Cable Engineers See Strong Potential in New IP Video Services

If anything, cable operators are seeking ways to extend their video hegemony with such new IP-enabled video products, services and other offerings as network DVR, video communications multi-screen video and cloud-based services, said executives of Comcast, Time Warner Cable, Cox Communications and Bright House Networks at the Society of Cable Telecommunications Engineers (SCTE) convention. “The future of multichannel video is robust,” said Time Warner Cable Chief Technology Officer Mike LaJoie. “There is a programming function that survives. That business is going to continue to grow and to change."

Comcast is “investing in and building out, for the lack of a better term, the digital ecosystem,” Comcast CTO Tony Werner said. By the end of 2012, Werner said, Comcast will carry virtually no more analog signals in its cable systems nationwide. Werner said Comcast is also moving to adopt new technologies, such as HTML5-based interfaces, and deliver content from “the cloud” because it sees the opportunity to provide video to customers wherever they want it.

Bright House Networks President Nomi Bergman said cable operators have promising opportunities to capitalize on new video services, such as multi-screen TV. She cited the Digital Entertainment Content Ecosystem (DECE) consortium’s UltraViolet digital-rights locker, which would allow a cable operator to offer movies for VOD purchase that could then be streamed on another display device later. “That’s a great example of where the technology is there,” she said. “But I think the business negotiation has to move along at the same time. … It’s more a business discussion than a technical issue."

LaJoie said cable operators will be able to “add value to customers” once they gain the rights to distribute video programming outside the home. “It’s a programming rights issue,” he said. “There’s nothing preventing us from a technological point of view from doing that. The [business] models have to settle out."

The cable industry must dramatically speed up its development and deployment of new products and services to compete, the cable executives said. “We're coming from a position of strength,” said new Cox Communications CTO Kevin Hart, who was formerly the chief information officer of Clearwire. But he said the industry’s “innovation and development cycles need to expedite themselves.”

Several executives said they're counting on a continuing wave of paranoia to motivate them and carry them through another very challenging period for the industry. They said this strong sense of paranoia is at least partly driving them to test new technologies and develop new products and services, just as it drove them in the past.

Werner said Comcast’s push to create and update its video products “in days and weeks, not months and years,” is stoked by a familiar feeling of paranoia about the threat posed by competing service providers. “We were paranoid that the satellite guys would kill us,” he said. “There were things we were afraid of that we didn’t need to be afraid of, and there were things we weren’t afraid of that we should have been.” LaJoie said “a little bit of paranoia is healthy.” He recalled the old saying: “Just because you're paranoid doesn’t mean people aren’t out to get you."

At the same time, the big cable operators are pursuing such new, non-video-centric products and services as home security and monitoring, commercial services, and cell backhaul because they see huge growth potential in each sector. “The opportunities we see far, far outweigh the risks,” LaJoie said. He said the industry’s traditional multi-channel video services already generate less than half of Time Warner Cable’s overall revenue. “That’s not because the business is dying, it’s because we have more growth in these other products,” he said.

For example, Hart noted that Cox’s commercial services unit still expects strong, double-digit growth, with wireless backhaul a big piece of that pie. Bergman thoroughly agreed. Business services are 10 percent, maybe 20 percent, of the revenue for any MSO,” Bergman said. “There’s so much potential for wonderful growth there.” LaJoie sees big potential in the continued expansion of cable broadband services. “This industry invented broadband. … Without that invention, I think we'd all still be using ISDN,” he quipped, referring to the Integrated Services Digital network technology deployed by telcos in the 1990s.

LaJoie said cable operators are well positioned to expand their fledgling mobile backhaul businesses, thanks at least partly to the rise of 4G wireless services. “Everybody talks about the wireless revolution, but the truth is a very, very small percentage of a wireless session travels over the air,” he said. “Most of it is over the wire.”