The Perfect Storm

You have to wonder whether two recent digital developments in the cable industry are somehow… connected. Or perhaps they want to be connected. Either way, something’s happening here—although what it is ain’t exactly… well, you know the rest.

 

Consider these two seemingly unrelated happenings:

 

The Remote DVR Decision – Cablevision’s recent legal victory in the landmark remote DVR case was a gift to operators. It allows them to let subscribers time-shift content from a central server with or without programmers’ consent, many of which (at least on the broadcast net side) sued Cablevision over the concept in the first place.

 

The Authentication Trials – Time Warner Cable and Comcast are now just starting to trial authentication systems. Comcast has struck deals with several big players, including premium nets and just today even a broadcaster (CBS) and 17 cable networks. Prediction: Cable is going to figure this out. And deployment could begin in some markets as early as next year, assuming they can convince more networks to participate (many are already owned by Turner and obviously playing ball).

 

So how are these connected? Let’s think about this. The Supreme Court has cleared the way for Cablevision and others to offer remote DVR service to subscribers, essentially caching live TV at central servers (using a brief storage buffer) and letting people stream them at will, start a program over, pause, rewind, etc. But here’s an idea. Why not make this functionality simply a feature related to overall authentication—using the same servers? An authenticated subscriber could access the latest episode of “The Closer” from the PC or over a remote DVR on-demand system—but the content would come from the same place. Everything could funnel through the cable headend, which would send it either to the TV (remote DVR) or the PC (authentication system). Newer set tops that are Ethernet- or WiFi-enabled could get it directly over broadband through an authenticated connection. The consumer wouldn’t really know the difference. And if everything was truly authenticated, would it really matter how those bits streamed into the household?

 

This offers a way for both operators and content owners to work together from mutual positions of strength. Operators want cooperation on authentication, and they can now (politely) use the remote DVR legal outcome as a stick (or carrot, depending on how you look at it). The pitch: “Work with us on authentication, or gee… we might go forward with a remote DVR solution on our own.” This could be an especially potent argument vs the broadcast nets. They are, after all, the ones putting most of that episodic content online for free. A broadcaster could say: “Fine. But if we work with you on authentication, we want you to disable fast forwarding on the remote DVR and give in on a few other things.” Cable could come back with, "Let’s take a look at those retrans fees." Aren’t negotiations wonderful? Once there’s agreement on the terms for authentication, cable operators and programmers can jointly roll out a so-called “remote DVR” feature that extends authentication to the TV screen. Overall, this seems a much more holistic way to approach things and could usher in cooperation between these camps on a host of linear and digital initiatives—including at some point mobile strategies. Are there technical and business hurdles? Yes. Can cable figure them out? Yes.

 

Perhaps these discussions are already taking place. If so, great. Because at the end of the day, distributors and programmers need each other. Features like remote DVR and TV Everywhere are small parts of a larger and more important effort to preserve the business model that has funded all these great shows for years… while satisfying millions of viewers who just want to watch their favorite shows on any platform. This is a perfect storm. And cable can ride it out to a sunnier, more profitable future—if all sides of the business work together.

(Michael Grebb is executive editor of CableFAX Daily).