Follow TiVo’s Path). “Companies that are beholden to Motorola and Scientific Atlanta are not truly going to be able to embrace the convergence of TV and the Internet,” RCN CFO Mike Sicoli said at the time.

Just like RCN, however, Suddenlink will not exclusively rely on TiVo DVRs and set-tops. “We have an embedded legacy base that we’re not planning on abandoning,” Kent said. Interactive program guides Suddenlink currently uses include i-Guide, developed by the GuideWorks joint venture of Comcast and Rovi, as well as the Scientific Atlanta Resident Application (SARA). The MSO uses set-top boxes from Motorola, Cisco Systems and Pace.

Suddenlink and TiVo will work together integrate the operator’s VOD systems, including those from SeaChange International, with the new boxes.

Rogers said one noteworthy detail of the Suddenlink deal is that it’s the first time TiVo will deliver non-DVR set-top hardware to an operator. “It gives us an ability to really provide a full suite of solutions for cable operators,” he said.

And because the TiVo retail boxes are already CableCard-enabled, MSOs are able to quickly take the off-the-shelf hardware and deploy it after some software modifications, Rogers added.

Kent, citing competitive reasons, wouldn’t disclose which markets Suddenlink will debut the TiVo Premiere offerings but said the first systems will be in the West, which would seem to indicate somewhere in Texas or Oklahoma. Suddenlink’s footprint spans Arkansas, Louisiana, North Carolina, Oklahoma, Texas and West Virginia.

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