BOSTON – Five of North America’s leading cable technologists believe that the industry must continue accelerating the pace of change and innovation to keep up with rapidly shifting consumer trends, as well as moves by rival service providers.
Speaking at the Cable Show here Monday, top tech execs from Rogers Communications, Comcast, Time Warner Cable, Cox Communications and Mediacom Communications said cable operators must keep developing new video products and apps faster and faster to stay relevant in the emerging multi-screen world. They also believe cable providers must build out their new video platforms and ecosystems quickly to attract fresh funding, partners and subscribers.
Mike Lee, managing partner of Rogers Venture Partners (the company’s investment arm) in northern California, said Silicon Valley firms and venture funds are showing more interest in working with cable operators on video-related projects these days, after years of concentrating on mobile services. “The Valley has been more predominantly mobile-focused for the last four or five years,” he said. “As mobility matures, I think video is next up on the hit list.”
But, Lee argued, the cable industry must still make itself more amenable to Silicon Valley’s interests. “We have to find ways to make it easier to work with us and be more flexible,” he said.
Tony Werner, executive vice-president and CTO of Comcast Cable, called for continued heavy investment in video and broadband infrastructure and services. He said cable providers must keep pumping out new products and platforms to stir subscriber interest. “We’ll see which ones have stickiness,” he said, citing Comcast’s recent experiments with Skype on TV, home security, energy management and monitoring, and its new X1 cloud-based, IP video platform.
Peter Stern, executive vice president and chief strategy officer of Time Warner Cable, said MSOs must find ways to deliver “the full array of content” to every video-capable device both inside and outside the home. Currently, content rights contracts with programmers generally prevent cable providers from offering their video lineups outside the home.
“People don’t just watch video inside the home anymore,” Stern said. He noted that “30% of viewing now takes place outside the home” and cable must facilitate that.
Stern also noted that 7 million of Netflix’s 25 million customers subscribe only to the video streaming service, potentially costing U.S. cable operators about $45 to $50 per subscriber. “Most of those may have been over-the-tops anyway,” he said. “But every one is a huge, huge loss to the [cable] industry.”
J.R. Walden, senior vice president of technology for Mediacom, said the “biggest piece” for his company has been learning how to innovate without big budgets or large numbers of product developers. MSO officials began tackling that issue recently when they decided to develop their own iPad app in-house rather than wait for tech vendors to do the job for them.
“Mentally we had to get over that,” Walden said. “That was a real challenge for us. And we’re still not there yet.”
Werner observed that it used to take Comcast’s group of 400 legacy developers about 18 months to come up with a new product app. Now, he said, it takes a team of 12 new-platform developers just five to seven weeks to develop a new app. In fact, his CEO Neil Smit noted earlier in the day that there have been over 400 software updates to the company’s new X1 platform in the past year, a pace unheard of in cable until now “That’s a very different way of doing business for us and for the cable industry,” he said.
During the conference’s opening general session, Time Warner Cable CEO Glenn Britt mused out loud that end of the age of the set top box itself is on the horizon, “although people from Cisco and Motorola probably don’t want to hear that,” he said.
“The world is coalescing around IP standards … and all devices are being made to those standards… That’s the future.”
– Cartt.ca staff
