Miami— Cable technology will have to adapt to the forces of consumer electronics or perish in a storm of innovation and competition.
With the afterglow of the Consumer Electronics Show still evident, that's the message cable engineers heard repeatedly here last week, while examining the latest and greatest technology issues during the Society of Cable and Telecommunications Engineers' annual Emerging Technology conference.
On day one, industry analyst Paul Kagan told the crowd he'd seen evidence of the war for consumers between direct broadcast satellite and cable at the CES the week before. Viewing an array of broadband-enabled devices, "there was an umbilical cord there" that joined cable products with consumer-electronics devices, he said.
"I can see cable mating with the TV set, but I'm not sure whose genes the baby is going to get," he said.
The species might not be determined as of yet, but its potential to generate revenue for cable is coming into view.
Kagan projected the raft of new services — ranging from telephony to digital video recorders and even to interactive TV — will steadily boost the amount of revenue per subscriber from $70.75 this year to more than $138 in 2012.
"I'm pretty sure that the better cable systems in the U.S. will be grossing more than $138 well before 2012," he noted.
The growing relationship between consumer electronics and cable technology was the focus for a panel of vendors.
With issues ranging from quality-of-service to wireless technologies to in-home wiring, the recurring message to engineers was: Cable needs to get a handle on an array of multimedia consumer-electronics technologies before the first subscriber calls up and complains about a broken home network.
The link to consumer electronics is clear for Charter Communications Inc. executive vice president and chief technical officer Steve Silva.
Cable operators are faced with the choice of either embracing consumer-electronics makers or holding back and creating competing gear, he said.
"I choose to embrace CE," said Silva. "I choose embracing the knowledge and the means they have. This industry right now, more than ever, needs that jolt of innovation."
Richard Barrett, director of product marketing for Microtune Inc., took the crowd through an analysis of various wireless home-networking schemes. Bluetooth, which Microtune includes in its product line, will find its way into cable products, he said.
"I think Bluetooth is going to be a must for residential gateways," he said. While it has lower throughput compared with wireless schemes based on the Wi-Fi 802.11 standard, "for most home applications, you don't need 10 megabits of wireless Internet content."
Much of the confluence for these new devices is in home networking. But there are still many pitfalls to work out for MSOs, said Comcast Corp. vice president of digital products Mark Hess.
One potential pitfall is confusing the willingness of early adopters with technical expertise.
"We cannot overestimate the sophistication of the consumer," he said. "Early adopter does not necessarily equal geek."
Instead, "where cable TV can consistently add value is to making it deadly simple for the consumer," he said.
Cablers also can't underestimate the ability of subscribers to drain bandwidth, and "never underestimate the consumer's ability to blame us for something he bought that doesn't work," Hess said.
He also questioned how much the new multimedia, multi-device home network would demand from cable truck rolls in the future.
Fellow panelist Brian Holmes, a senior associate at IBI Group, answered, "I think the implication is you won't be able to keep truck rolls down below an hour."
Holmes suggested MSOs find a way to make the process of in-home wiring a revenue generating service — "where the MSO can go and do the installation, and do it right, install the correct media and charge for it, and have the customer be happy."
In the end, if cable can't get a handle on the technology issues surrounding the marriage to consumer electronics, it could end up losing the war for subscribers to satellite competitors.
Silva noted that the direct-broadcast satellite industry is ahead in deploying digital video recorders to its customer base, and said that nothing was stopping EchoStar Communications Corp. or DirecTV Inc. from creating home gateways to shuttle video signals within a home network.
"They have their sights set on this," he said. "So I'd say we are aware of what we have to do."