Cable-Tec Expo: Cox's Esser: Cable Has To Compress Innovation Cycles

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Cox Communications president Pat Esser said the cable industry needs to cut down its product-revision cycles from years to months, to have the agility to meet changing expectations of the next generation of consumers.

Esser, who delivered opening remarks here Tuesday at SCTE's Cable-Tec Expo, said cable's innovation cycles historically have followed a five to seven year span. But in the consumer-electronics world, product cycles are measured in months -- if not weeks.

As an example of moving more quickly, Esser cited Cox's plan to launch an iPad app to stream live TV channels in the home in about a month. The MSO was able to develop the Cox TV Connect service in "about nine months from the day we said 'go' to when consumers are going to see it," Esser said. In the past, "that could have taken our industry three years to get out the door."

Cox president Pat Esser

It's a change for the cable industry, Esser said, which has been focused on customer service -- as opposed to the customer experience.

Motorola Mobility chairman and CEO Sanjay Jha, who joined Esser on stage for a question-and-answer session, said his company's product-revision cycle for mobile devices is about six to nine months. The wireless industry is a "bucking bronco" in terms of the amount of change occurring, he said.

"The last time I saw this [pace of change] was when PCs were at the top of their cycle, in the late '80s," Jha said, adding, "That's not to say that is sustainable over the long term."

In 2013, Motorola expects consumers to buy about 1 billion smartphones, and "my expectation is that nearly all of them will be video-enabled," Jha said. "This revolution is going to be driven by the consumers, and they want access to all their services at all times," he said. "They want to connect through content."

But it's a fallacy that people will consume all their content over wireless networks, according to Jha. The cost to deliver data over wireless is 30 to 100 times the cost of wireline on a per-bit basis, he said.

Esser noted that 80% of video streaming takes place in one of three places: the home, the office or at school. "Our network naturally exists in those three places," he said.

Social TV will increasingly play a part in the future of cable video services, with Jha suggesting the TV will serve pop-ups indicating what your friends are watching and then letting you to interact about the show.

Esser commented, "It's amazing to me that people want you to know what they're doing in their home." He quipped, "Would you like to know what [Time Warner Cable CTO] Mike LaJoie is watching on TV?" Jha responded, "I would absolutely love to know. It would help me find out what to watch."

Esser asked how Google's proposed takeover of Motorola will affect the company. Jha said "it's a little too early to say," noting that the companies currently are required to operate as two independent companies pending regulatory approvals. The $12.5 billion deal is expected to close by April 2012.

But, Jha added, "What excites me about this combination is the ability to bring a lot of Internet learning to what we're doing."

The biggest misperception of Motorola is that it's a "box" vendor, Jha said. About 25% of the company's Home businesses revenue is from software and services, and more than 70% of its engineers are software engineers. "We increasingly think of ourselves as a software company," he said.

To get a read on future trends, Cox about two months ago invited a futurist to give a presentation to the company. One of her most jaw-dropping predictions, according to Esser: "Human-embedded chipsets." In 20 years, she augured, chips will be implanted in people to improve their mental capabilities.

Said Jha, "The good thing about predicting the future is nobody can contradict you."