Subs are going to be confused, and we’re only talking about one-way, so far. The CEA/NCTA deal was a breakthrough…can it be repeated for two-way? In our lifetime? By Mavis Scanlon Over the next couple of years, as more TVs are manufactured with built-in digital tuners, consumers who think that these so-called plug-and-play TVs are as easy as they sound may end up feeling like Elmer Fudd—befuddled and confused. Consumers that buy these TVs over the next year, especially current digital cable customers, may be in for a rude surprise when they discover they can’t get the same programming guides they are used to, or are unable to order VOD, without a set-top box. Consumers interested only in digital programming, without all the bells and whistles, still would have to call their cable operators. Rather than a set-top box, they will need a credit-card-sized card—dubbed a CableCARD by CableLabs—which is inserted into a slot in the new TVs and enables access to the operator’s network. The key for operators, who may have to deal with irate customers, will be to educate them about the new TVs and the cards. "It’s fraught with potential problems, of course, because of the old education issue," says Bob Van Orden, VP strategy and product planning, subscriber networks, at Scientific-Atlanta. "I am aware of a lot of activity on the cable side to train people so when these calls come in they know what to do. We don’t create those programs ourselves, but we provide a lot of raw materials and technical information." At Time Warner Cable, for example, most of the focus right now is on making sure customer service reps, operations staff, technicians and public affairs staffs are all up to speed on the new cards. The MSO, which has tested the new product in its Minneapolis system, initially will roll a truck for the first batch of cards customers request to ensure the installs go smoothly. NCTA also has gotten involved. Since late last year, the trade association has been distributing information packets to its member companies. On the face of it, it sounds almost as if the implementation of the new system of digital tuners in TV sets and cards defeat the purpose of buying a set that’s marketed as cable-ready. It is one way, however, to jump-start the transition from analog to digital without a wholesale disruption, when the congressionally-mandated transition to digital takes place. "It’s the beginning of an evolution in TV that will eliminate the need for a set-top," says NCTA spokesman Brian Dietz. One of the stated benefits of the two-way agreement, which is being negotiated, is that it will eliminate the need for set-tops for new televisions with digital tuners. But the set-tops won’t go away entirely. The 15% of the TV households that do not subscribe to any cable or satellite service right now will be forced to get a set-top to access digital video after the transition (that is, if they stay with their old analog TVs), as will the 70% of cable customers—some 50 million subscribers—who currently subscribe to analog video only. "We certainly think that most subscribers are going to want a set-top for a number of reasons," Van Orden says. "The set-tops provide services that the TV doesn’t and can’t, and they also keep up with innovation in a way that TVs can’t." Scientific-Atlanta already has begun shipping CableCARDs to operators, but it is not expecting to see a huge demand. "I don’t have the exact number [of cards shipped], but it’s very small," Van Orden says. "It’s probably a four-digit number…We really don’t expect to see a great deal of demand." One of the reasons for the lackluster demand for the cards is that subscribers with digital cable who upgrade their TV sets to get HDTV, for example, already are used to the interactivity the current digital set-tops provide. Two-Way Interplay Consumers who research their new TV purchases may be better off waiting until the two-way plug-and-play deal is sealed. Industry observers are hopeful a deal can be wrapped up sometime next year, but people are hesitant to estimate a time frame because of the intricacy of the negotiations. "The biggest problem right now is, quite frankly, everyone wants to be involved in the discussions," says Bob Zitter, HBO’s EVP of technology operations and chief tech officer (and a Vanguard winner this year). The sheer size of the group involved in negotiations is a big issue. Cable networks, cable operators, satellite operators, motion picture studios and consumer electronics and technology companies are all involved. "They have their work cut out for them," Zitter notes. Nearly 100 people attended a recent meeting in Chicago. "When you bring 100 people together, it’s a long negotiating process," NCTA’s Dietz says. Content protection is probably the No. 1 issue in the two-way negotiations. As Zitter explains, protection of content is important for the financial health of all players in the video food chain, especially the studios that rake in half their profits when a film is released to theaters, and the other half (for big hits, anyway) in other windows of exhibition after theatrical—home video, PPV, premium channels such as HBO and Cinemax, broadcast television and basic cable. "If high-quality copies are available early on in the exhibition window, then you wind up losing or hurting those revenues further down stream, or what they call the back end," Zitter says. What’s worrisome to content providers is what they see coming down the pike—widespread deployment of home networks, which would enable copied content to be viewed on various TVs, computers or devices connected to that network. The controls that are placed on how home networks handle content is a huge piece of the puzzle. "Protecting content in the digital world is more important than protecting content in the analog world, because in the analog world, although there was piracy, people couldn’t make copies that were as perfect as the original and they couldn’t move them around as fast as you can on the Internet," Zitter says. Encoding of digital content with copy-once, copy-freely and copy-never tags was a key part of the one-way agreement, but it gets a lot more complicated when IPGs and on-demand applications are taken into account. Considering the long history of animosity between the cable and consumer electronic camps, the one-way agreement was significant in itself. The two-way agreement, with all it involves, from content-protection issues to interactivity, will be the more far-reaching agreement, with a much broader consumer impact. And with the sheer number of parties involved in the two-way negotiations, it will be that much more monumental when it is ultimately concluded.

The Daily


Echostar’s Debt Mounts Following DISH Merger

Echostar’s 4Q23 earnings call Friday was full of questions about the future of the company following its combination with DISH, particularly as its debt mounts.

Read the Full Issue
The Skinny is delivered on Tuesday and focuses on the cable profession. You'll stay in the know on the headlines, topics and special issues you value most. Sign Up


Apr 25
2024 Cablefax 100 Awards Magazine Release: April 25, 2024
Jun 13
2024 American Broadband Congress Conference Registration is Open!
Jun 26
2024 FAXIES Awards Nominations Are Open!
Full Calendar


Seeking an INDUSTRY JOB?

Hiring? In conjunction with our sister brand, Cynopsis, we are offering hiring managers a deep pool of media-savvy, skilled candidates at a range of experience levels and sectors, The result will be an even more robust industry job board, to help both employers and job seekers.

Contact Rob Hudgins, [email protected], for more information.