Building the Business Case for OCAP
The OCAP Developers Conference at The Cable Show ’07 turned out to be a popular event for attendees. The OCAP conference was a precursor to The Cable Show in Las Vegas, but most of the sessions were packed during the pre-conference sessions on Sunday and Monday.
Sunday’s "O is for Outlook: MSOs on OCAP Deployment and Plans" session served as an outline for where the cable operators are in terms of deploying CableLabs‘ OpenCable Application Platform (OCAP). Subsequent sessions the same day drilled down on how to build an application using the OCAP toolset while Monday’s "Economics 101: The Business Case for OCAP" provided details on how cable operators, programmers, developers and advertisers will benefit from the platform.
"This will be a look at the fundamental economics of OCAP," said moderator Kevin Leddy, who is Time Warner Cable‘s senior vice president, strategy and development. "How does this new middleware affect the economics of the cable business? Where is the money? What is the business proposition?"
Leddy said OCAP provides a middleware layer in set-top boxes, TV sets and other devices that allows applications such as electronic program guides to be written once while working in every cable operator’s footprint. For developers this means creating an application once for all of the MSOs to use. OCAP provides portability for devices The attraction of OCAP to consumer electronics manufacturers, and the Federal Communications Commission, is having plug-and-play devices available in retail stores while set-top box manufacturers can make simpler boxes that are portable to any system as long as they have separable security. Cable operators can benefit from the breakup of the set-top box duopoly as well as the reduction of capital expenses if subscribers buy the boxes themselves instead of leasing them from their cable operators.
Mark Hess, Comcast‘s senior vice president, business and product development, said cable operators have spent billions on buying up set-top boxes since they were first introduced. Hess said cable operators will also benefit from the two-way capability of the OCAP set-top boxes because better diagnostics means fewer truck rolls.
"It’s silly that I can do more with this," Hess said while holding up a cell phone and comparing it to current set-top boxes. "We need to build an ecosystem that allows for expansion; one platform that is simple and has a common interface. All of that adds up to new revenues and capital savings that make this (OCAP) imperative."
Joan Gillman, president of Time Warner Cable’s media sales, said OCAP gives cable a platform to distinguish itself from the competition.
"The opportunity for cable is a simple, streamlined solution that allows tests to scale seamlessly," Gillman said. "The interactivity gives viewers a reason to stay with live TV. It gives us a better opportunity to measure what we do in that environment."
Gillman said OCAP can provide Internet-ad-like capabilities with better measurements for advertisers while new technologies such as addressable ads will also be attractive to them. Some of key issues to address going forward are getting the backoffice systems to work effectively with OCAP and to develop templates to increase the automation process.
"We need to get the (ad) industry engaged and show value," Gillman said. – Mike Robuck
