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Cable Technology Feature Article

March 15, 2014

Cable Technology Week in Review

By Tara Seals, TMCnet Contributor

Over-the-top (OTT), 4K HDTVs, legal wrangling and more were in the news this week, making the theme of the last few days undoubtedly ‘innovation.’

When it comes to home entertainment distribution, it seems like all we hear is “video on demand” this and “Netflix” that. And indeed, online streaming services grew to represent more than a quarter of the consumer entertainment market in the U.K. last year, signifying a big consumption shift to new ways of accessing media. According to new figures from the Entertainment Retailers Association (ERA), booming subscription sales by services like Netflix, Lovefilm, Spotify (News - Alert) (News - Alert) and Deezer led the streaming market to claim 26 percent of overall entertainment revenue in 2013. That said, if you remember the days of browsing vinyl at the local platter shop with sepia-toned fondness, don’t despair: the numbers of outlets stocking music and video fare reached an all-time high, with independent retailers in particular thriving in the U.K.

Speaking of streaming, Amazon’s OTT streaming set-top could be shown off any day now, and it looks like it’s coming with Netflix and Hulu, not just its own Prime Instant Video service.

Amazon originally prepped the launch for the holiday shopping season, but had to postpone the debut for undisclosed reasons.“I’ve now confirmed that thi s will indeed be the case, and that Hulu Plus will be available through the device as well,” said GigaOm’s Janko Roettgers. “However, some mid-sized, more niche-focused video publishers told me that they haven’t been asked to join.”

Businessweek broke the news about the plan last year, which calls for a standalone box that has built-in access to an a la carte video on demand (VOD) store, which features newer films and TV shows, and Prime Instant. Sources said at the time that is was also likely that Amazon would take an aggregation approach to third-party content for the STB.

All of this is apropos to consider given that the fourth quarter of 2013 survey from TiVo (News - Alert) shows just how bad things may be getting for both cable and satellite. The Video Trends Report showed that 30.9 percent of respondents are “overwhelmed” by the number of channels, while fully 88.2 percent essentially watch just the same few channels. Almost half, or 46 percent, of respondents spent at least 10 minutes channel surfing over the course of the day, sifting through the variety of choices available, but 80.3 percent are consistently watching just 10 channels, or fewer. Interestingly, 53 percent would like to see channel guides start recommending content according to what the viewer prefers to watch, but just 19.6 percent of respondents are outright unhappy with the provider currently selected. Dissatisfaction continues to be a function of increasing fees, in both television and Internet service, with “bad channel selection” in third place. Video on demand offerings are getting socked as well, with between 72 and 73 percent of respondents are no longer ordering pay-per-view. But 45.3 percent of respondents are already turning to services like Hulu and Netflix to get content.

At the same time, there’s so much change afoot in business models that the legal landscape has really heated up. Next month, innovator Aereo and broadcasters plead their cases to the Supreme Court; with CBS saying on March 12 it will stop its broadcasting model if the upstart wins. Comcast awaits a decision from the feds on its contested bid to merge with rival Time Warner Cable. Politicians have introduced legislation to wipe out sports blackout rules. And the net neutrality beat goes on.

Lawyer jokes aside, to survive and thrive in the ever-changing TV world, you’d better have top-shelf counsel on hand and current, as there’s nothing funny about litigation, laws and decisions that could freeze or kill your business and technology plans, products, services, patents and mergers.

Moving to gear, new devices threaten to drive even more change. Strategy Analytics said that the outlook for ultra HDTVs in Europe is good, with 41 percent of people surveyed saying that they were “somewhat likely” and 15 percent “very likely” to purchase one; those percentages from U.S. respondents were 38 percent and 20 percent, respectively. The results show a distinct intent for consumers to purchase the new types of televisions, which improve on the quality delivered by traditional HDTVs. But their collective intent to purchase new sets is only one side of the coin. Beyond simply intent, respondents showed themselves to be aware of the term “ultra HTDV” more than they were aware of “4K TV” or “UHD.” Compared to the whole, a younger generation of respondents between the ages of 25 and 34 indicated that they were more likely to purchase a new television than other age groups identified in the survey.

Apple (News - Alert) for one seems to be preparing for a 4K UltraHD world, offering the option to run its OS X Mavericks beta 10.9.3 operating system with native 4K resolution on compatible monitors.

Apple rumor site 9to5 Mac said that Apple is calling the 4K support "Retina,” and noted that it will scale the operating system to the UltraHD display specs by adding lines of pixels—so the graphics don’t look oddly outsized for users anymore. “Before this update, users with Macs connected to a 4K display would simply experience their content on a larger scale with window elements spread out,” the site noted. “Macs on 4K displays essentially were given [about] 4,000 lines of room to accomplish their tasks. Prior to this 10.9.3 beta, users have solely been able to run their Macs at a Retina/pixel-doubled resolution using unofficial hacks.”

When it comes to regulatory news, TiVo headed to Capitol Hill this month, arguing that dropping the ban on integrated STBs would unfairly disadvantage third-party STBs like its Roamio box. A provision in the Satellite Television Extension and Localism Act (STELA) would essentially eliminate mandate that operators use CableCARD security add-ons for channel encryption and digital rights management (DRM).

TiVo senior VP and general counsel Matthew Zinn said the provision would "undermine the retail market for set-top boxes and deprive consumers of choice,” and that it was a "completely unrelated provision that was slipped in to the STELA reauthorization legislation pushed by a cable lobbying group to eliminate choice in how consumers watch cable programming."

In 1996, Congress ordered the FCC (News - Alert) to establish rules to promote the development of third-party cable STBs, with regulations requiring that the cable industry develop standards that would enable third-party devices to interoperate with the incumbents' networks and unscramble channels for authorized users. The CableCARD was the fruit of that. But, cable incumbents would, of course, prefer to have customers use their own proprietary set-top boxes, to maintain maximum control over the customer UI and therefore additional revenue streams from video on demand (VOD) and so on.

Meanwhile, in the world of broadband infrastructure, Huawei (News - Alert) has taken a significant step in the evolution from transport networks to all-optical networks. The company has announced the release of the wavelength-based multidimensional all-optical cross-connect technology. What makes the prototype run smoothly is an optical engine that helps the integration of a programmable million-pixel array into a 1cm 2 silicon wafer. This is no mean feat as Huawei notes this integration is very similar to integrating a million tiny mirrors into a space no larger than a coin. The new optical cross-connect prototype enables the implementation of the functions of 16 independent optical modules. It also supports bidirectional free cross-connect of 8-dimension 640 x 640 waves and all these capabilities result in the improvement of integration and reduction of cost.

To check out more details on all of this and more, visit our homepage. And have a great weekend!

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