Video services

CableCARD Update II

The CableCARD train for one-way digital TVs continues to move forward… but at pace best described as a crawl.

In a recent Federal Communications Commission (FCC) filing, the National Cable & Telecommunications Association (NCTA) reported that that the five largest U.S. cable MSOs -- Comcast Corp. (Nasdaq: CMCSA, CMCSK), Time Warner Cable Inc. (NYSE: TWC), Cox Communications Inc. , Charter Communications Inc. , and Cablevision Systems Corp. (NYSE: CVC) -- had deployed more than 271,000 CableCARDs for use in so-called Unidirectional Digital Cable Ready Products (UDCPs -- i.e., one-way "digital cable ready" TVs) as of Dec. 6, 2007. When the next five largest operators are included, the number rises to more than 300,000.

While that may seem impressive, it's abundantly clear that deployments are decelerating and general consumer interest in one-way digital TVs (with CableCARDs authorizing the cable service) is fleeting.

As of Sept. 12, 2007, the same five MSOs, representing nearly 80 percent of all U.S. cable subs, reported the deployment of about 246,000 CableCARDs for UDCP models -- 25,000 (or about 10 percent) fewer than the number shared in the more recent December report. (See CableCARD Update.)

Those results add further proof that there's not much of a consumer market for "set-top-free" digital TVs capable of supplying only one-way digital cable services, and a key reason why these limited and fairly obsolete devices made Light Reading's top tech flops for 2007. (See 2007 Top Ten: Techs That Flopped.)

Of course, that picture could change once two-way digital TVs capable of handling cable-fed video-on-demand (VOD) and other interactive apps enter the market. But, of course, those developments are mired by a standards battle between the cable industry and the Consumer Electronics Association (CEA) . (See Brenner Defends OpenCable and Two-Way Battle Reaches FCC.)

However, another figure supplied by the NCTA report gives us a better sense of the potential size of the market for interactive cable services over a given period. Since the integration ban went into effect on July 1, 2007, the top 10 U.S. MSOs, which combined serve about 90 percent of U.S. cable subs, have already deployed more than 2.25 million "operator-supplied" set-tops with CableCARDs. (See Countdown to 'Seven-Oh-Seven'.)

"Therefore, in less than six months, cable operators have deployed more than seven times as many CableCARD-enabled devices than the total number of CableCARDs requested by customers in the last four years," the NCTA said.

So perhaps the message is not that consumers are shying away from set-top-free TVs with CableCARD slots, but that they aren't at all interested in obtaining CableCARDs for a TV set that offers little to no added value… unless they are connected to a digital set-top that can pipe in VOD, an electronic program guide, and other interactive cable services.

And there doesn't appear to be a shortage of interest in digital TVs themselves. According to new data from the Consumer Electronics Association (CEA) , more than 50 percent of U.S. homes now own a digital TV. As the February 2009 DTV transition approaches, the CEA predicts that nearly 32 million digital TVs will ship in 2008, with 79 percent of those units capable of outputting a hi-def signal.

But having to add a set-top just to obtain desired cable services pretty much defeats the purpose of the set-top-free TV, doesn't it?

The Consumer Electronic Show is set to descend on Las Vegas in less than two weeks. With Comcast boss Brian Roberts on tap to serve as one of the show keynoters, expect cable-related announcements at this super-confab to center on the two-way theme, in terms of new products from vendors (set-tops/DVRs and TVs outfitted with cable's specified middleware platform) and new services from the operators themselves.

— Jeff Baumgartner, Site Editor, Cable Digital News

Be the first to post a comment regarding this story.
Sign In