Time Warner Starts Over on BBTV

Time Warner Cable Inc. (NYSE: TWC) has come to the realization that maybe TV content is best displayed on -- wait for it -- a TV!

The MSO has ended an 18-month trial in San Diego that enabled high-speed data subscribers to view their entire basic cable programming offerings on their home PCs. Some 9,000 of Time Warner's Road Runner customers in two adjoining neighborhoods could watch up to 75 expanded basic cable channels on their computers for no extra charge.

Fewer than 90 cable modem customers a day, less than 1 percent of the trial subscribers, opted to watch any TV shows on their computers.

"It shows that viewers don't want their whole cable lineups on their PCs," says a Time Warner Cable spokesman. Although not terribly surprising, MSO executives termed the finding "reassuring."

Even those who did watch TV shows did not exactly turn to the PC as their first choice. Instead, Time Warner officials say, viewers largely used the service for "background channels" while they were working on their computers or as "the screen of last resort" when all the TV sets in the house were already in use.

The test was also expensive. Time Warner converted conventional video signals to streams of IP packets at two hubs and then sent them out to subscribers. The MSO used a transcoder to convert each TV channel into a stream of IP packets.

Time Warner executives say the approach works just fine technically. But they say it requires 75 transcoders, one for every channel, in each advertising zone where they deliver the service, making it cost-prohibitive on a larger scale.

Time Warner executives say they will continue to explore the idea of video delivery to the PC. Its data engineers in Herndon, Va., and video engineers in their Westminster, Colo., labs will develop a better scheme, but company officials declined to discuss any details right now.

"We're looking to see what customers do want to watch on their computers," says a Time Warner spokesman. "It's obviously not full TV shows."

In the meantime, Time Warner plans to expand its short-form Internet video service, "Quick Clips," to more cable markets. The free digital cable service allows subscribers to watch news stories, weather reports, and other short Web video content from various cable networks, including CNN, CNBC, and The Weather Channel.

Launched in Columbia, S.C., six months ago, Quick Clips has gained some early usage among digital customers. Time Warner officials say it regularly ranks as one of its five most popular, free, video-on-demand (VOD) offerings.

The MSO is expanding QuickClips to at least five other markets this year, including San Antonio, Greensboro, N.C., and Rochester, N.Y. Company officials say the service will follow in the path of "Start Over," another free digital cable offering that allows subscribers to pause and rewind TV shows already in progress within the program's viewing window.

— Alan Breznick, Site Editor, Cable Digital News