Portable Video: Why Cable Isn’t Toast
by Leslie Ellis // January 16 2006
Every year, it seems more and more necessary to brace for impact when entering the annual Consumer Electronics Show. Seems like every January, the glut of new technologies on display, and the big companies behind them, spawns a new verse in the “cable is toast” dirge.
This year’s version goes like this: Portable video players are The Thing. They’ll get their video direct from content owners, or from Google, or from places like Starz!, with its new subscription service, Vongo.
Thus, the video comes from The Internet. It rides, undetectably, “over the top” of the cable or DSL (digital subscriber line) broadband connection. What Vonage and Skype did with phone service over broadband, they and others, likely much bigger, will do with video.
Thus, cable is toast. Right?
Not so fast. For sure, the emergence of “over the top” video is a good news/bad news thing for cable operators. Bad news first: It isn’t going away. In fact, it will probably increase in both hype and actual momentum — especially if consumers vote with their dollars that portable video is just as alluring as portable music.
The good news is, over-the-top video isn’t the anti-Christ, either. Just as TV never did kill radio, the Internet won’t kill cable TV. Or satellite TV, for that matter. This is but another chapter of that same lesson.
Unless I’m missing something, over-the-top video is simply a way to augment what’s already available to people. It strikes me as highly unlikely that downloading video into portable devices is going to cause people to cancel their pay-TV subscriptions outright. Would you?
While squeezing through the CES mobs, I made a short list of reasons why cable isn’t toast, in light of the over-the-top video overload. Here it is:
1. It’s harder than it looks. Doing a decent job as a video provider, at the least, means doing a decent job at customer care. In short, who does Customer Jane call when something doesn’t work right? Giving good care means reasonably simple billing relationships, which means call centers, and a whole lot of operations.
2. Content is still king — and the network is the kingdom. C-COR’s Joe Materese quipped that line at last week’s Conference on Emerging Technologies, put on by the Society of Cable Telecommunications Engineers. His point: In order to fill the video canteen, you need to put it under the spigot.
A related notion: Are you going to cancel your cable subscription to exclusively download your video entertainment from the web? You’ve ripped your CDs into your iPod, sure. And maybe soon you’ll rip your favorite DVDs, or download your favorite shows, into your portable video player. But everything portable? Seems implausible.
If anything, downloading videos into portable players puts the bullseye on traditional video-on-demand (VOD) fare. Again: If you’re sitting on the couch, with the remote in your hand, do you opt to download something into the video player to watch, or do you pick something from the guide on the TV?
3. Cable operators can do it too. If you work for a cable operator, and you’re reading this, chances are you’re already offering broadband connections. Maybe you think you can lead your data customers to video via your portal. Could happen.
Here’s another way to look at it: Vongo is a subscription service from Starz!. Other program networks, premium or not, are putting together their broadband-side delivery plans. Cable is, at is core, an aggregator, right? If you’re Consumer Jane, do you want to buy 10 subscription packs from 10 different guys, or do you want someone to give you equivalent value, with one payment?
That said, it didn’t take much poking around to notice that none of the dozens of video players showed at CES were rigged specifically for cable. Mostly that’s because today’s digital cable boxes (and satellite boxes) don’t include a chip that does advanced video compression, known variously as MPEG-4, VC-1, and H.264. Advanced compression puts the extra squeeze on the video so that it fits better into the players.
But, the players rigged to plug into a broadband connection, in essence, plug into cable. Which brings us back to “you could do it too.”
Cable at CES
There’s lots of potential to miss stuff on a show floor that measures over a million square feet, mobbed with 150,000 people. Know that this year’s CES was deeper with cable-specific news than any year so far. Most of it was around OCAP, or the OpenCable Applications Platform. It even made the front page of the thick CES show daily on Friday, Jan. 6.
(Panasonic even had paid talent — of the type my friend Dave would call a “booth Betty” — who brightly said “OCAP” about a dozen times. Now that’s a milestone.)
Once again, it’s not yet time to curl up into the fetal position. Sure, over-the-top video is a threat to “traditional” video on demand. But ultimately, it’s a matter of viewpoint. Why not sauce up those 10,000 hour cable VOD servers to spit out content in a way that can be spilled into those fancy portable players? I mean, really. If there’s one thing this industry knows how to do, it’s delivering video — broadcast, or stored.
That means that over-the-top video raises the ante on getting portability into cable.
This column originally appeared in the Broadband Week section of Multichannel News.