Six Issues That Will Shape 2011

The year ahead will be a challenging -- and even trying -- one for cable operators. That’s nothing new, however. Every year has its share of surprises, good and bad.

While nobody can predict precisely how the future will roll out, it is possible to identify key issues and suggest how they will move forward during the year ahead. This feature will look at six interrelated topics that are likely to grab the headlines once the ball at Times Square is put back in storage and the confetti swept away.


Some of BGR’s earlier of coverage of OTT can be found  here.

The biggest issue of 2011 most likely will be the threat from over-the-top sources of programming. The industry must determine whether the danger is significant, or if it is, as some people maintain, over-hyped. Operators must take their best guess and map out an appropriate response.

Bruce Leichtman, president and principal analyst of the  Leichtman Research Group, doesn’t quite say that the sky isn’t falling. That is, however, the essence of his assessment on the threat to operators’ core business.

Leichtman thinks that the biggest impact won’t be an avalanche of churn. To date, he says, the only truly successful OTT source that delivers programming roughly akin to cable’s is Netflix. Hulu hasn’t generated too much traffic and YouTube doesn’t provide programming that is competitive to cable. The biggest impact of the OTT programmers, he concludes, is the stress the delivery of these other video products will have on operators’ broadband networks.

The bottom line to Leichtman is that cable’s subscribers are safe. “I think when you look at OTT, the biggest mistake is to think of it as cord cutting,” he concludes.

While Mike Paxton, a principal analyst for  In-Stat, doesn’t think that cable’s sky is falling, he does see vulnerabilities at two extremes. He suggests that early adopters will be tempted to, in essence, put together their own channel lineup. The other side of the coin – and the bigger of the threats, Paxton says – is the universe of people who simply don’t want to pay for a number of basic channels that they don’t watch.

The industry is reacting, he stresses: “There is a two-pronged response. One is [for operators] to offer their own IP video services and the other is to make channel packages more attractive to those who may leak away to the OTT services.”

There will be pressure from cable’s recent slide in basic subscribers, which, for whatever reason, is happening and a legitimate concern for operators. This may goad operators to act more quickly. One sign that things are changing was the recent news that Comcast is testing a hybrid cable/IPTV set-top.

The question will be if the industry moves as quickly as its nimble new competitors, says Jia Wu, an analyst for  Strategy Analytics: “Netflix is doing a lot of things with new pricing, and Hulu has added Hulu Plus. Those guys may be doing [more than cable operators] or have much better PR or marketing and are letting people know they are doing new things.”


Some of BGR's earlier coverage of tru2way can be found  here.

The year that is ending seemed to be one of ramping up for tru2way, the industry’s Java-based approach to providing interactive functions and applications to set-tops. Unlike EBIF – which is something of a stopgap to get a basic level of interactivity into already deployed STBs -- tru2way is aimed at new boxes.

Shiva Patibanda, generation manager of the in-home business unit of SeaChange, is optimistic about tru2way. Currently, he points out, the technology is present in 3 million STBs deployed by Time Warner Cable.

Patibanda also points to Comcast, which he says is set to deploy tru2way in great numbers in 2011. He believes the MSO’s approach is a step toward easier mass deployments of the technology.

“Comcast is different from Time Warner Cable and the others in that they single out one approach – based on [CableLabs’] OCAP Reference Implementation,” he says. “If all suppliers of tru2way use the OCAP RI, applications can be tested once and verified to the market.”

The year ahead could be a good one for the approach. “I feel very good about tru2way. We will see deployments from large MSOs next year,” he concludes.


Some of BGR's earlier coverage of MoCA can be found  here.

One of the key goals for cable operators is to make their programming available as efficiently as possible throughout subscribers’ homes. It always was obvious that the industry would use coax for this task, of course. During the year, the industry unified behind the Multimedia over Coax Alliance (MoCA) for the first big whole house task, which is routing of DVR content.

The news is for 2011 is good, according to Rob Gelphman, chairman of the Marketing Work Group at Multimedia over Coax Alliance. “Cox, Comcast and Time Warner all are going with MoCA,” he says. He adds that though MoCA was not specifically mentioned in Time Warner Cable’s announcement of its high end Signature Home service, the operator indeed is using the spec. “We know that other operators are in trials,” he says. “It is looking very good.”

Adaptive Streaming

Some of BGR's earlier coverage of adaptive streaming can be found  here.

The ability of cable operators to send correctly formatted video to televisions, mobile devices and PCs depends on adaptive streaming. This is a complex job – and the fact that there are three candidates vying to do the job -- Microsoft’s Smooth Streaming (an element of Silverlight), Adobe’s Dynamic Streaming and Apple’s HTTP Live Streaming (HLS) – doesn’t simplify things.

It is a lot for operators to work through, and 2011 will be a pivotal year in the effort. Ramin Farassat,  RGB’s VP of marketing and business development, thinks that 2011 will be a busy one for operators.

“What is going to happen in 2011 is that there will be a lot of actual deployment and growth for three-screen,” he says. “It’s really important. I would not say it is the same for all cable operators. Most of larger ones already are in their labs testing and building architectures, and so I think they are very, very close to being able to launch.”

Wireless Services

Some of BGR's earlier coverage of wireless services can be found  here.

There are two interrelated ways in which 3G and 4G services will play into the cable industry’s immediate future. The first – backhauling signals for wireless carriers – is a big potential business.

The other bookend is that cable operators could offer their own cellular service. The industry, of course, has long sought a cellular piece to fit into the bundling puzzle. This was the driver of the ill-fated Pivot initiative and cable’s investment in Clearwire. More directly, Cox last month announced 3G services in Orange County, CA, Omaha and Hampton Roads, Va.

Cable won’t roll out 3G services on a wide basis in 2011. But getting into the business certainly is intriguing, and has the industry watching the Cox rollout. The opportunities seem significant, both for backhaul and cable-based services. John Dalhquist, VP of marketing for  Aurora Networks, notes that 3G and 4G base stations are no longer even built with T1 interfaces. The move to Ethernet plays to cable’s strength. Whether it be backhaul or end user services, Dahlquist is optimistic: “The thing is that cable wins” in both cases, he says.

Energy Star

Some of BGR's earlier coverage of Energy Star can be found  here.

The industry, its vendors and the Environmental Protection Agency’s Energy Star initiative are expected in early 2011 to finalize the third version of the spec, which would take effect in August 2011. The proposed specifications recently were posted at the EPA site, says Katharine Kaplan, team lead for Energy Star’s Product Development.

The equation is to sufficiently cut energy requirements without impacting how operators run their systems or impact end user performance. “The requirements of the proposal that would go into effect during the summer of 2011 steps the program up with interesting and significant energy saving opportunities,” Kaplan says. “It pushes down on power allowances and tries to incent very efficient base boxes in multi-room configurations with hub DVRs and thin client/satellite boxes. It also incents through credits service providers’ use of deep sleep mode for very lower power consumption.”

The general feel as the new year dawns is that much the OTT drama will begin playing out in earnest and that enabling technologies – such as tru2way, MoCA and adaptive streaming – will make progress. Energy Star for STBs and cable’s tabling in the 3G and 4G realms also will make things interesting.

Carl Weinschenk is the features editor at BGR. Reach him at

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