Cable, CE Try to Meet Added Demand for Over-the-Top Video

Differing specifications -- some open, others proprietary -- cable programmers’ reluctance to put content on devices without adequate copyright protection and limitations in contracts between cable operators and programmers may be hurdles to increased viewing of programming over devices in the home besides set-top boxes, some executives said. That may also hinder subscriber access to cable programming from devices that don’t use CableCARDs, some said. The NCTA’s seven principles to let subscribers buy video devices that can connect to any pay-TV providers’ service without a set-top (CD March 15 p7) show the cable industry is intent on getting content directly to devices, said some we surveyed. “Cable is committed to providing video content to consumers where and when they want it, on all possible consumer devices, and for those devices to be innovative platforms for new applications,” an NCTA spokesman said.

At the NCTA show last month, such trends were evident in speeches and on the show floor --including ways operators are adapting so over-the-top video will be consumed over the cable platform, some executives said. Many executives speaking on panels in Los Angeles discussed online video viewed on TVs, the iPad or both. Comcast CEO Brian Roberts demonstrated an iPad that can program a DVR and search for shows, and said the Apple product is the type of device his company wants cable services to work with (CD May 12 p6). Apple didn’t reply to a request to comment on the trends foreseen by executives.

Roberts’ demonstration at NCTA “is a good example of how the cable industry can leverage the innovation that’s going on throughout the consumer electronics industry to really enhance the cable experience,” said CableLabs President Paul Liao. “And I think you're going to see a lot more of that in the coming months.” The iPad, a long time coming, has a large screen to display high-quality images and a fast processor and incorporates touch and gesture to direct it, he noted. “Assuming that it is successful, it will change the landscape,” Liao said. Cable operators are all active in over-the-top video “because they understand that consumers want to have their content, any content, anywhere, on any device, at any time."

All over-the-top devices “suffer from the same problem: Lack of access to regular cable programming,” said TiVo General Counsel Matt Zinn. “Without direct access to cable programming using CableCARDs, CE devices can act as display devices for streaming cable content -- like the iPad -- but cannot display the cable programming … in a different user interface or add something to the cable application. That’s not to take away from the fact that it is useful to watch cable programming on a portable device. It’s just not a substitute for using cable-provided equipment as your video programming reception device in the home."

"The crux of the issue” of availability of video on every device is “around content protection,” said Lisa Pickelsimer, Cox Communications executive director of video product development. “That’s why that content is not readily available today on every device, because the programmers … are very concerned about the Napsterization of their content. Content costs a lot to produce and has a lot of value and understandably the producer wants that content protected.” CableCARDs provide such protection, and digital rights management offers another kind but lacks standardization, she said. “There’s really a need for a robust standard that can be used in that environment."

Larger-screen portable devices including tablets “are acting as a stimulus for the industry to look at how best to get content to those kind of devices and what the right models are,” said David Grubb, Motorola vice president of business development technology. “We do see that the industry is at an inflection point,” he said. “We're entering the era of Internet TV. It’s not just a few new features or IP bolted on to the video platform, but it’s really kind of an equivalent change from when the industry went from analog to digital. We definitely see that we're at the beginning of that shift, and certainly these tablet devices are certainly the poster children for the experience that the consumers will expect.”

Programming Contracts

With various technical ways to move toward Internet TV, the issue is how agreements including those between multiple system operators (MSOs) and programmers adapt, said executives from the cable and CE industries. “Access to cable content on other devices is really dictated by the programming contracts that the MSOs have with the programmers,” CableLabs’ Liao said. “To the degree that the device can be considered an additional outlet, another outlet to the cable service, full access can be easily obtained. To the degree that it’s a different experience, program contracts have limitations which may require some effort to be changed."

Customer expectations and tru2way deployment are behind the effort toward more-versatile viewing of video, Pickelsimer said. “I do think it’s a time for a focus by the cable industry in this area,” she said. “It’s less about devices on the marketplace than about consumer expectations and the lifestyle of the consumer today, which is one of a lot of multitasking,” she said. “For the most part, TV watching is a lean-back, lazy experience, and consumers want it that way. But if they can’t have it that way, they will reach out and seek alternative means."

"There are two very strong trends in the TV space: 3D and broadband TV,” said Brian Markwalter, a CEA vice president. CE companies and cable operators “together” must “figure out how to get content to these devices that consumers really enjoy, that includes time-shifting mechanisms like what TiVo brought to the world and iPads and smart phones and everything else,” he said. “We'll get through it. We'll figure it out. And it will be an interesting time as we do.” How to stream additional online programming over video devices in ways that are easily accessible to consumers is being worked out through partnerships between companies, and “some of this will be drawn from public standards groups or Internet standards,” Markwalter said. “There are definitely different ways to deliver video over-the-top that are not compatible. That doesn’t mean that the consumer doesn’t get something desirable and useful."

The mix of linear and online video applications at the NCTA show illustrates “how the cable industry recognizes the multiple ways that consumers consume content and the important role the cable industry plays in that arena, on the delivery side but also on the content side,” said LG Vice President John Taylor. “There’s just so much access to content that even three years ago we didn’t have,” but there’s still no “single silver-bullet business model” for it, he said. There is “an opportunity for the cable industry and broadcasters and manufacturers alike to come up with creative solutions for how to deliver content to consumers on a wide range of new devices,” he said.

NPG Cable sees demand for over-the-top video in an “explosion” of the amount of bandwidth each subscriber uses, said Chief Operating Officer Bill Severn. “Interest is definitely growing for plug-and-play,” he said. NPG has about 100,000 video subscribers in Arizona, California and Missouri. “As the content and devices evolve, consumers will gravitate and mandate that they have the fastest, most reliable broadband connection,” Severn said. “NPG is positioning itself to not only be that provider today, but have the network consumers chose as over-the-top evolves.”