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Which Cable Card Will EchoStar Play Next?

11:20 AM -- EchoStar Corp. LLC (Nasdaq: SATS)'s exit from the U.S. cable set-top box market doesn't necesarilly mean its dance with domestic MSOs is over. (See EchoStar Backs Out of Cable Set-Top Biz .)

Near term, its best chance of finding cable success will involve going inside set-top boxes made by other suppliers. And that strategy hinges on the porting of EchoStar's video-placeshifting Sling technology to a new gateway chipset from Broadcom Corp. (Nasdaq: BRCM) that is due out later this year. Several major cable box makers will use that silicon in next-generation products. (See Broadcom Video Gateway SoC Gets 'SlingLoaded' .)

Becoming an embedded software component in those devices could be a game-changer for EchoStar's cable strategy. MSOs will be able to buy a license for Sling's technology and turn it on without having to go to the lengths of purchasing boxes from EchoStar or buying a full-fledged video ecosystem like Aria.

"It's been the Holy Grail for us to move in this direction," says Jay Tannenbaum, VP of Sling Media Inc. , a unit of EchoStar, regarding the on-chip licensing strategy. "We're working with Tier 1 operators in the U.S. and internationally."

EchoStar's deal with Broadcom isn't exclusive, so nothing prevents Echostar from porting Sling to set-top chips made by suppliers such as Entropic Communications Inc. (Nasdaq: ENTR) and Sigma Designs Inc. (Nasdaq: SIGM). EchoStar's USB-connected Sling Adapter might also draw interest from cable operators, but, for now, Dish Network LLC (Nasdaq: DISH) is the only service provider offering it. (See TelcoTV 2010: Dish Ready to Serve 'Sling Adapter' .)

But the big question is whether operators will flip the Sling's switch once the technology is available.

It's clear that MSOs are interested in TV Everywhere, and industry sources said the prospect of offering "Sling-loaded" boxes was a key reason why Cable One Inc. considered working with EchoStar in the first place. Time Warner Cable Inc. (NYSE: TWC), meanwhile, has offered free Slingboxes to lure customers to its Docsis 3.0 tiers. (See TW Cable Slings for Wideband and TW Cable Sets Docsis 3.0 Subscriber Record.)

And it's probable that MSOs will like having access to Sling's technology, if only to use as leverage with programmers as cable operators negotiate new carriage deals that include out-of-home access rights.

Another cable card EchoStar could play is a managed, over-the-top video service/network DVR combo it has developed using the adaptive bit rate streaming technology it acquired from Move Networks in 2011. EchoStar hasn't announced any customers for it, but likely targets will include MSOs that have deployed Docsis 3.0 and are looking to wean themselves off of older MPEG-2 digital platforms or are still offering analog-only video services. (See EchoStar Readies Over-the-Top Video Play.)

But that will require a greater amount of trust from the U.S. MSOs, which appears to be in short supply these days.

— Jeff Baumgartner, Site Editor, Light Reading Cable



Jeff Baumgartner 12/5/2012 | 5:34:52 PM
re: Which Cable Card Will EchoStar Play Next?

I also asked Tannenbaum for his reaction to NimbleTV, the startup that's pitching pay-TV operators on what amounts to a  Slingbox-in-the-cloud coupled with a network DVR. It's on the radar, though EchoStar's trying to figure what to make of it.  "We're trying to puzzle how Nimble can do this and negotiate with programmers and be able to do it cheaper than the MSOs," he said. "I don't know how they're going to do that for $20 a month." 

Me neither. JB


 

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