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Video services

Man Bites MSO

5:45 PM -- It looks like a retail market for tru2way TVs and set-tops can't develop fast enough to keep the lawyers at bay.

In case you haven't heard, Kansas City, Mo., resident Matthew Meeds is throwing the book at Time Warner Cable Inc. (NYSE: TWC) because he feels he's forced to rent a set-top from the operator in order to obtain premium digital services.

The suit, which is seeking action-class status, according to the Kansas City Star, alleges that linking premium services to the rental of a cable box "established illegal tying arrangements."

Interesting argument, but one that probably won't stand a snowball's chance when it's fully scrutinized and viewed under a lens that shows what other options are already available today…and will be in the not-so-distant future.

Today, Meeds could go out of his way to buy one of those unidirectional "plug and play" televisions or TiVo Inc. (Nasdaq: TIVO) boxes and have them outfitted with CableCARDs…and then hope those tuning adapters make it to market posthaste. (See CableLabs Stamps SDV Tuning Adapters .) Nothing doing. He'd like to buy a set-top from a supplier of his choosing. According to the paper, he also argues that Time Warner Cable promotes its own boxes "as superior." If anything, we imagine Cisco Systems Inc. (Nasdaq: CSCO), Time Warner Cable's biggest set-top supplier, might be pleased with that description.

"I think that for most people, if they could buy the box, they would," Meeds said. Sure, if that was indeed true. But, for argument's sake, let's say it is. All of those TV and set-top makers that are already on board with tru2way should start stretching their legs right now. They'll need to be limber if they expect to execute all of those cartwheels on the way to the bank. (See EchoStar Inks Tru2way Accord , tru2Way Tallies Two More, and More Firms Go the Way of Tru2way.)

I also wonder if he's heard of two very small, under the radar satellite TV service companies that go by the names of Dish Network LLC (Nasdaq: DISH) and DirecTV Group Inc. (NYSE: DTV). Last I checked, their customers are required to use set-tops supplied by the service provider. Is he going to go after them on sheer principle? If Meeds really believes what he says, then perhaps he should. Verizon Communications Inc. (NYSE: VZ)? AT&T Inc. (NYSE: T)? Why not put them in the crosshairs, too?

Oh, right. There's been lots of talk in recent weeks about renewed interest in an "all-provider" solution that would encompass all shapes and sizes of video service providers. (See NCTA Counters Verizon's Tru2way Claims .) Just drop me a line when that puppy's ready for prime time. I'll hopefully be the one helping his oldest son pick out a college. What's that? Oh, he turned five years old last week. Thanks for asking.

In other words, Time Warner Cable, one of tru2way's champions, is much closer to achieving the ideal Meeds is seeking than the telcos and satellite TV service providers are at this point in the game.

— Jeff Baumgartner, Site Editor, Cable Digital News

msilbey 12/5/2012 | 3:34:37 PM
re: Man Bites MSO Love the snarky. It's so dead-on. :)
Jeff Baumgartner 12/5/2012 | 3:34:36 PM
re: Man Bites MSO and another thing I'd add: I was a bit blown away by this gentleman's statement that most people would like to buy a set-top if given a choice. I think that will be possible if CE companies --i event the incumbent set-top providers, if they in fact even want to give retail a shot -- are truly innovative with the features and capabilities they bake into these things. I don't know who would be all that interested in buying a set-top that's basically a clone of an operator-supplied device.

Of course, he could try to buy a cable box off ebay (hey, here's a DCT 700 that's up for bid --
http://cgi.ebay.com/MOTOROLA-D...

Just buyer beware...not sure you'll have much luck getting it authorized for service by the cable operator.
Jeff Baumgartner 12/5/2012 | 3:34:36 PM
re: Man Bites MSO But it will be interesting to see just how quickly (or slowly) this retail market actually evolves. What the argument in this case seemingly fails to see is that cable operators, at least the ones I've spoken to, would very much like to see a retail market happen just so they can get some of that capex off their books.
frnkblk 12/5/2012 | 3:34:21 PM
re: Man Bites MSO "I think that for most people, if they could buy the box, they would," Meeds said.

Meeds couldn't be farther from reality. I would love it if I could eliminate this capex item from our budget. A slide deck from a recent cable show stated that some MSOs spend upt to 25% of their digital build-out budget on STBs.

The reality is that this credit and payment driven society doesn't want to pay retail price for the STBs. It's the same issue in the wireless service provider space.

One point to add, though: service providers do prefer to manage and support just a few well-understood CPE. How does the help desk explain to the customer that the reason their recorded video stutters is because the software is glitchy?
Jeff Baumgartner 12/5/2012 | 3:34:12 PM
re: Man Bites MSO No doubt. Getting STBs off the books is a great incentive for the MSOs. But I think it will be a hard sell to get a sizable number of consumers to buy cable set-tops at retail...if they basically mimic what they can get from their cable operators. At the same time, I'm intrigued to find out what EchoStar has cooking in the tru2way kitchen...no doubt a cable box that bakes in Sling. But they might likewise run the risk of offering set-tops with features also offered through the boxes that will be marketed by EchoStar's corporate cousin, Dish Network.
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