& cplSiteName &

Pondering Pre-Paid Cable TV

Jeff Baumgartner
The Bauminator
Jeff Baumgartner
7/9/2012
50%
50%

8:00 AM -- There's an interesting idea floating about that would give cable an opportunity to offer video services under a pre-paid model that's proved popular in the cellular phone world.

The notion is to sell a simple and inexpensive set-top box at outlets like Walmart, Target and Walgreens and pair them with pre-paid cards (or maybe codes of some sort) that would load services by the hour, week or month. Or maybe it could be taken a step further and let consumers also buy some services individually – for example, an HBO card that's good for a month.

The rumor is that at least one major U.S. MSO is currently exploring a pre-paid model, and, according to a source, would involve a low-cost, two-way box that has yet to be developed. Another source said Comcast Corp. (Nasdaq: CMCSA, CMCSK) looked into this idea years ago, but didn't follow through with it. It's not known which major operator is the one that's looking at it in this go-round.

My first reaction to the idea is that it could let an operator market video services to lower-income households and remove the non-payment risk factor from the equation -- something that Dish Network LLC (Nasdaq: DISH) has had to contend with over the years by tailoring some of its packages for the lower end of the market.

But some other potential usage scenarios were brought to my attention. It could give cable a form of a la carte or a more metered option in which the customer would only buy services during a particular season (i.e., for students and snowbirds that churn out in droves in the second quarter of every year), or long enough to catch a TV series or the NFL football season. Or perhaps it could be made into something that would be attractive to consumers who have never subscribed to cable. Maybe it would make a good Christmas gift for grandma or weird Uncle Charlie. Who knows? There are lots of directions a pre-paid cable TV service could go.

But it's not without risk. Regular, recurring customers that take a cable's full subscription TV packages might be encouraged to drop them in favor of a pre-paid model.

And a lot would need to happen to make this idea go. As I understand it, the discussion also involves a two-way set-top box (so it could support video-on-demand and an interactive guide, perhaps?) that's yet to be developed. And it's not known if just any manufacturer would be allowed to make these boxes, because it's apparent that the cable operator would still be the one pulling the strings. But if the box is to be low-cost, I don't see how that happens using a CableCARD slot and module, which would keep such a device prohibitively expensive.

Digital Transport Adapter (DTA) boxes are dirt cheap (less than $50 per unit for hi-def versions) and use integrated security (thanks to an Federal Communications Commission (FCC) waiver) but are inherently one-way and can't be sold at retail under the current rules. Perhaps a two-way cable device with "removable" downloadable security could be developed that also sidesteps the FCC's current ban on boxes with integrated security. Just a thought.

And cable's billing, provisioning and backoffice systems aren't really setup for this sort of thing yet. So there are still lots of questions about how this would be put together and what a pre-paid cable service might even look like.

But if this exploration turns into something real, it could give cable a new way to establish a retail model for video services and succeed in an area that tru2way did not, and give the industry a new way to target consumers with video services. (See Tru2way: Epic Fail at Retail.)

— Jeff Baumgartner, Site Editor, Light Reading Cable



(7)  | 
Comment  | 
Print  | 
Newest First  |  Oldest First  |  Threaded View        ADD A COMMENT
shygye75
50%
50%
shygye75,
User Rank: Light Sabre
12/5/2012 | 5:28:20 PM
re: Pondering Pre-Paid Cable TV


Jeff -- Isn't this a bit of a stretch? The user premises still has to be connected to the cable network for this to work, right?

craigleddy
50%
50%
craigleddy,
User Rank: Blogger
12/5/2012 | 5:28:19 PM
re: Pondering Pre-Paid Cable TV


The pre-paid concept has been kicking around in cable marketing circles for awhile and I recall that some local systems use pre-paid cards for certain services (multicultural tiers, premium services, etc).


There is a sizeable population that purchases mobile and other services in this manner. As Jeff notes, it can be used for seasonal cable subs (college kids, vacation homes) and the large number of people who re-locate each year. The trick is using a cheap box -- and either selling it or making sure you can get it back at the end of the pre-paid period.


Yes, the connection already needs to be in place, but that's not a tall order since most homes and MDUs already are wired. Cable Internet and phone might come into play but at this point I think this is intended for traditional cable TV.          


 

shygye75
50%
50%
shygye75,
User Rank: Light Sabre
12/5/2012 | 5:28:19 PM
re: Pondering Pre-Paid Cable TV


There's definitely OTT potential, but the business case for this seems more suited to a company like Netflix.

paolo.franzoi
50%
50%
paolo.franzoi,
User Rank: Light Beer
12/5/2012 | 5:28:19 PM
re: Pondering Pre-Paid Cable TV


Mendyk,


 


This seems like a perfect OTT addon for a cable guy.


 


seven


 

spiral
50%
50%
spiral,
User Rank: Light Beer
12/5/2012 | 5:28:18 PM
re: Pondering Pre-Paid Cable TV


This sounds like a job for ActiveVideo. They could run the whole thing from the cloud to a bare-bones device, and use smartphones and tablets to control the experience.

AESerm
50%
50%
AESerm,
User Rank: Light Beer
12/5/2012 | 5:28:18 PM
re: Pondering Pre-Paid Cable TV


Can you get around the two-way hurdle by pairing the DTA and subscriber with an Android or iOS app? Granted, that narrows the lower income target market somewhat. 

msilbey
50%
50%
msilbey,
User Rank: Blogger
12/5/2012 | 5:28:13 PM
re: Pondering Pre-Paid Cable TV


jtombes- I agree. Why deal with two-way tech and a cablecard when everything's moving in the direction of IP anyway? Especially for on-demand content. A DTA already provides the linear content. How expensive can it be to add IP connectivity to the box to provide access to an interactive guide and VOD? It would be different if the MSOs didn't have another use for those IP assets, but they do. That's not something they'd be building for this service. It already exists, or is in progress. 

More Blogs from The Bauminator
Don't expect anything more to pop for a while, but one analyst sees John Malone & Co. as the 'logical, ultimate acquirer of Ziggo' if the price is right
Cable operators will need to free up at least 24MHz of spectrum for Docsis 3.1. But why is that the magic number?
Liberty Media's rumored plan to snag a 25% stake in Charter for $2.5B could aid the MSO's M&A strategy
Top US cable operators lost 1.41 million video subs in 2012, but the bleeding continues to show signs of slowing in a saturated pay-TV market
Aereo streams its 'no cable required' tagline into the video world. Will consumers tune in to the message?
From The Founder
Either we perform a complete 'factory reset' on the way the telecom industry creates and deploys virtualization, or we face the consequences.
Flash Poll
Live Streaming Video
Charting the CSP's Future
Six different communications service providers join to debate their visions of the future CSP, following a landmark presentation from AT&T on its massive virtualization efforts and a look back on where the telecom industry has been and where it's going from two industry veterans.
LRTV Custom TV
The Urgency of Commercial 5G Services

4|26|17   |     |   (0) comments


The progress of 5G has been closely monitored in the industry. At the 2017 Brooklyn 5G Summit, the sense of urgency for a commercial 5G launch had started to surface among operators.
Women in Comms Introduction Videos
How Diversity Helps Comcast Mirror Its Customer Base

4|26|17   |   2:55   |   (0) comments


Diversity brings innovation, creative ideas and a way to reflect the broad spectrum of your customer base, Comcast Director of Customer Experience Jenelle Champlin says.
LRTV Huawei Video Resource Center
Mobile Operators & Video

4|25|17   |     |   (0) comments


Ovum's Ed Barton discusses the latest mobile operator strategies for mobile video.
LRTV Custom TV
Infinera Introduces Instant Network

4|20|17   |     |   (1) comment


Mike Capuano, vice president of marketing at Infinera, discusses the advancement from Instant Bandwidth to new Instant Network capabilities, which include Bandwidth License Pools, Moveable Licenses and Automated Capacity Engineering (ACE).
Women in Comms Introduction Videos
Vodafone's Eubank on Sponsors, Mentors & Moving On Up

4|19|17   |   4:25   |   (0) comments


Vodafone America's Head of Operations Kimberly Eubank breaks down the difference between a sponsor and a mentor and shares why both made a big difference in her career.
LRTV Custom TV
NYC Auto Show: Are We Smart Yet?

4|18|17   |     |   (0) comments


The auto industry is facing some big transformations as electric vehicles, autonomous technology and connected cars are seen as the future of the industry. During the much-anticipated NY international auto show, there was an emergence of new technology and mobility service on the show floor. Aside from performance, brands like Lincoln, Hyundai, Honda, Mercedes and ...
LRTV Huawei Video Resource Center
The Impact of Video

4|18|17   |     |   (0) comments


David Mercer from Strategy Analytics discusses the impact of video on current strategies.
LRTV Custom TV
Pardeep Kohli Discusses Network Transformation & the Market Opportunity for the 'New' Mavenir Systems

4|13|17   |     |   (0) comments


In a brief discussion at MWC 2017, Heavy Reading analyst Adi Kishore talks to Pardeep Kohli, CEO, Mavenir Systems about the creation of the 'new Mavenir' and some of the key challenges facing operators in today's market. A key theme of the discussion centers around operator need for software-only, virtualized solutions and how they will need to adapt to ...
Women in Comms Introduction Videos
Tech Maverick Shares Her Tips for Gender Inclusivity

4|12|17   |   7:28   |   (0) comments


Wendy Hall Bohling, a corporate escapee, author and gender exclusivity consultant, tells her story of sexism, bias and progress along the road to gender equality in the workforce.
LRTV Huawei Video Resource Center
Huawei at MWC 2017

4|11|17   |     |   (0) comments


At Mobile World Congress 2017, the biggest mobile industry gathering of the year, Huawei showcased its new innovations and solutions with the theme "Open Road," which focuses on cloud, 5G, operation transformation, videos and consumer-oriented products. Its campaign has been recognized by three awards given by GSMA.
LRTV Custom TV
China Telecom NFV Infrastructure on RSD

4|6|17   |     |   (0) comments


Lynn Comp, senior director of market development of Intel, is joined by Chong Zhang, storage engineer at Inspur and Ou Li Yan, architect for technology strategies of China Telecom, for a discussion of what NFV brings.
LRTV Custom TV
Nokia's IMPACT Software Demo

4|6|17   |     |   (0) comments


Khamis Abulgubein of IoT market development at Nokia demonstrates IMPACT (intelligent management platform for all connected things), a software solution with a horizontal approach to managing any device on any application.
Upcoming Live Events
May 15-17, 2017, Austin Convention Center, Austin, TX
May 15, 2017, Brazos Hall - Austin, TX
May 15, 2017, Austin Convention Center - Austin, TX
June 6, 2017, The Joule Hotel, Dallas, TX
All Upcoming Live Events
Infographics
With the mobile ecosystem becoming increasingly vulnerable to security threats, AdaptiveMobile has laid out some of the key considerations for the wireless community.
Hot Topics
Surprise! AT&T Markets 4G Advances as '5G Evolution'
Dan Jones, Mobile Editor, 4/25/2017
Did Verizon Outbid AT&T for Straight Path?
Dan Jones, Mobile Editor, 4/25/2017
First Year TIPs the Scale Toward Success
Denise Culver, 4/24/2017
Verizon: Small Biz in Cybercrooks' Crosshairs
Carol Wilson, Editor-at-large, 4/27/2017
Like Us on Facebook
Twitter Feed
BETWEEN THE CEOs - Executive Interviews
One of the nice bits of my job (other than the teeny tiny salary, obviously) is that I get to pick and choose who I interview for this slot on the Light Reading home ...
TEOCO Founder and CEO Atul Jain talks to Light Reading Founder and CEO Steve Saunders about the challenges around cost control and service monetization in the mobile and IoT sectors.
Live Digital Audio

Playing it safe can only get you so far. Sometimes the biggest bets have the biggest payouts, and that is true in your career as well. For this radio show, Caroline Chan, general manager of the 5G Infrastructure Division of the Network Platform Group at Intel, will share her own personal story of how she successfully took big bets to build a successful career, as well as offer advice on how you can do the same. We’ll cover everything from how to overcome fear and manage risk, how to be prepared for where technology is going in the future and how to structure your career in a way to ensure you keep progressing. Chan, a seasoned telecom veteran and effective risk taker herself, will also leave plenty of time to answer all your questions live on the air.