NEW YORK – With innovation in video exploding in all directions, the economy worsening and with ever more programmers looking for ways to go direct to the consumer with their shows, is the tried-and-true (and lucrative) traditional cable TV business in danger?
In a word, no.
But, with innovation in video exploding in all directions, the economy worsening and with ever more programmers looking for ways to go direct to the consumer with their shows, are people looking for a way around the tried-and-true (with older, inflexible technology) traditional cable TV business?
In a word, yes. Heck, even some of the cable companies are looking for ways to get around their own set top box technology in order to better serve their customers.
During a session called “What’s Connecting on Connected TVs?” at the CTAM conference in New York, delegates heard that Americans who watch a lot of Netflix, Hulu or have a Roku in their homes are usually also some of the best customers of subscription television, leading some to muse that maybe, there’s really nothing to worry about.
Roku, which is a nifty little box that delivers web content to the television, counts more than 300 content partners, from traditional suppliers like Disney to newer ones such as Rovio, makers of Angry Birds. Two years ago, said Chuck Seiber, the company’s vice-president of marketing, users were streaming about seven hours per week with his company’s device but that has now risen to 12 hours.
Tellingly though, almost all Roku customers still also have a subscription TV service of some sort, he added. “It is true that some of our customers have decided the content on our device is sufficient for them but it’s clear they are making some pretty big tradeoffs,” explained Seiber. “I don’t think devices like Roku are a threat, certainly in the short term.”
When Comcast, the biggest U.S. cable company, analyzes its data, it finds that the folks who love their Netflix content simply consume a lot of video from all sources. “Customers who subscribe to Netflix also tend to be customers who subscribe to more VOD than others,” explained Sam Schwartz, president of Comcast converged products.
Comcast, however, is not warming itself with that security blanket and has been at the forefront of innovation in getting its customers the video they want, around their traditional cable architecture. It just takes too long to upgrade and innovate the hardwired, proprietary cable boxes (some of which have been in use for years and are expensive to swap out). There are millions of developers writing for the various IP platforms, or hundreds of times more than developers in the RF space.
“It’s always been a challenge to innovate quickly on the set top,” said Schwartz. So, through its Xfinity brand, Comcast is bringing thousands of VOD titles to customers on their laptops, tablets, phones and connected televisions. It’s delivered to the home on the same wire, but via IP.
The company is also in the middle of a test in Augusta, Ga., of a new IP-based set top powered by Intel and built by Pace that will allow customers to seamlessly search for content and display it on any device. For example, when searching for content on a typical cable box, customers have to search the linear line-up first, then VOD, then maybe the SVOD or FVOD content line-ups.
The company’s new “Excalibur” project will eliminate all that, making the customer experience, especially search, far better. For example, if a sports fan wants to search for their favourite team’s games, he just has to enter the team name – and if desired, set his DVR to record all the games, no matter what channel it’s on, with one click.
The platform also offers Facebook integration and delivers Internet radio leader Pandora, too. Comcast plans a mass market rollout of the product in 2012, Schwartz said.
When it boils down to it, people like their TV and radio, don’t always want to create their own playlists and find cable provides value for their money. The more flexible it gets, the better it will be for everyone.
Recent CTAM research shows that 85% of video app users report watching the same amount or more of regularly scheduled TV since they started using those apps on their tablets or smartphones. Almost half (46%) report being more engaged with the programs or networks associated with the apps that they use.
What all this means is while there are certainly many more ways to get video, the newcomers are not killing off the tried-and-true.
“The industry is holding together,” Schwartz added.
Greg O’Brien is in New York this week covering CTAM NYC.
