Cable Companies Despise PVRs

sbombay writes "I just came back from Broadband Plus (formerly the Western Cable Show) and was disappointed to find that cable companies despise PVRs. In his keynote speech, Comcast CEO Brian Roberts said that the PVR amounts to 'the Napster of the future.' Cable World has a story about the speech and quotes from other cable execs bashing the PVR. The cable industry's opposition to the PVR boils down to two things -- PVRs help satellite companies (Dish and DirecTV) provide services like Video On Demand (VOD) and a PVR in a cable home cuts into VOD revenue. Any of the sessions at the show that touched the topic of PVRs were an opportunity for the cable industry to slam the PVR. The strongest attack came from Gary Lauder, a venture capitalist who has funded many cable related companies. During his 15-minute presentation, Lauder slammed his Replay box, 'it's too hot,' 'my wife doesn't know how to use it,' and he even tried to fry an egg on his PVR. He also openly called on the cable companies and Hollywood to sue the PVR companies for copyright infringement. If you love your PVR, the cable industry is not your friend." Update: 12/09 18:33 GMT by T : Gary Lauder wrote to say that this account misquotes and misinterprets his speech on certain points. Read below for his reaction. Gary Lauder writes: "I have 3 PVR's and love the functionality. My wife knows how to use it. The misquotation is that she did not know how to reboot it when it locked up. This was a piece of data in support of the following position:

My position that I expressed in my speech and that was inaccurately portrayed: PVR functionality should be provisioned from the headend for the following reasons (which ultimately will benefit consumers):

1. VOD servers cost much less
   • If video servers @ $350/stream (Soon Component cost declining 40%/year
   • @ 10% simultaneous use, costs $35/sub.
   • PVRs cost >10X more
   • When simultaneous use = 50%, server costs will have declined >5X
2. Disk noise wakes my wife
3. Replay box hot enough to fry an egg -- Is that a feature?
4. Disk size limitations mean obsolescence, esp. with HDTV
5. Available on every set-top in house Average of 1.7 PVRs/PVR household
6. No pro-activity/anticipation required
7. Records multiple concurrent shows
8. NW storage could always have max. res.
9. Uses existing deployed base
10. Moving parts break more often
11. Box complexity means more crashes & customer support costs

My basic thesis is that PVRs + Satellite will eat cable's lunch, and since it's unambiguous that cable needs to get the copyright clearances to offer programming from the head-end, they should start now. It is the case that I suggested that if a Supreme Court case was brought on the legality of each feature of PVRs were brought, some would lose. I also suggested an alternative business model to make everybody happy to avoid the all-or-nothing result that has been occurring in the RIAA vs. Napster wars.

I suggested that consumers pay 1 cent per commercial skipped (which is about the same as what advertisers pay). That would be equivalent to $10/thousand commercials skipped. I think that's reasonable. I also suggested that targeted advertising could be a win-win for all involved by delivering ads in areas that are of greater interest to the viewer so that there would be less incentive to skip and fewer ads would have to be delivered due to the higher prices paid for the targeted group. I also predicted that this dynamic combined with competition between satellite and cable would ultimately make both services free."

Comments

Re:bullshit

[tmhsiao]

Because AT&T Broadband, despite all of their insipid customer service issues, doesn't have the paradigm block that Comcast apparently has. Either that or they recognize that despite objections, PVRs and PVR technology is the way consumers will want to view television in the future.

The other issue is cable companies losing the ability to sell/rent their own crappy boxes to their customers. Their revenue stream from these boxes can be two-fold--ads and sales/rentals.

I know that when I visit my parents in Miami, and use their shitty digital cable receiver box, I get big ads and huge banners which obscure the picture on the television. If my parents didn't live where the HOA frowned upon it, I'd tell them to get DirecTV.

Time Warner Cable seems to have a different view

[proxima]

I don't think every cable company hates PVRs. In fact, Time Warner Cable is rolling out their own PVR, called iControl. It has basic PVR functionality, but it's main purpose for the cable company is pushing on-demand movings that you can pause, etc. as if you rented it.

Ironic that Time Warner Cable would do this, as it's part of the much larger AOL Time Warner which seems torn between the content provider and the content producer mode - the company owns lots of record companies and movie studios. Yet AOL and Time Warner Cable seem to be doing things the content part of the company doesn't like. It's like watching Sony make mp3 players and yet be distributing copy-restricted CDs.

Re:bullshit

[Anonymous Coward]

HOA have no legal right to prevent you from installing a small dish if you own the property. Now there are a few other limiting factors, like having a mounting location with a clear line of sight to the satellite, but an HOA by law is not allowed to prevent this.

"Satellite Consumer Bill of Rights, a regulation released by the FCC on August 6, 1996. This regulation PREEMPTS area zoning ordinances and Homeowner Association covenants and restrictions on DBS dish antennas. This rule was required by Congress in the 1996 Telecommunications Act."

Link to FCC fact sheet about this subject.
FCC Fact Sheet

Re:Video On Demand?

[wunderhorn1]

So what the hell is VOD anyway? This is the first I've ever heard of it. Is it just pay per view under a different name? Rebranded so to speak?

And if so... do they REALLY think we're that stupid?

I happen to have worked in the cable industry. Video on Demand, or VOD, is a sort of "instant" Pay Per View (PPV), or more accurately DVD rental without having to go to the store.

Rather than calling the cable company and telling them you want to watch Movie X when it comes on at 12:00pm, you press a button your cable remote and the movie is streamed instantly to your cable box. You can pause, stop, rewind, or fast-forward, and you get a certain time window (48hrs or something) within which you can watch your selection as many times as you want.

The cable office has racks of servers packed full of disk space and bandwidth that can singlecast video streams to hundreds of subscribers. Companies are currently working on getting all the DVD functions like different audio streams and camera angles as well as special features into the VOD package, and the eventual goal is to make Blockbuster obsolete.

So it's more than PPV rebranded, but I'd guess they still think you're pretty stupid.

Re:bullshit

[Phillip Birmingham]

"If my parents didn't live where the HOA frowned upon it, I'd tell them to get DirecTV."

Tell them anyway. The FCC has ruled that homeowners' associations cannot stop people from installing satellite dishes of 1 m diameter or less (among other things, like wireless broadband antennae.)

AT&T, Comcast

[wytcld]

AT&T Broadband was acquired by Comcast in what was essentially a hostile takeover. AT&T had been considering spinning of the Broadband division, but decided not to. Comcast put together an offer that the AT&T board, under pressure from shareholders, felt they could not afford to refuse. Comcast as a result become by far the largest cable co, with a near monopoly on the East Coast (aside from NYC). Much of AT&T Broadband's staff is about to be fired, btw. Comcast wanted the customers, not the employees. They have no reason to embrace AT&T's attitude towards PVR; they'll be happy to scuttle it.

Some thoughts (from Planet Replay).

[Tide]

I've been recently composing some thoughts for an upcoming article. This is merely a rough drafts, but pertinent to the subject at hand. A few snippets:

Many people say these lawsuits fall somewhere between the Sony Betamax case and the more recent Napster cases. In the Betamax case, media companies sued Sony over the recording features in the newly released betamax. The court found that while copyright violations were possible with the Betamax (just as they are possible with typewriters and copy machines) that the "fair use" of the machine greatly outweighed it. There are many legitimate uses for recording shows from PBS, religious stations, and whether copying was not objectionable to the copyright holder.

With the success of the VCR in this case, a tradition has clearly been establish of time-shifting a show for later viewing. This tradition extends to lending of time-shifted shows to other individuals. The technology behind SonicBlue's show sharing ReplayTV is very similar. You record a show, then when its over, you can send it to up to 15 friends (whom cannot resend that same show). The media is left in tact, commercials and all, just as it is with a VCR tape. Furthermore, since this tradition is well over 25 years old, no evidence has surfaced that these methods of time-shifting cause little to no negative impact on the plaintiff's business. It is my opinion that time-shifting only expands viewership of shows.

The main complaint over show sharing is this: The ReplayTV allows users to share shows they've recorded to other ReplayTV owners, possilby allowing people who have not paid for premium channels to watch premium content for free. But are they? Does anyone know if this is what people are using the device for? If I missed premium content I already pay for due to a power outage, am I not allowed to receive that content from another ReplayTV owner? Certainly that seems like fair use. The TV studios tried to find out exactly how much of their content was being traded and had their court order overturned. But someone certainly must know if people are sharing, and if so how much. Well, I do.

Enter Planet Replay. Planet Replay is an internet hub for ReplayTV enthusiasts created around the launch of the ReplayTV 4000. It is a place for Replay owners to discuss various topics involving the ReplayTV and find shows to borrow from other members. In show sharing Planet Replay is simply a directory of recorded material along with a directory of Replay owners. It tries to simply some of the work of sharing shows by matching users. All shows are shared between users and not through Planet Replay. It is up to both end users if they want to send the show to the other person, and do so via email contact. So just what do I track?

Sometime over the summer (not really sure when), Planet Replay introduced ratings system. The idea was simple, allow users to rate each other over the helpfulness of the person sharing the show. It would in theory help spur sharing on... but it didn't. Planet Replay even sends the requesting users ranks along with the request email, hoping to help further sharing. User rankings were so poor during the first 2 months, we were for to lower expectations of the system and the stars accordingly. Even as the owner of Planet Replay, I have sent maybe 20-30 shows. So just what are the real numbers?

After I received the subpeona, I ran statistics on the ranking system. A rank of 5 typically means the show was successfully transferred. In the first two months I started the system, there were an average of 10-20 a week claiming successful transfer. Out of 400-500 users thats really small. Last week (Nov 26th) there were 78 transfers for 670 requests and 1234 users. One week later 58 transfers for 1293 users and 770 requests. The request system tracks only that a request was made and the following rank, which lives for a week in our database. Why so many requests and so little transfers?

I missed the season opener of a show called "Firefly". I really wanted to see it. The S.F. Giants though were still being televised and shifted the show beyond what my Replay was set to record. And I really wanted to see it. I then went to Planet Replay and sent out 5 requests for it from various people. None came in after 2 days. I finally found someone to send it to me. Myself, like most users, have unforeseen circumstances where we'll miss a show... a baseball game runs late... the power goes out... scheduling conflict... ect. In an attempt to receive that show, we'll place multiple requests. Still even that number seems low. Why aren't people sharing?

Why should we share? We already own a Digital PVR. Perfectly programmed to record every single episode of Buffy the Vampire Slayer that even shows on any channel. Why would I need to borrow it from someone else? Well the circumstances above show us why. Given the numbers, ~60 shares for 1200 users a week, that would point us at the average Planet Replay user shares 1 show every 5 months. Wow. Compared to the number of ReplayTVs on the market with the ability to share, that number would be even smaller. Why else is that number so low?

Television shows are not music. This isn't Napster. I'm not going to download all the Buffy's I can and watch them in the car, on the plane, at the gym, in my iPod. TV shows are one-time viewings. Maybe two times for Buffy. This is why Blockbuster is so popular. People simply want to view video once, where as music is repeatable. Not only that, but the files are way bigger. The average one hour show can take around 2 days (yes 2 days) to transfer. That's a long time to wait for Buffy. I might as well just drive over to a friends house and borrow a VHS tape, it would be simpler and faster.