Are Cable's Smart Homes a Smart Move?

Cable operators are ready to take another run at offering a full suite of smart-home services to increase customer spending

By Craig Leddy- Contributing Analyst, Light Reading
July 11, 2012
URL: http://www.lightreading.com/are-cables-smart-homes-a-smart-move/240138646

The Digital Home is an age-old industry concept. Since the earliest days of digital technology in the 1990s, tradeshows for cable, consumer electronics, and other communications and entertainment industries presented mock homes that showed off the wonders of the Digital Age. As the Web, broadband and wireless technology flourished, the Digital Home evolved into the Connected Home and the Connected Consumer.

Now the concepts surrounding the Connected Home are being renewed and refined. The cable industry, as well as its service provider competitors, are brushing up the home network concepts and making them new again, with the help of recent technology innovations and fresh strategies, according to the latest Heavy Reading Cable Industry Insider, Cable Gears Up for Another Smart-Home Run.

Cable's Connected Home is becoming the Smart Home, one that provides extensive entertainment and communications that move around the home or even beyond the home, as well as security, energy management and other home automation services.

"We really have no interest in being just a security provider. It's really all about broadband and the connected home," said Mitch Bowling, SVP and GM, new businesses for Comcast Corp., during a 2012 Cable Show panel on home automation.

The Heavy Reading report reviews many of the technologies that make the Smart Home possible:

A high-capacity broadband pipe into the home, fueled by Docsis 3.0 (D3) wideband Internet capability for download speeds of up to about 150 Mbit/s, or even faster as cable embraces emerging fiber optic technologies.
A multimedia gateway, initially in the form of a Docsis-fueled set-top box (STB) and eventually a whole-home hybrid gateway that includes a D3 modem and STB functionality in a single device.
MoCA and DNLA support to route media around the home and serve various consumer electronics. Smart TVs, tablets, smartphones, videogame consoles and other broadband-connected devices provide platforms for cable's TV Everywhere services, live streams and on-demand apps.
A cloud-based interactive program guide (IPG) that improves TV navigation and offers a platform for over-the-top (OTT) Web services, interactive apps and service management.
Smart-home automation with touchpads to control security monitoring, digital thermostats and lighting and eventually provide services such as remote healthcare.

The report assesses cable's prospects for smart-home services and the technologies that support whole-home experiences and automation. It includes profiles of nine suppliers, including those that support whole-home networking through hybrid gateways and related products, as well as cable's go-to provider of home automation services, iControl.

The enhanced service capabilities increase cable providers' prospects to retain customers and build high-profit-margin broadband businesses, the report says. The more that cable providers can integrate the new broadband applications into a cohesive experience for customers, the greater chance they have that customers will stick with cable as their provider of choice.

Yet cable faces stiff competition for smart-home automation from existing security companies, telcos and other service providers, as well as retail products, the report says. MSOs are asking customers to pay about $30 to $50 per month plus an installation fee amid a down economy and uncertain consumer demand for home automation.

MSOs must educate consumers about the benefits of smart home services and market them successfully in order to achieve meaningful penetration, the report concludes. When it comes to home security, cable must prove that it is highly reliable and trustworthy.

Cable providers want to be the "the trusted provider" for all consumer services, said Asheesh Saksena, EVP and chief strategy officer, Cox Communications Inc.. "This is one of those instances where trust matters."

— Craig Leddy, Contributing Analyst, Heavy Reading Cable Industry Insider

This report, "Cable Gears Up for Another Smart-Home Run," is available as part of an annual single-user subscription (six issues) to Heavy Reading Cable Industry Insider, priced at $1,595. Individual reports are available for $900. To subscribe, please visit: www.heavyreading.com/cable.