Deja Vu All Over Again
Time Warner Cable Inc. (NYSE: TWC) made big headlines this week when it launched its app for the iPad, the first from a U.S. cable operator to let customers stream live linear networks. The caveat is that access to those channels is limited to in-house viewing and, for now, to just 32 channels of the MSO's TV lineup. (See High Demand Crashes TWC's iPad App and TWC's iPad App Launches With (Some) Live TV.)
Soon after launch, however, high demand swamped TW Cable's authentication system, causing a crash and spurring TW Cable to remedy the problem by temporarily reducing the number of channels on the app's lineup to 15. TW Cable has since fixed the problem.
The MSO did a good job here owning up to it while keeping a sense of humor ("It's not a good party unless you run out of beer," TWC wrote on its blog). But it did acknowledge that the surge in demand at the beginning came as somewhat of a surprise and that "this is a nice problem for us to have" because it shows that customers really want the app.
But I'm kind of surprised that the initial popularity caught the MSO off guard, and it wasn't prepared to handle a spike in usage. After all, anything new on the iPad from a major service provider is sure to see heavy usage early on just from the sheer novelty of it all. At last check, the MSO's iPad app was the 21st most popular free app on iTunes, so customers did indeed flock to it.
And maybe TW Cable should've seen this coming, anyway. What happened this week has a few parallels with another new service TW Cable started testing out almost 10 years ago, and the initial results weren't all that different.
The service, back then, was "subscription" video-on-demand (SVOD), which let users watch episodes of The Sopranos and Sex in the City to their hearts' content so long as they were paying the monthly nut to get HBO. A decade ago, SVOD represented "the future of cable." Today, it's as common as the nose on your face.
TW Cable, as this July 2001 column by Leslie Ellis explains, tested SVOD with 26,000 HBO subs in the Carolinas and, lo and behold, early and apparently unexpected demand -- wait for it! -- overwhelmed the system, causing the VoD session setup gear to curl up into a ball and start sucking its thumb.
Back then, TW Cable called this a "good problem to have" -- quickly becoming the go-to refrain when a new service buckles under the stress of heavy initial usage -- and then set about to fix the problem before doing more tests and, eventually, deploying the service wide.
It was a lesson that TW Cable learned a decade ago, but that must've gotten misplaced somewhere along the way. The big difference this time around was that the system got hammered during a product launch rather than a limited market trial.
Plus, the crash occurred on a cool device like the iPad rather than on a Scientific-Atlanta Explorer 2200, so consumers don't seem to be too up in arms about this week's hiccup. But they may not be so forgiving next time.
— Jeff Baumgartner, Site Editor, Light Reading Cable