TV Everywhere has moved from the confines of back-office discussions to become the hottest issue in cable. The industry's solution to Internet video challenges, unveiled in June 2009 by Time Warner Inc. (NYSE: TWX) and Comcast Corp. (Nasdaq: CMCSA, CMCSK), is to authorize or entitle their customers to watch cable programming online and on any cable-fed device – "TV Everywhere." This solution faces many challenges and elicits very strong opinions, ranging from praise from those that see it as a way for cable to embrace online video distribution, to criticism from those that consider MSOs as gatekeepers seeking to control the flow of video on the Web.
The initiative is gaining speed. Comcast foresees the launch of its On Demand Online service this year, Time Warner Cable Inc. (NYSE: TWC) is engaged in a trial, and virtually every major MSO and programming company is preparing TV Everywhere plans.
According to the new Light Reading's Cable Industry Insider, "TV Everywhere: Can Cable Solve Its Hulu Problem?," the initiative could serve as a catalyst for something bigger, a sea change in the way that cable delivers its services. With the industry already transitioning to "all digital," it is poised to embark on the next major phase: going all-IP. The top MSOs are known to be exploring the prospective advantages and feasibility of IP delivery for all services, potentially setting the stage for a migratory path away from traditional radio frequency (RF), MPEG2 platforms to all-IP.
Such a shift would mark a dramatic, even revolutionary, change in the cable industry, but one that is gaining appeal. Going all-IP could enable cable operators to erase the barriers between its TV and broadband platforms, and perhaps more easily feed multiple screens and devices.
All-IP could leave cable's satellite competitors in the dust and keep pace with fiber-rich FiOS from Verizon Communications Inc. (NYSE: VZ) and IPTV-based U-verse from AT&T Inc. (NYSE: T). In addition to supporting more cable programming online, cable operators and programmers could capitalize on new advanced advertising, on-demand, interactive, and cross-platform capabilities.
Already, MSOs are seeking to infuse their delivery infrastructures with IP technologies, embrace MPEG4 digital, and boost broadband speeds through wideband (Docsis 3.0). While a transition to an all-IP environment would require significant capital expenditure if done in the near term, operators can take advantage of IP delivery costs as they continue to decline over time. For some leading technologists, the endgame is a world of unicast delivery of personalized media and services to any device.
Cable is a long way off from full IPTV delivery of its video channels, and current IPTV technologies still face some challenges. (It is more correct to label cable's transition as "all-IP" rather than "IPTV," since it is more comprehensive than implementing one of the currently available IPTV platforms.) But operators can take advantage of many emerging hybrid solutions that integrate IP with traditional delivery technologies. By the time many operators are in a position to consider full IP channel delivery, cable will have created its own definition of IPTV.
To move toward this grand IP vision, cable must overcome challenges that are inherent in TV Everywhere. Cable operators and programmers must remain committed to tackling complex issues, including content rights, evolving business models, ensuring user experience, and their own historical record of contentious licensing negotiations. The Federal Communications Commission (FCC) 's proposed net neutrality rules could affect how operators deal with content providers.
MSOs must implement consumer-friendly, federated sign-in processes and provide a quality IP video experience that is more than just a substitute for watching TV. Cable marketers need to promote TV Everywhere as a free, value-added service so that it does not fall flat or, worse, create a consumer backlash.
Although TV Everywhere is likely to take many twists and turns before cable IP video becomes a regular part of consumers' media habits, it may well be the tipping point for a transition to cable going all-IP. The all-IP transition will dominate cable technology activity throughout the next decade and beyond, much as digital has dominated activity over the past 15 years.
— Craig Leddy, Contributing Analyst, Light Reading's Cable Industry Insider
The report, TV Everywhere: Can Cable Solve Its Hulu Problem?, is available as part of an annual subscription (6 bimonthly issues) to Light Reading's Cable Industry Insider, priced at $1,295. Individual reports are available for $900. For more information, or to subscribe, please visit: www.lightreading.com/cable.
