"Over time, this may lead to a world without set-tops, which we think could enable a much better customer experience," Britt said on Thursday morning's earnings call. (Cisco Systems Inc. (Nasdaq: CSCO), one of TWC's key suppliers, is now in agreement with that notion -- see The Disappearing Set-Top .)
TW Cable's iPad app delivers 73 live TV channels to the tablet, and it's believed that the company is simulcasting them from a facility in Denver. More than 360,000 iPad users downloaded the app in the first month it was out. TWC also has agreements to deliver subscription TV services to connected TVs from Samsung Corp. and Sony Corp. (NYSE: SNE), as well as Samsung's Galaxy Tab. (See CES 2011: Samsung Puts MSOs in the Picture.)
Britt said the MSO plans to launch a "graphically rich" navigation and search set-top platform that lives in the cloud. Other MSOs, including Comcast Corp. (Nasdaq: CMCSA, CMCSK), are also starting to gravitate toward the so-called remote user interface (RUI). Industry sources say CableLabs has an RUI project already underway.
Fewer set-tops would reduce MSO revenues but would also reduce costs. Britt likes the tradeoff. "We would have a somewhat smaller balance sheet, somewhat smaller revenue, [and] probably a more profitable company and much happier customers," he said.
But the MSO has other problems to deal with first. TW Cable has already faced some cease-and-desist orders from some major programmers, and a lawsuit from Viacom Inc. (NYSE: VIA), over its iPad app. Britt insists that the MSO is well within its rights to distribute programming to iPads, so long as access is limited to the customer's home. (See TW Cable, Viacom Take iPad Fight to Court .)
"It is yet another simulcast," Britt said of the IP video project, noting that the company is already delivering simulcasts of channels in standard-def and high-def using MPEG transport. "Those are just different versions of the same offering that you buy from us in a subscription."
There were no surprises in TWC's first-quarter earnings: revenues of $4.8 billion, up 5 percent, and a loss of 65,000 basic video subs, about what Wall Street was expecting. (See TW Cable Posts Q1.)
High-speed Internet was strong, as the operator signed up 189,000 new customers, allowing it to breach the 10 million sub mark. The MSO added about 9,000 Docsis 3.0 customers in the quarter.
Another bright spot was commercial services, which brought in $313 million, up 23 percent from the first quarter a year ago.
Cable's migration to IP video was a hot topic at Light Reading's Cable Next-Gen Video Strategies event in New York City. For much more, please check out:
- Nielsen to Fix iPad Blind Spot
- Boxee, Roku Predict Pay TV's Transformation
- The Disappearing Set-Top
- Cable Gets Serious About IP Video
- The End of Docsis
- Starz Follows TV Everywhere
- Arris Touts Whole Home Solution
- Verivue: Cable's Content Delivery Demands
- TiVo's Blended Experience
- Roku: Why Cable Should Go Over the Top