Cable Engineers Urge More Flexible Packages to Counter OTT Threat
NEW ORLEANS -- In a move likely to raise industry hackles, some senior cable engineers are pushing for cable operators to adopt more flexible programming packages to stave off growing competition from such over-the-top (OTT) video providers as Apple, Netflix and Google. Without using the dreaded “a la carte” term, cable technology executives at the Society of Cable Telecom Engineers (SCTE) convention last week urged their counterparts to consider breaking up their traditional subscription packages into smaller chunks of channels and shows. Now that Internet video providers are offering consumers the ability to order individual shows, the engineers said, cable operators should think about changing their decades-old practice of only selling broad tiers and packages.
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"Give them the content they want,” said Robert Howald, customer systems architect for Motorola. “Sell it in ways they want to buy it,” he said. “There might be some flexibility that has to be brought to bear there as people get comfortable, or they start using more over-the-top” video. Over the past several years, consumer advocates and a handful of cable operators have pushed cable programmers for the right to distribute a la carte programming packages to subscribers. Most operators and programmers have firmly opposed the idea, saying it would hurt, if not destroy, the industry’s long-standing financial model.
Treading a bit cautiously, Howald didn’t actually use the “a la carte” term in suggesting alternatives to the industry’s current subscription models. Instead, he proposed that cable operators concentrate more on offering consumers more convenience and flexibility in the ways they package programming. He also urged operators to start integrating Web video into their programming offerings, especially with both OTT players and consumer electronics firms seeking to generate fresh revenue by pumping Internet video to broadband-connected TVs, Blu-ray players and other CE devices.
"We are entering the Internet era of TV,” Howald said. “We believe service providers can flourish in the Internet era by focusing on becoming the consumer’s retailer of choice for all video experiences.”
CE firms that sell video directly to consumers could take revenue away from the premium channels distributed by cable operators, said Walter Ciciora, a technology consultant and former vice president of technology for Time Warner Cable. But, he noted it’s still a “difficult business” for CE firms. Cable operators should still benefit from OTT video services because consumers need a broadband subscription to reach the content, he said. “What we've got to do is make sure that what we offer is easier to use, is higher quality, and satisfies the needs so folks don’t go off and go over-the-top."
Other cable technology executive expressed confidence that operators can meet the growing OTT challenge by relying on their superior video expertise and experience and extensive delivery networks. “We have a bunch of different tools to deliver the video that customers want to watch,” said Steve Reynolds, Comcast senior vice president of customer premises equipment and home networking. The company, like several other cable companies, is now piping broadcast and Web video fare to TV sets, PCs, and potentially mobile devices, he noted.
The senior engineers quibbled over whether cable operators should focus more on selling linear programming or on-demand content from now on. John Chapman, chief technology officer of Cisco Systems’ access and transport technology group, argued that on-demand video is the wave of the future. “I think linear is a diminishing model,” he said. “There will be more and more content on-demand.”
On the exhibit floor, equipment suppliers were hawking gear and software to help cable operators deliver Internet video to home TV sets, PCs and mobile devices. Other vendors, such as video-on-demand tech supplier Concurrent Computer, pushed technology designed to help cable operators add OTT video to their product offerings.