Comcast subscriberOops, correction, he’s not a subscriber he just lives in their territory. Peter Ting of Dover, MA recently received a flier from Comcast in the mail promoting the TiVo DVR software. He was kind enough to scan it and send it to me. I did a little trimming and resizing. Click on the images for larger versions.

EDIT: User mtchamp from the InvestorVillage TiVo board snail mailed me his copy of the original flier and I’ve re-scanned the images. I also made a scan of just the fine print, which wasn’t readable in the earlier scans.

CableLabs has certified two tru2way-enabled CableCARD HDTVs from Panasonic, paving the way for them to be available to consumers this holiday season. The two models sport 42″ and 50″ HD displays. This is an important turn around from June, when Panasonic reportedly failed in their first tru2way certification attempt.

However, even if consumers can get their hands on the sets, there is no guarantee that they’ll be able to access tru2way content immediately. The cable industry has pledged to implement tru2way across their networks by July 1, 2009 - except for Charter which has until July 1, 2010. So early adopters may wish to check with their local MSO to see if tru2way support is available before jumping on these sets, or they may find themselves stuck with unidirectional CableCARD features until tru2way support is rolled out.

From Light Reading’s Cable Digital News.

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.

According to TWICE, Digeo is working on two Moxi cable DVRs. The first will be distributed through Charter later this month, to also be followed by ‘a second MSO’. It’s only four months after they announced this the first time. Back in May at The Cable Show Digeo announced that Charter would carry the Moxi 3012 HD DVR by the end of 3Q08. So they have less than two weeks to meet that goal.

Of course, back in January Digeo’s then COO, now President, Greg Gudorf told me that their cable DVR would ship by the end of 1Q08. So we’ll see how this roll out goes.

The other Moxi DVR will be a CableCARD consumer product sold at retail and expected to ship in January. That will be a year after Digeo suddenly canceled all of their planned consumer products, just days after showing them at CES and talking up the launch plans.

Details on the consumer product are thin, I’m presuming they’ll have something to say about it at CES in January. Of course, they did last year too. Unsurprisingly it will be a CableCARD-enabled DVR, and it will not be tru2way-enabled. It sounds like they’re pitching all the same features they were on the canceled products - music and photo access, content partners, home control integration, etc. For music content Digeo has lined up FineTune, Rhapsody and Sirius and they have Flickr for photos.

The one new item that I found interesting is that they’re implementing DLNA support. I’d like to see more products supporting DLNA, standards are good and DLNA has growing support across a number of products such as the Xbox 360, PS3, HP Media Smart TVs, Blu-ray players, etc.

Digeo is also apparently still working on their Moxi TV for PC software, which I was told was in beta and close to release at CES 2008 in January. Though according to TWICE they have it running on XP, Vista, and Media Center versions of Windows now, and not just XP as at CES. No word on when it might be available to consumers.

Gudorf told TWICE that Digeo is working on future products for post-July 2009 which will support tru2way. Digeo signed the tru2way accord in June. But I’m not even going to devote any mental energy to that until Digeo manages to ship something to consumers.

Digeo started talking about launching new consumer products two years ago, in September 2006. (Which I picked up, amusingly enough, from an article in TWICE.) I talked to them at CES 2007 where they were showing mock ups and no real products with the promise of shipping later in the year.

They insisted they’d ship in time for the 2007 holidays up through September. (Oddly enough, another article from TWICE. Is covering Digeo a September tradition for them?) Then in November they admitted they weren’t going to ship in 2007.

Then I talked to them again at CES 2008, and they were showing off some of the same mock-ups they’d had at CES 2007, as well as some actual products. Just a week later they canceled the products and laid off nearly half of their staff. Digeo’s Gary Gudorf talked to me the next day to offer clarifications, including that their cable MSO product would ship by the end of 1Q08, which it didn’t.

We didn’t hear anything else until April when details on the cable product emerged. And then in May they exhibited at The Cable Show and issued a press release announcing Charter’s intention to carry it. In June Digeo signed the tru2way accord.

And now here we are in September again, two years after they first announced their intention to enter the consumer DVR market, and they’re promising a box ‘expected to ship in January’. You’ll pardon me if I don’t hold my breath. Assuming they do exhibit at CES in January, I’ll check out their offerings, again. As I said when I covered them this year, I think they have some good design points. But none of it matters until they manage to get a box on retail shelves.

I hear it’ll come bundled with Duke Nukem Forever.

Tipped off by EngadgetHD.

EDIT: This got some attention in AVS Forum, including from a Charter rep, who wasn’t encouraging:

Ironically yesterday I got whispers from a contact in St Louis who works with someone who’s got a beta 3012 (Don’t get hopes up, so far it seems only a few elite managers and tech ops people in St Louis have gotten to beta this unit)

Apparently it’s still got quite a few bugs, which I think is very odd, given really all they needed to do was improve on the existing hardware and leave the software alone.

At any rate I don’t expect to see them in 2 weeks, heck at the rate things are going, I’d consider us lucky if we see them before Q3 2009

I’d say I’m surprised or that this is unusual so close to a planned release - but frankly this is what I’ve come to expect from Digeo. They’ve had one product actually make it to market, the BMC9000 STB series from Motorola running the Moxi software. But that launched back in 2004 and has been out of production for a long time now. At its peak it only reached around 400,000 users, and the number of Moxi uses is believed to be much smaller now as units have been replaced with newer, non-Moxi DVR models. Unsurprisingly the main MSO to use Moxi was Charter, which, like Digeo, is controlled by Paul Allen. But even with it being ‘in the family’ Charter’s use of Moxi was minor.

Moxi’s history since they were acquired by Digeo has been one of failed execution. Early on Moxi was on their way to being a competitor in the consumer DVR space and they had some cutting edge plans, then Digeo acquired them and refocused them on cable MSOs instead of retail. Digeo acquired Moxi way back in 2002 - and in six years what have they done? One product which never achieved more than minor market penetration, and is now well out of date and discontinued. Aside from that they have a history of press releases and announced partnerships, awards won for products announced but never shipped, staff layoffs, and repeated product delays and cancellations. If they didn’t have Paul Allen backing them I don’t see how they’d still be in business. Digeo needs to ship a product, a good product, to significant numbers of users, if they want to earn consumer trust again.

TiVo today reported their financial results for the second quarter of fiscal 2009, which ended July 31st. They had a good quarter, turning in their second profitable quarter in a row, and their third ever, with $2.9 million net income and $10.6 million adjusted EBITDA. TiVo highlighted a few items in their release:

- Adjusted EBITDA for the second quarter was $10.6 million compared to a loss of $(11.2) million in the year-ago quarter, exceeding guidance
- Net Income for the second quarter was $2.9 million compared to a loss of $(17.7) million in the year-ago quarter
- TiVo service on Comcast now available in Connecticut; Comcast will also continue to fund development work for the TiVo product to expand the feature set and add support for the Tru2way infrastructure
- TiVo and Entertainment Weekly join forces to connect TV viewers with their favorite shows on an automatic basis
- TiVo successfully launched in Australia by Seven Networks
- YouTube videos now available on the TiVo service; TiVo now provides access to more television and broadband content choices than any other offering in the world
- TiVo’s recent research deal with media marketing research firm TRA ties anonymous viewing behavior to product purchases in millions of homes; Significantly changing the quality of information available to marketers

TiVo is continuing to bleed subscribers, which was expected. With DirecTV continuing to push their in-house HR20/21 DVRs are upgrades for DirecTiVo users, even with additions from Comcast, Cox, and Cablevision Mexico, TiVo lost 136,000 net MSO/Broadcaster subscribers. And while TiVo added 36,000 gross TiVo-owned subscribers, they lost 78,000 gross TiVo-owned subs, for a net loss of 42,000 TiVo-owned subscribers. This is mainly due to legacy subscribers upgrading to HDTV and opting for cable or satellite DVRs. This leaves TiVo with 1.686 million TiVo-owned subscriptions and 3.623 total cumulative subscriptions.

This may sound bad, but it is also partly because TiVo has made massive cuts in their marketing efforts to focus on profitability instead of subscriber growth. For the quarter just ended their subscriber acquisition cost was only $135, a massive decrease from the $758 of a year ago, and only a slight up-tick from the $118 of last quarter. Instead of lots of marketing, subsidies, and rebates, which drive up SAC, TiVo is focusing on working with retailers and other vendors to bundle TiVo with HDTV purchases to capture those upgraders before they pick up another DVR. They’re also focusing on their partnerships with Cablevision Mexico, Comcast, Cox, and Seven Network in Australia.

And in that area things are looking good. The TiVo launch in Australia with Seven Network has been going well and TiVo is happy with it, though actual figures have not been released. And Comcast is finally ready to start a major marketing push and to announce more territories:

In regards to our mass distribution strategy, a top Comcast executive offered the following comments on the progress the TiVo on Comcast service has made to date: “We are pleased with the progress of the TiVo service and have broadened its footprint in our New England market to Connecticut. Refinements to optimize the product’s performance have been mostly completed, significantly improving the user experience. Importantly, we intend to light up a full marketing campaign around TiVo in September and, upon this occurring, we will be announcing multiple additional markets to which TiVo will be rolled out through next year. We will also continue to fund development work for the TiVo product, which will include expanding the feature set and adding support for Tru2way infrastructure.”

Rogers stated, “Additionally, the TiVo service on Cox, which is currently in trials, is on track for a launch in Cox’s New England market later this year.”

“On the international front, Seven and TiVo successfully launched the TiVo service in Australia and because of the significant consumer demand there, retailers chose to release the product early. We are also extremely pleased with the marketing shoulder Seven is putting behind this launch as they’ve prominently featured TiVo in their marketing and programming including the Olympic opening ceremonies, their top rated morning show, and a special advertising spot they developed, which includes dozens of Australian celebrities. International distribution is an increasingly important component of our business model and there continues to be tremendous interest from international distributors for the TiVo offering.”

During the Q&A session when asked if Comcast had gotten to the point where they don’t require a truck roll for the TiVo software install, Rogers answered that that issue was a dependency on non-TiVo software and that Comcast was close to deploying the solution. It sounded like that was the gating factor for Comcast to launch the marketing effort, and that also helps explain Comcast’s satisfaction despite the delays, it doesn’t sound like it was TiVo’s problem.

During the Q&A session at the end of the call, Rogers once again mentioned a tru2way TiVo box, what the user community has started calling a ‘Series4′. He didn’t offer any specifics (unsurprisingly), but his feeling is that it will take more time for the industry to establish a national tru2way playing field to make it viable to release such a product. Personally I think that they may show something, prototype perhaps, at CES in January with the release for later in 2009 as most of the cable MSOs have pledged to have tru2way in place by July, 2009. Just my speculation.

You can get more information from TiVo’s release and key metrics.

EchoStar Monday announced that they’ve signed a tru2way Host Device License Agreement with CableLabs, which allows them to implement devices using CableCARD and OCAP/tru2way. This may seem odd at first, since EchoStar is often conflated with DISH Network, but remember that EchoStar and DISH split into separate companies, and EchoStar is pursuing non-satellite markets such as OTA with the DTVPal (ironically being marketed by DISH Network) and cable with devices like the SlingModem, from EchoStar subsidiary Sling Media.

This license does open up new possibilities. A CableCARD-enabled Slingbox, perhaps. EchoStar could take their DVR platform, as used by DISH Network, and re-purpose it as a CableCARD DVR for cable MSOs and/or consumers. Something like the recently announced 722s DVR with built-in Slingbox & SlingCatcher features, only for cable, could be quite an interesting product. (Perhaps waiting for the final act in the DVR patent lawsuit with TiVo to remove any uncertainty for customers.) They could produce a whole new cable STB unrelated to any of their current platforms. It will certainly be interesting to see what they do with the license, I’m sure they didn’t sign it just for laughs.

Their press release is below:
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