Since the late 1980s, the American cable-TV industry had relied on the provision of a set-top box that they lease to customers as a way to control the business relationship. This was even though since the start of that decade, most “brown-goods” companies sold TVs and video-recorders with “cable-ready” tuners that can be directly connected to a cable-TV service.
The consumer-electronics industry and related press had been crying foul that the cable companies were effectively controlling their customers and these customers couldn’t gain access to desireable functions that the devices offered like picture-in-picture or improved remote controls. As well, the cable companies have required that customers use these set-top boxes for advanced services like pay-per-view TV and have supplied set-top boxes which are PVRs. Even the CableCARD technology which was to put more power in the customers’ hands has been met with frustration such as requiring a truck-roll for the installation of this equipment even though it could be supplied as a self-install kit.
A trend that is breaking through and affecting pay-TV is to use the home network to distribute the content to the display device. The need to bring this about was driven by the popularity of the Apple iPad and other tablet computers being used to personally view video content and these devices had effectively become an alternative to the old portable TV with the 12”-14” screen. The cable industry was also facing the reality of American households “cutting the cord” i.e. abandoning cable TV service and watching their video content either from free-to-air TV or online video services like Netflix and Hulu.
This has been aggravated through the availability of devices like multimedia-capable games consoles, Blu-Ray players and network video players that work as front-ends for the online video services.
In Australia, Foxtel woke up by providing IP-hosted pay-TV under the Foxtel Play / Foxtel Go banners where people just used particular games consoles, smart TVs, regular computers or mobile devices to watch Foxtel pay TV via the Internet.
Now Time Warner Cable have allowed a person who signs up to a “double-play” package of Internet and cable-TV with them to dispense with their set-top box if they use a Roku or XBox 360 to watch the TV content. This is starting to appear also as a trend amongst other US pay-TV firms and is overcoming various hurdles and requirements like closed-captioning, emergency alerts and “delay-to-the-gate” blackouts for sports broadcasts.
Here, these services may be offered as the “value option” for households who don’t need the PVR-capable set-top box whereas the PVR is offered for the packages with “all the fruit”. These packages would also integrate the IP-based functionality with, perhaps, support for network viewing of PVR-hosted content.
Personally, I would also see this evolve to other common platforms like the PlayStation 3 and the smart-TV / Blu-Ray-player platforms that the likes of Samsung, Sony and Panasonic are building up. It could end up as a chance for the cable industry to construct packages tariff charts and service options that exploit the capabilities of these IP-based setups.