Cable has embraced the digital and high-definition TV (HDTV) revolutions in the residential cable market. Most major cable operators have already launched all-digital offerings with as many HD channels as their available bandwidth permits.
Now the digital and HD revolution has finally come to the hospitality market. Most of the major hotel chains have pledged to upgrade their rooms to HDTV technologies within the next few years.
The hospitality market has been typically served by cable through a basic free-to-guest service with additional premium channels. A few cable operators have made forays into the hospitality market in specific regions (Honolulu, Las Vegas and New York City), but from a corporate enterprise solution, few have been able to capitalize on this market. This commitment to digital HDTV represents both a risk and an opportunity to the cable community. Market needs The hospitality market has become pragmatic in regard to the core product requirements of an interactive television, in-room entertainment system. Games, Internet on the TV, room service, shopping and other inventive services – somewhat clumsy and awkward for the end user – never proved to add much revenue to the bottom line when compared to the cost to develop, capitalize and support.
To that end, those services have failed to translate into core requirements. Other features, such as account review and checkout, were once deemed necessary, but few guests actually use them, and most hotels have adopted the standard of sliding the bill under the door at the night of the scheduled checkout, circumventing the need for a guest to actually check out.
What have emerged as today’s primary requirements are a high volume of digital and HD programming and an interactive program guide.
At first glance, it would seem that cable is in a great position to serve this market. These are the services that cable operators provide in their residential markets today. So why has cable not addressed it? Cable’s risk Cable’s free-to-guest services have been eroding over the years with On-Command’s alignment with the satellite providers for this basic service. If a cable operator’s physical cable already "passes by" the hotel, then this definitely represents a lost opportunity.
Cable’s future within the free-to-guest market is in jeopardy. The current trend by the hotelier and consumer electronics (CE) industry has been to develop a proprietary encryption strategy called Pro:Idiom adopted by Sony and LG. This encryption mechanism is not compatible with cable’s encryption standards (neither Cisco/Scientific Atlanta’s PowerKey nor Motorola’s Digicipher).
If hotel rooms are equipped with HDTV sets with Pro:Idiom encryption, cable has two options to avoid being shut out of this market: build mini-headends at every hotel or build a new and separate RF distribution network in parallel to the residential network. The mini-headends within each hotel would convert cable’s standard encrypted signals to the proprietary Pro:Idiom encryption scheme. While this solution is technically feasible, it is not financially viable. Estimated at $1,000 per channel to process this conversion, the headend costs scale linearly with every HD channel added per hotel. With the number of HD channels projected to be in the hundreds, the future costs would be exorbitant. The other option is to build out a separate "hotel" RF distribution network and overlay it onto the residential RF distribution network. But this option is also very expensive and may only be viable in certain markets or sub-sections of the plant where there is enough hotel density to justify the expense.
So, while the technology to perform this decrypt and re-encrypt is starting to become available and overlay is an option, both solutions are less than optimum. The question must be asked: Why should cable bear the expense and operational complexity just to defend services it is best positioned to offer natively?
With the loss of free-to-guest revenue, cable operators may also compound their opportunity cost by the potential loss of revenue from transactional video on demand (VOD), high-speed data and commercial phone. Cable should not be on the defensive, but should go on the offensive. Cable’s opportunity The case for cable to re-engage in this market by way of free-to-guest on demand is clear: Cable is today’s most experienced provider of VOD, with billions VOD streams streamed annually.
In terms of technology, the residential VOD system provides greater reliability than disparate VOD servers, and cable’s centralized server architecture has minimized the complexity of content distribution, with one or two locations capable of serving each market.
As for operations and support, every residential field technician can provide service. Even within a small city market, a cable operator may have around 400 field technicians available to support the hotel – in comparison, the incumbent providers may have one or two technicians per region.
Another advantage is that millions of cable subscribers who travel and use hotels in the U.S. market already are familiar – mostly positively, one expects – with cable’s on-demand and growing HD programming. Technical components Cable has evolved digital and HD services into a compelling suite of services on the residential side. With relatively small technology enhancements in the following technology areas, the residential solution can bridge the technology delta required to offer a similarly compelling solution for the hotel market. (See Figure 1.) Double post accounting: What this means is that a cable hotel VOD solution must post VOD purchases to both the traditional cable billing system and to each hotel’s billing system or property management system (PMS), where each instance of PMS may require a unique software interface – hence, posting twice to two unique billing systems or double post accounting.
This may be one of more complex problems to resolve, and it has kept cable operators in the past from being able to offer a hotel VOD solution. But today the problem is well-understood, and there are working solutions in the field. Fielded solutions do this by inserting a transaction router between the business management system (BMS) and the cable billing system. This transaction router monitors all transactions, and for residential accounts, the router just passes the transactions through to the cable billing system. For hotel accounts, the router effectively doubles the post transaction so that both the cable billing system and the hotel PMS both receive the billing post.
Additionally, the router employs some simple logic regarding responses between both billing systems. This effectively makes the transaction router transparent to both billing systems and the BMS.
VOD client: The current residential VOD clients are perfectly well-suited to be used in hotel market. It is a relatively simple, intuitive and by far the most successful on-demand application. The residential VOD client, complicated by the sheer number of categories and titles, can be simplified even more by reducing, targeting and optimizing the content mix to the hotel guest to include categories such as Hotel Hits, Adult, Free-On-Demand, Music-On-Demand, Kids-On-Demand. Access to the services can be controlled through entitlements or through channel map manipulation by using existing interfaces into the set-top box controllers.
Content and security: Can cable get access to the hotel content, which is offered closer to the theatrical release date than content released to cable’s residential VOD market?
From the perspective of studios, cable’s encryption technology arguably represents the most secure mechanisms available today to distribute content to the customer. Content is distributed in encrypted form between content aggregators and the VOD server sites. Typically, cable operators provide physical security by keeping the servers under lock and key in facilities with very regulated interconnects to the outside world.
Moreover, when ordered and streamed to the end customer, each VOD session is uniquely encrypted per order and keyed to that exact set-top box. This is far better than any other distribution method available. Both the Blu-Ray and erstwhile HD-DVD formats are are physical media wherein the same technology employed by the studios to create DVDs is readily available in the CE market to duplicate the medium. To the incumbent hotel VOD solution providers, distributing 100 Gigabytes of HD movie content to each property represents an operational complexity; to the studios, it represents a security risk by having so many digital copies proliferated across so many "less than secure" hotel basement locations.
Additionally, cable’s current infrastructure supports the most advanced analog and digital content protection mechanism with support for Macrovision on analog ports, and for digital ports there is content protection through the 1394 and high definition media interface (HDMI) through the high definition copy protection (HDCP) protocols.
All of this means cable offers the most secure, end-to-end content distribution and delivery system available to ensure that the newest and latest released content from the movie studios is protected.
An additional point regarding content is that cable may also be able to offer services that are exclusive to cable’s delivery mechanism. StartOver, for instance, allows users to restart broadcast content from the beginning of the episode within the given broadcast window. LookBack and CatchUp are similar, with LookBack allowing the user to restart broadcast content within the entire prime-time window and CatchUp allowing the user to play previously aired episodes within a given broadcast series. All of these services are unique cable services that are extremely relevant, valuable and applicable to the hotel market.
Service control: A residence is similar to but different from a hotel room in its statefulness. That is to say, while service to a home is installed and provisioned in timeframes of months at a time, in a hotel, the room changes state every time a guest checks in or out. The system must be able to automatically configure the channel map or authorization of services to reflect the state of the room. Typically, on-demand channels are removed or the on-demand service is de-authorized when a room is in a checked-out state and added or authorized upon check-in. This behavior prevents movies from being accessed or ordered when the room is not checked-in.
This capability already exists through either Business Operations Support Interface (BOSS), Business Applications Support Interface (BASS) or Wirelink protocols. The current cable billing services do this today, but not at the same frequency within an account as required for the hotel market. These same basic mechanisms – which enable personal guide settings, parental control setting and PINs – may need to be cleared for the next guest.
Channel map: The hotel market also requires a unique hotel channel map. One of the key drivers for the hotel solution is an HD offering, and this is the basic premise when generating the hotel VOD channel map.
Today, most cable systems simulcast both the SD and HD variant of the same programming to the residential market. The SD instance is typically located in its historical low-number position within the channel lineup, and new HD channels are grouped together in an upper channel range. If the hotel is fully HD, then there is little need to simulcast both an SD and HD instance. In that light, cable may want to rethink how the channel map is constructed in a scenario where HD is the "standard."
Pay per view (PPV): The cable PPV Channels need to be removed from the hotel channel lineup because of the different billing mechanisms involved with PPV vs. VOD. The PPV billing purchases do not flow through the common billing interface (CBI) between the business management system (BMS) and the cable billing system and thus are not routed through the billing services gateway. So, while a guest can technically order PPV and the master hotel account in the billing system would have the posted PPV charge, there is not a mechanism to post the charge to the room and hotel PMS via the hotel provisioning system (HPS).
Hotel-specific channels: There may be a need to support a quantity of channels specifically for the hotel VOD market and specifically for each hotel. These include powerup channel (default set-top poweron channel); barker channels (hotel VOD marketing loop); and in-house channels (character generators, looping videos, security channels, etc.)
These channels could be generated locally within the hotel or broadcast centrally from the headend to all hotels.
The powerup channel would most benefit by being broadcast centrally to all hotels. This would be a hotel VOD generic video broadcast to all hotels. It is envisioned that this content would have a quarter screen, full-motion video with looping trailers and instructions on how to use the remote and on demand system. The rest of the screen would contain graphics detailing how to "channel down" to H-MOD and to H-AOD. This content would need to be developed. It is estimated that this channel would be in SD and would require 3.75 Mbps of broadcast throughput.
Barker and in-house channels can be generated locally within the hotel and put either into the analog or digital tier. The analog tier could use any analog source (DVD player or character generator) and an analog modulator. The digital tier could also use any analog source and a device such as the EGT Hemi that real-time encodes sources and performs and add/drop and quadrature amplitude modulation (QAM) modulates in RF.
Guide: Most cable operators have the guide configured to display all channels available with the interactive program guide (IPG) whether the subscriber has subscribed to the service or not. The guide is presented in this manner in order to up-sell the subscriber additional services. In the hotel, it is preferable to display only the channels to which a guest can tune.
Grid-guide display: The grid-guide displays five channels at time. Hotel Hit and Adult on-demand offerings should be "visible" in the guide, off the powerup channel. The powerup channel can be configured through the various guide settings for all (SARA, Passport and MDN) platforms. For example:
Ch. 1997, hotel adult movies on demand
Ch. 1998, hotel hit movies on demand
Ch. 1999, powerup channel
Ch. 2, ABC-HD
Ch. 3, CBS-HD
To that end, it is important to place the Hotel Hits and Adult offerings at the end of the current channel lineup so that they will wrap around and be adjacent to the lowest channels in the lineup. The powerup channel is either a broadcast channel available everywhere, or it could be defined globally but with the source of the video locally generated at the hotel. One recommendation is to broadcast the powerup channel globally to all hotels, with the channel content being generic movie trailers and instructions on how to use the system.
In-room devices: Cable set-top boxes are, by their native designs, compatible with TV sets or display technologies available in the CE market. Having purchasing options of the entire CE market and not the limitation of only two vendors should be a key advantage the hotelier and cable industries.
Cable set-tops have just about every possible interface available, whether SD outputs such as RF channel 3/4 and composite video out and the HD outputs of 1394, DVI, and component PbYPr and HDMI. Additionally, these devices have multiple audio outputs of baseband, optical and RF digital audio, and, of course, within the HDMI interface, there is embedded digital audio. What this means to the hotelier is that cable’s set-tops are compatible with every CE TV set on the market, and thus the hotelier can take advantage of the consumer market when purchasing HDTV sets and is not limited to proprietary sets designed exclusively for the hotel market.
For virtually "boxless" installs, IR snorkels are available that allow set-tops to be hidden from view within the room’s furniture. Additionally, Open Cable Application Platform (OCAP) TV sets with native multi-stream CableCards will soon be available on the market. An OCAP TV set with CableCard obviates the need even to have a set-top. OCAP is deployed or will soon be deployed in almost every major cable operator’s footprint, and within it, a VOD client that is suited for the hotel market.
Furthermore, HD and SD digital video recorders (DVRs) can also be deployed. This technology is readily available and easily provided by the cable industry, but to the incumbent hotel VOD solution provider, it represents a significant technology gap. All that is required to productize DVRs for the hotel market is to clear the recorded list on checkout, a capability that is already supported through existing application programming interfaces (APIs). Conclusion The bottom line is that cable can compete in this market.
Traditional hotel technology providers cannot match the efficiency of cable networks, nor can they match the mix of services that cable can offer to this market, such as StartOver services and HD-DVRs.
The message is not only that cable has a solution, but also that hoteliers should be wary of the long-term risks of investing in proprietary HDTV technology.
The hotel room was once more technically advanced than the home, but that is no longer the case. Cable’s technology has well surpassed the hotel technology. The hotelier is at technology deficit, and cable can either help bridge that gap or miss out on a significant opportunity.
Glen Hardin is senior director, Video Systems, Advanced Technology Group for Time Warner Cable. Reach him at firstname.lastname@example.org.