Cable Tech

CableCARDs Remain a Retail Dud

Today's cable news roundup kicks off with the latest numbers on the few, the proud, the consumers who use CableCARD modules in retail video devices.

  • The Federal Communications Commission (FCC) 's ban on cable boxes with integrated security in July 2007 still hasn't spawned much of a retail market for the devices. In fact, it appears to be shrinking. The top ten incumbent U.S. MSOs have deployed just north of 554,000 CableCARDs for use in retail devices such as TiVo Inc. (Nasdaq: TIVO) DVRs, versus a whopping 32 million of the removable security modules in MSO-supplied set-top boxes, the National Cable & Telecommunications Association (NCTA) said in its latest report to the FCC. Interestingly, the number of deployed CableCARDs for retail devices among top MSOs is 28,000 fewer than the figure the NCTA reported in June 2011. The NCTA is urging the Commission to scuttle the security ban as the FCC chews on AllVid, a potential successor to the current CableCARD rules.

  • Sky will launch a broadband-fed, over-the-top video service in the second half of 2012 that looks poised to take on LOVEFiLM International Ltd. and Netflix Inc. (Nasdaq: NFLX), which launched its offering for the U.K. earlier this month. The service will offer a range of Sky content, including "hundreds" of films from Sky Movies, with some sports fare on tap. Sky isn't revealing specific pricing yet, but it will allow for monthly unlimited access and let consumers pay-as-they-go. Sky, which serves about 10.4 million homes in the U.K. and Ireland, expects to offer the OTT service on a range of PCs, tablets, smartphones, game consoles and connected TVs. (See Netflix Launches in UK & Ireland.)

  • Most of Comcast Corp. (Nasdaq: CMCSA, CMCSK)'s business services revenues are still coming from small businesses, but its move up market with Metro Ethernet technology is starting to make some hay. Comcast Business Services said Widener University of Chester, Pa., has tapped the MSO's MetroE platform to enhance its disaster preparedness initiatives. The school has four campuses across Pennsylvania and Delaware and also serves as a central technology hub for several local K-12 school districts. (See Comcast Hones 2-Pronged Business Attack.)

  • Comcast Interactive Capital joined a $7 million round in SnagFilms Inc., a startup that distributes more than 3,000 independent flicks to OTT video outlets.

  • Docsis CPE specialist SMC Networks Inc. has appointed Joseph Wytanis to EVP and COO. Wytanis is late of Cisco Systems Inc. (Nasdaq: CSCO)/Scientific-Atlanta, where he was VP and GM of the company's Cable Home Networking business unit.

    — Jeff Baumgartner, Site Editor, Light Reading Cable

  • Jeff Baumgartner 12/5/2012 | 5:43:59 PM
    re: CableCARDs Remain a Retail Dud

    The NCTA doesn't point to one specific cause for the decline in CableCARDs being used in retail devices, but a spokesman did pass along some factors that could be contributing to that trend:

    - CableCARDs are no longer a supported feature by TV manufacturers, so an existing CableCARD customer who is buying a replacement TV will no longer make use of a CableCARD

    - Customers may be upgrading to a set-top box from using a CableCard;

    - Customers may have dropped their cable subscriptions or have moved to another service provider; or,

    - There may have been a change in the CableCARD reporting methodology by an operator or there may have been errors in past reports.



    Jeff Baumgartner 12/5/2012 | 5:43:56 PM
    re: CableCARDs Remain a Retail Dud

    Interesting that one MSO (Comcast) appears to be  contributing to the shrinking number-- thanks for comparing those figures on an MSO by MSO level; will have to see if there's a particular policy or program undreway there to cause that, or if  it's just a coincidence. But agree that  a 7K increase among the other operators tallied doesn't move the needle much either. JB



    cmmurrey 12/5/2012 | 5:43:56 PM
    re: CableCARDs Remain a Retail Dud

    If you look closely you'll notice that the entire decline is due to Comcast. If you exclude the Comcast numbers there was a slight increase from the other 9 MSOs.

    Comcast reported 329,111 retail CableCARD customers as of 12/31/2011 including 26,262 new installs while in the previous reporting period ending 8/21/2011 they reported 367,064 CableCARD customers with 38,403 new installs.

    This reduction is a loss of 37,953 Comcast CableCARD customers while the top 10 MSOs experienced a loss of 31,000. Therefore, excluding Comcast we would have seen a gain of 7,000 CableCARD customers which certainly wouldn't change the fact that retail CableCARDs are not catching on at this point.

    I expect that we may see a slight bump up in CableCARD deployments later this year after Comcast begins offering their Xfinity On Demand service on retail TiVo boxes in their major markets.

    The bottom-line is it appears there was some sort of reporting methodology change at Comcast that accounts for the reduction.



    shygye75 12/5/2012 | 5:43:56 PM
    re: CableCARDs Remain a Retail Dud

    Hi, Jeff -- do you think the duddiness of CableCARDs has anything to do with the possibility that your average consumer just wants to plug the box in and watch TV?

    Jeff Baumgartner 12/5/2012 | 5:43:55 PM
    re: CableCARDs Remain a Retail Dud

    That's definitely a contributor, but the initial slate of CableCARD-ready retail TVs and Tivos didn't support cable VoD, so there wasn't much reason for consumers to go in that direction and buy a hamstrung product unless they just absolutely hated having a cable-supplied set-top box in the house.  Panasonic's Tru2way TVs, which did support cable VoD in some Comcast markets, didn't sell well, either, and they cost a bit more for that feature.  I'm not sure if an AllVid regime is the remedy to all of this (the cable industry certainly doesn't think so), but the execution of the CableCARD and tru2way at retail didn't tell the story of how much how much true demand there is for devices at retail, but it will be interesting to see if additions like TV Everywhere content and even some live TV services running on Roku boxes and Xbox 360s factor into sales. I think we'll get a much better sense of that as more pay-TV operators migrate to IP, which will make it easier for a retail market to develop than it did with the cablecard and tru2way. JB


    shygye75 12/5/2012 | 5:43:53 PM
    re: CableCARDs Remain a Retail Dud

    At the risk of inviting fatwa, the mountain has to come to Muhammad (the consumer) in mass-market technology retail. People who spend endless hours watching the exploits of the Kardashians et al. aren't likely to venture into the weeds of set-top options and the like.

    EdG0000 12/5/2012 | 5:43:52 PM
    re: CableCARDs Remain a Retail Dud

    Keep in mind that a meaningful value prop for CableCARDs has only recently become viable.  First gen CableCARDs were single tuner and mostly for TV sets.  They came out as the world was moving quickly to DVRs, which of course the TV sets alone didn’t offer.  In many ways, they were a step backwards from what you could get with a cable box so of course they never took off.  And those CableCARD-capable TVs at the time weren’t exactly low-end devices you’d put in a guest room or kitchen, where not having and paying for a full STB would be an attractive proposition.  Then came first gen CableCARD tuners for PCs, but those too were single tuner and cost $300+ each.  You’d have to spend $600 + the cost of a PC just to match the functionality you’d get with a dual-tuner HD STB from an MSO for $25/mo.


    It’s only been a year or so that we’ve had multi-tuner CableCARD devices available from companies like Ceton, TiVo, and SiliconDust that turn the value proposition around.  Now consumers can purchase a device that records 3, 4 or 6 or more channels at once, that offers TV Everywhere, Netfix, Hulu, YouTube and a myriad of other OTT services, that connects to their own personal media libraries, and that can support whole-home DVR and other services.  Most consumers can’t get that type of functionality on today’s cable STBs.  

    Jeff Baumgartner 12/5/2012 | 5:43:50 PM
    re: CableCARDs Remain a Retail Dud

    Hi Norman,

    Has the FCC given you an indication yet that your approach would conform with the separable security rules or are you still awaiting an answer/confirmation? Also, are there any US operators that are using Transparent Video's MicroSD-based security system? Does the system use Transparent's own security or are you using an encryption/conditional access system from another vendor?  JB

    ngillaspie 12/5/2012 | 5:43:50 PM
    re: CableCARDs Remain a Retail Dud

    I have been trying to get the FCC to use microsd cards as a security decide. It is universal as they can be pluged into a MicroSD slot, USB slot with a simple metalic adapter. They immediately could be used with virtualy ALL devixe without a hardware change.


    I have responded with comments to the FCC. The cards are available with current memory up to 64gig with a standard goin to two terabytes.



    They should switch to a diffrent format with a national authorisation system







    majortom1981 12/5/2012 | 5:43:46 PM
    re: CableCARDs Remain a Retail Dud

    Cablevision is using downloadable security. The security is downloaded to the box. Technically anybox can be used. No microsd card or cablecard needed.

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