18 Days to CableCARD: How Many?


In 18 days — on the Thursday fronting the long weekend that is July 4 — cable providers face a deadline: Their larders must be stocked with enough removable security cards to satisfy all customers who request them.

And after a thorny year of preparation, a final and pressing question remains. How many cards is that, exactly? (Or even roughly?)

The answer matters for several reasons: One, there’s a $75-ish cost tacked to each cable security card. This isn’t like knowing how many boxes to roll out node-by-node. It depends, nearly entirely, on consumer demand.

Two, makers of the cards (Motorola Inc. and Scientific-Atlanta Inc.) need to know how many to make, now and later. Ordering gaps make for production-line slowdowns.

Three, running out of cards could bring bad mojo to the industry: Regulatory asks greeted with a puckered brow; business discussions stunted.

The industrial food chain that accompanies this deadline — which links cable to consumer-electronics and retail leaders — is just too young to shoulder too much trouble.

A quick review: The cards, handily renamed “CableCARD” (from “point-of-deployment” or POD) last year, are for people who walk into a store, walk out with a digital cable-ready device (mostly HDTVs to start), and decide they want a premium/scrambled video service from their local cable operator.

It’s precisely that point-of-sale decision that blows such a haze of perplexity into the “how many” math.

Will Consumer Bob shell out $200 to $300 more (less with time) to buy the TV with the built-in cable descrambler? Is there a TV for sale right next to it, identical but for the lack of CableCARD slot — and the extra $200 to $300 outlay?

And if Bob buys the digital-cable ready (“DCR”) TV, will he also buy the premium digital cable video package?

In short, nobody knows. Lots of people worry about why people won’t want the sets — insert every flavor of “they’re not two-way” here. But the truth is, nobody really knows if consumer demand for digital cable ready TVs will run large, medium, or small.


What’s known is this: CE manufacturers are putting some pretty big numbers out there. Last month, the Consumer Electronics Association notified Cable Television Laboratories Inc. (partially via press release) to expect 500,000 CableCARD TVs in stores by around Labor Day; 1 million by the December shopping season.

Liar’s poker, or humble facts? (Before answering, imagine yourself in a room, pointy elbow to pointy elbow with your meanest competitors, sharing sales forecasts.)

The individual announcements from the CE community appear to support a steady rise in digital cable ready devices. Among those readying DTVs with built-in CableCARD receptacles: Hitachi, Mitsubishi, Panasonic, Pioneer, Samsung, Sony, Thomson, Toshiba.

All express their plans in terms of how many TV models will include CableCARD slots. Sony says a dozen, for example. Ditto for Hitachi. Nine for Samsung; 10 for Toshiba; and on and on. It’s not all that difficult to imagine the CableCARD slot becoming as much a part of a digital TV as the power cord.

For cable, the hard part remains figuring out how many CableCARDs to order.

Lacking anything resembling a fact about consumer demand, the “how many” math varies, largely by opinion. Conservative thinkers say “overstock.” Skeptics say “overstock practically,” applying a larger range of filters, which trims the number.

A filter example: Of the million “host” devices in stores by the holidays, how many will be purchased by cable customers? Of those, how many sets will be activated for premium services?

Maybe half are bought by cable customers, and 10% buy premium services. The million available units tumbles to 50,000 needing security cards. And that’s without spreading the million units over multiple MSOs, with different subscriber counts and geographic footprints.

Either way — conservatively or skeptically — nobody will really know what retailers can do with digital cable-ready devices, until they do it.


This whole topic will likely be a rich source of hallway talk at this week’s SCTE Cable Tec-Expo in Orlando, Fla. Across the industry, cable system employees of all stripes spent the past year mobilizing toward a wholly uncertain outcome.

It wasn’t a particularly enjoyable preparation. Tons of work. Special task forces. (But wait, don’t forget your regular job.)

Indeed, getting ready for CableCARDs tapped into multiple departments: Device and customer provisioning, billing, inventory/warehouse management, public relations, business development, customer service and technology.

To translate, in order: How are devices and services electronically verified/initiated? How are CableCARD services identified to billing systems? How do cards flow from warehouses to systems, quickly and efficiently? How are retailers motivated and informed about the services that run (and don’t run) on CableCARD devices? How do customer-service reps know to accept and resolve customer questions? How do you make the cards work?

The hardest of the technically hard work is done. Headends are upgraded. Task forces are standing by to install the early CableCARDs, and to field card-related customer service calls.

Satisfying the first few Customer Bobs with new digital TVs will likely be manageable, if only because everybody’s on “high alert.” Plus, it’s a cold start.

It’s a heavy volume of CableCARD devices, coupled with the endlessness of software upgrades, that will season the landscape for future cable generations.

For now: Best not to run out.

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