In a filing yesterday with the FCC on the current status on CableCARD deployments the NCTA revealed that there have been a total of over 374,000 CableCARDs deployed for use in Unidirectional Digital Cable Products (UDCPs), such as the TiVo HD, by the ten largest cable MSOs, which cover roughly 90% of US cable subscribers. That may sound like a lot, but in their last filing 90 days ago in June, they reported over 372,000 CableCARDs for the same ten MSOs and 90% subscriber base. That implies that only 2,000 CableCARDs have been deployed to UDCPs in the past three months by the top 10 cable MSOs - combined. That’s nothing. It would also make me wonder a bit about the sales of the TiVo HD, since I’d expect nearly all of those to have at least one M-Card CableCARD.

That is, of course, if the numbers are true - and they may not be. See the table below and especially the first footnote¹. Comcast’s numbers for September are estimated to be 10-15% lower than actual due to an internal error. We could be looking at an increase of more than 34,000 users instead of only 2,000!

While 34,000 would certainly be better than 2,000, it still isn’t really setting the world on fire. Maybe the M-Card is a ray of hope in those numbers - if customers who previously used two S-Cards are trading them in for a single M-Card on devices like the TiVo HD, it would result in a lower cumulative number. Still, I don’t expect that’s a huge number either.

This is not to say that the total number of CableCARDs in use is that small, not at all. Since the FCC’s ‘integration ban’ went into effect on July 1, 2007, forcing cable MSOs to begin using CableCARDs in their own STBs, those same ten MSOs have deployed over 7,800,000 CableCARDs in their STBs. So in less than fifteen months they’ve deployed more than twenty times the number of CableCARDs as have been issued for 3rd party UDCPs in the four years they’ve been available.

The integration ban was supposed to force cable MSOs to ‘eat their own dog food’ and thereby improve support for CableCARDs. The idea was that this would help foster the overall CableCARD market. Better support from MSOs would lead to more products, which would mean more 3rd party UDCPs in the field. For the most part, this hasn’t happened.

Why not? Well, I think I can sum it up in one brand name: tru2way. Starting late last year, and getting an official launch at CES in January, OCAP became tru2way and marked a push to get consumer electronics companies on board. Then starting with Samsung in May, followed by a larger push by Sony later that month, CE vendors started jumping on the tru2way bandwagon.

What does this have to do with slow CableCARD adoption? Well, these same CE vendors have held off on releasing UDCPs while they work on tru2way-enabled devices. Why invest in developing and marketing a unidirectional product when you’re going to obsolete it with a two-way product in a year? The first tru2way products are starting to trickle out, and there will probably be a bunch of them on display at CES in January. So I think the push for tru2way was a major contributor to lax CableCARD pick up. Vendors just haven’t been releasing CableCARD-enabled products so there aren’t many options for consumers, which naturally means not many cards are being deployed. Really the only major CableCARD product out there right now is TiVo. CableCARD TVs are thin on the ground. CableCARD-enabled Media Center PCs have had anemic sales. And Digeo outright canceled their Moxi CableCARD HD DVR.

CableCARD was slow out of the gate, and by the time MSOs had the infrastructure worked out vendors were already looking toward round two with tru2way and they just decided to sit round one with UDCPs out entirely. The deployment of SDV and the need to develop a Tuning Adapter, and to support it, was very likely a factor in that as well. I don’t expect to see any real pick-up in CableCARD utilization until a sufficient number of tru2way devices are available to consumers, and then I do expect to see a real uptick.

The filing also has information from several MSOs on their CableCARD pricing and install practices. To compare June to September:

¹Comcast states that their September number may by low by 10-15% due to internal reporting errors.

The count for this reporting period of CableCARDs installed in one way retail devices in active customer homes is estimated to be 10-15% lower than the actual number due to internal Comcast reporting errors that are the result of an internal Division reorganization during the reporting period. The next quarterly report will more accurately reflect the actual count.

Since Comcast has such a large installed base this could be the reason for the seemingly small total uptick. The other four combined yield an increase of 3,429. Comcast’s apparent drop of 1,383 drags it down. But if they’re short just 10% they would actually have an increase of 20,334 users. And 15% would mean an increase of 31,192! So we’d be looking at a total increase of 23,763 to 34,621 - rather more than around 2,000. And that’s just from these five MSOs.

²Comcast allows self-installs in at least some areas - 68% used truck rolls, 32% were self-installs.

³First card is free, fee for additional cards.

⁴$10.43 if install is included with other services, $25.14 if purpose visit.

⁵0.2% of Time Warner installs are self-install, which is negligible.

⁶The average is $2.26, but they report most divisions are $1.75 - which must mean the remaining divisions are rather higher to bring the average up.

I posted this morning about LG Electronics signing the cable MOU on tru2way. Well, it looks like Funai Electric has also signed it. You may not be familiar with the Funai name, but Funai markets their products under the Philips, Magnavox, Sylvania, and Emerson brand names and also provides ’store brand’ units such as Insignia for Best Buy and Pye for Circuit City.

Picked up from TWICE.

Originally announced as an agreement between Sony and the cable industry, and then signed by additional CE vendors, the tru2way MOU has now been signed by LG Electronics. They’re planning to release tru2way-enabled HDTVs starting in 2009.

Press release below:
Read the rest of this entry »

Reader Glenn pointed out in a comment that the details of the Memorandum Of Understanding (MOU) first signed by Sony, and then additional CE vendors, have been revealed in an FCC filing. Both Multichannel News and Light Reading’s Cable Digital News have taken a look at the MOU, and now it is my turn. So, let’s look through the MOU for any interesting tidbits.

The MOU refers to the ‘Founders’ repeatedly - these are the cable MSOs: Comcast Cable, Time Warner Cable, Cox Communications, Bright House Networks, Charter Communications, and Cablevision. New two-way devices are referred to as Interactive Digital Cable Products (IDCP), in contrast to the one-way Unidirectional Digital Cable Products (UDCP). Under the terms of the MOU, the Founders agree to support tru2way on all of their digital cable networks by July 1, 2009 - except for Charter which has until July 1, 2010 to complete their roll-out. The MOU also codifies that the tru2way specifications will be the sole means for IDCPs to access interactive cable services.

While consumer electronics adopters must adhere to the tru2way specifications and license, innovative features that are not specified but that are consistent with the specs and license ‘are allowed and encouraged’. That seems to leave room for innovation, but it remains to be seen how narrowly ‘consistent’ is evaluated. To help ensure solid support for tru2way the cable MSOs have to eat their own dog food, as it were. After July 1, 2009 (again, July 1, 2010 for Charter) the Founders agree that at least 20% of their STBs will support tru2way. That holds until they’ve deployed at least ten million tru2way-enabled STBs. This is to ensure a sufficient install base that the Founders will have a vested interest in ensuring solid support.

Since tru2way is largely a firmware specification, and specifications can evolve, the Founders agree to support any given version of the tru2way Middleware used by an Adopter’s product for five years from the date of that version’s first certification. So, in effect, that should guarantee a minimum product life of five years. Of course, it could easily be longer as Adopter’s products could receive firmware updates, and the Founders could support a Middleware version for longer than five years. Clearly it would be up to the Adopter, the CE vendor, to provide updates to newer tru2way Middleware versions, which is only fair. And to help ensure that is possible, there is an equal access provision in the MOU. Any given tru2way Middleware revision will be available to Adopters at the same time it is available to Founders. So the MSO’s won’t have any unfair advantage in being able to bring newer features to market first.

As for guide data, which was long a bone of contention over OCAP, any Founder’s digital cable system which carriers a CBS broadcast signal (which is pretty much all of them) which contains the Gemstar-TV Guide EPG data and where that Founder has an agreement covering the Gemstar data, must not block or remove said data from the CBS signal. In English? Well, Gemstar-TV Guide has an agreement with CBS to carry their EPG data. This data is used by a number of TVs, VCRs, DVRs, DVD Recorders, etc, to provide a simple on-screen EPG. The data is carried in the VBI, the vertical blanking interval, and are not part of the video itself. This has been an issue in the past as some cable MSOs have stripped out this data from the broadcast when processing the network feed for redistribution, hence making it inaccessible to CE devices that rely on it for their EPG.

So this agreement means that the Founder agree to not block or strip the data, when it is carried by the local CBS affiliate and they can legally do so, of course. This provides CE vendors with a data source for a ‘native’ EPG, as opposed to relying on the tru2way MSO-provided EPG, or a out-of-band EPG downloaded separately, as in a TiVo. The broadcast EPG does generally lack the full level of detail found in a downloaded EPG, or even the MSOs EPG, but it has the advantage of being readily available in the received signal and gives the CE vendor the ability to process and use the data as they wish, unlike the tru2way guide which comes as-is.

While the agreement seems to treat tru2way as the primary means of navigation, Adopters are free to overlay their own ‘native’ navigation with four prerequisites: 1. It must be initiated by the user each time (such as through a remote action), 2. it must be only for navigation (no ads, etc), 3. It must be transitory (sounds like once the action is complete it should return to tru2way-mode), and 4. it must appear the same on all channels. So no special ABC navigation screen that isn’t used on NBC, etc.

There is a ’sunset’, or exit clause for the MOU. Starting July 1, 2009, if fewer than 500,000 new retail IDCPs are connected to the Founders’ networks within any given 24 month period then the Founders are no longer bound by the MOU. Basically, if the Adopters, the CE vendors, don’t hold up their end of the bargin and produce enough IDCP devices, then the cable MSOs are no longer bound to spend their money supporting tru2way on their networks and they’re free to stop, try something else, etc. Considering the number of TVs, DVRs, etc, sold at retail in this country each year, this shouldn’t be a problem - if and only if the CE vendors step up and start tru2way-enabling a sufficient number of device models. So the ball is in their court.

Licensing for the IDCPs will be under the existing CableLabs licenses, with some amendments. Certification of devices will be through CableLabs IDCP testing. Once a vendor has had five mutually agreed upon devices certified by CableLabs, then they are eligible to self-certify future devices. This is one of the compromises in the agreement. CE vendors didn’t want the expense and hassle of going through CableLabs for each new product, while the cable industry didn’t want the potential havoc caused by bad devices being connected to their networks. So now once a vendor has proven their competence level through CableLabs certification, they can be free of that requirement.

Under the MOU CableLabs will establish a Founders Advisory Board (FAB) which will apparently serve as a kind of arbitration group when changes to the tru2way hardware specification are proposed. As the board is currently specified there are nine votes - one for each of the Founders, and one for the CE Adopters as a block, one for the IT Adopters as a block, and one for the content providers as a block. That means that, should they vote in unison, the cable MSOs would always carry a majority. And you’d actually need two MSOs to break ranks and vote with the other blocks to swing the majority. But the vote is also only advisory and non-binding, so I’m not sure what it is in aid of other than as an opinion poll for the parties involved. And, of course, the FCC still has final say in the end.

CableLabs also agrees to approve or disapprove any new digital output system or content protection system within 180 days of the proposal being submitted by an Adopter, on a ‘reasonable and nondiscriminatory basis’. This will probably come into play with technologies akin to TiVo’s TiVoGuard, which protects TiVoToGo transfers. As CE vendors look to innovate and develop whole home distribution systems, etc, there may be new technologies developed to satisfy the rights holders that their content is being protected. And if CableLabs disapproves the technology, or simply fails to act within 180 days, then the Adopter can appeal to the FCC which is expected to handle the appeal in a 90-day process. Remember that a while back the NFL and MPAA tried to block TiVoGuard and TivoToGo, but the FCC approved it.

But there’s another way to get a new technology approved. If four members of the MPAA agree that the new system provides adequate content protection, then that technology will be automatically approved by CableLabs.

If tru2way is sunset and CableLabs defines a successor to CableCARD or tru2way (such as DCAS) then Adopters who are party to the MOU may participate in the development of the successor.

The definitions have some interesting tidbits. Under the MOU, ‘Digital Cable System’ only covers systems with one or more QAM channels, operating with a capacity of 750MHz or higher and with a minimum of 5,000 basic cable subscribers.

Not a lot of information, really, but it is clearly a compromise with some give and take by both the cable MSOs and the consumer electronics vendors, which is what we needed to un-roadblock two-way cable development. It is interesting that Charter gets an extra year to complete their tru2way roll-out, compared to the other five Founder MSOs. I guess Charter must be further behind in their progress than the others. Of course, I just happen to currently reside in Charter territory. Note though that the dates are for completion of deployment, some areas already have tru2way support and many more will before the year is out.

After Sony and six major cable MSOs recently came to an agreement on tru2way, other consumer electronics companies were invited to sign the same agreement. And now it seems others have, the signatories now include ADB, Digeo, Intel, Panasonic, Samsung, and Sony. As more vendors sign on to the agreement we’ll start seeing more options in two-way cable devices.

Their press release:
Read the rest of this entry »

Well, this could be the end of the push for DCR+. Sony had been the big name still pushing for DCR+, as opposed to OCAP/tru2way. Well, it seems that’s no longer the case. Sony has come to an agreement with the six largest cable MSOs in the US, Comcast, Time Warner Cable, Cox, Charter, Cablevision and Bright House Networks, which collectively server 82% of US cable subscribers, over 105 million US homes. The national two-way cable agreement will see Sony supporting tru2way under streamlined licensing agreements. Other consumer electronics companies have been invited to join the agreement as well.

So it looks like OCAP/tru2way will end up the industry standard, and the DCR+ push is likely to fade away now. The full terms of the Memorandum of Understanding that covers the agreement have not yet been released, giving other potential signatories time to review it. I’ll keep an eye out for those terms once they’ve been released.

I’m just glad to see an apparent end to the stalemate. If the CE industry in general embraces tru2way then it opens the floodgates for more advanced cable products for consumers, which is a good thing.

The press release announcing the agreement is below.
Read the rest of this entry »

PC Magazine’s Dan Costa has written an article entitled ‘TiVo Is Not Dead Yet’, in which he expresses his opinion that despite ‘conventional wisdom’ that has seem a lot of people chime in with doom and gloom predictions for TiVo’s future, TiVo actually has a solid chance to succeed. Of course, he says that this is if they were to take his advice, and he lays out four major rules for TiVo.

The first is “Play nice with cable providers“, and he mentions the work with Comcast and Cox, and that TiVo shouldn’t compete with cable companies. But he doesn’t mention the development of the Tru2Way-enabled TiVo which could be offered to both consumers and cable MSOs and support all of the advanced services. So I think TiVo is already doing this quite nicely.

Next is “Be a software vendor” where he tells TiVo to focus on software and forget the hardware. This has come up repeatedly, and TiVo has repeatedly explained why they need the hardware. Controlling the hardware allows them to innovate and offer new features. Note that neither the DirecTiVo nor the Comcast OCAP software support most of the features available on the standalone boxes. TiVo would be a much, much more limited product if they only produced software for other vendors’ hardware. Having the standalone hardware allows TiVo to innovate and to drag the competition, kicking and screaming, forward. It provides competitive pressure.

Third is “Don’t just watch TV“, in which he extols TiVo to go beyond TV with more deals like Rhapsody and YouTube. I don’t think that’s a problem, since he’s basically telling TiVo to do something they’ve repeatedly stated will be a cornerstone of their plans.

And last is “Be social“. This one I think is worth partially quoting, because I have said TiVo should do the same things:

Be social. With nearly four million very engaged subscribers, TiVo has one of the most active social networks around. The company already lets users make recommendations and share videos. TiVo should evolve as a platform for members to talk about programs, create their own content, and share media.

Yes, please! I started suggesting similar things a few years ago. Let friends setup TiVo-based social networks to share recordings. And if that’s too daring to start, how about letting us share Suggestions - let me Suggest that my friend’s TiVo record a specific show. “Hey, check this out.” Setup discussion boards where users can share ratings and discuss shows. Let us upload the Thumb Ratings from our TiVos and match us with others who have similar tastes. There is really so much TiVo could do to foster community involvement that it is overwhelming - but right now they aren’t really doing anything. And that’s really frustrating.

Oh, and in case Dan reads this:

I do have an ulterior motive for writing this column. Right now, using a TiVo box—assuming I can get CableCard to work—means losing about half of my high-definition channels. That isn’t a trade-off I am willing to make. If TiVo could make nice with Cablevision, I could have my high-definition Dwell and watch it, too.

I presume that’s due to Switched Digital Video (SDV). Two words: Tuning Resolver. The solution is already in the works.