Stay tuned ... for cable TV's new products

October 24, 2002|By MIKE HIMOWITZ

OFF TO ONE side of the massive, humming, "head-end" computer center in White Marsh where Comcast broadcasts its signal to 350,000 customers in the Baltimore suburbs, there's a small room lined with wall-to-wall monitors, set-top boxes and other gadgets that are the future of cable television.

In one corner, you can flick a remote control and download the latest headlines from the Internet, check out the movie schedule at the cineplex down the road or browse the menus at local restaurants, all on a regular television set - no computer necessary.

In another corner, there's a killer set-top cable box that automatically records your favorite shows on an 80-gigabyte hard drive and plays them back whenever you want. It also allows a picture-in-a-picture display on any set, so you can watch two shows simultaneously while it records a third. Unfortunately, it tends to crash and restart itself all too often.

Getting this stuff ready for prime time is the job of Tom Williams, an intense but affable engineer who serves as Comcast's director of technology here and runs the cable giant's new national testing lab for advanced technology.

"Basically, we take a lot of software and beat it to death to find out whether it works or not," Williams says. "There are a lot of applications that may work on one set top. The question is whether you can move it to 100,000 set tops."

These are critical questions at a critical juncture for the cable industry. On one hand, it finally has the infrastructure to deliver the interactive programming it has promised for years. At the same time, cable faces stiff competition from satellite TV and makers of computers and personal video recorders (PVRs).

Individually, they can already provide consumers with many of the advanced features they want most, including time-shifting - the ability to record programs now and play them later.

This year, Comcast rolled out its first interactive product, Video on Demand (VOD), which allows customers with digital cable service to order movies with their set-top boxes and play them whenever they like for a 24-hour period. Unlike pay-per-view, VOD lets viewers pause, rewind and play back a movie in progress.

The cable industry likes this model because it controls the content and the potential to charge customers for new services. In fact, the industry would like to extend VOD to its regular broadcast schedule on a subscription basis.

The benefits are obvious - another income stream for the cable company and flexibility for customers. If you like to watch the 6 o'clock news but don't get home 'til 7, all you have to do is flick your remote control when you arrive.

There are a couple of major hurdles, however. One is the broadcast and entertainment industries. They own the programming and want their piece of the action, too. They're also concerned with digital piracy, particularly of movies.

More troubling to some is that VOD gives viewers an easy way to zip through commercials.

"That's a big issue," Williams says. "The advertisers are hammering to get rid of that."

Unfortunately, that's one of the features viewers like best.

Comcast is testing VOD in Philadelphia with NBC's full broadcast schedule (programs are available for at least 24 hours after broadcast). But it may be a while before it's available on a wide scale.

The set-top video recorder is another business, one that the cable industry doesn't like as much for two reasons: It doesn't control the content, and it requires a new, expensive set-top box. Broadcasters also detest the gadgets (it's the commercial-skipping thing again).

Two such devices, TiVo and SonicBlue ReplayTV, are already available as third-party home theater components. But why mess with another component? It makes more sense to build a video recorder into the cable box itself.

Satellite TV providers are already selling hundreds of thousands of set-top receivers with built-in hard drives, so the cable industry can't ignore the technology.

After a successful test run, Time Warner Cable will offer set-top recording for an extra $5 to $10 a month in 18 markets by the end of the year. Comcast has no current plans to market the service, but doesn't rule it out.

"Ultimately, our customers will decide what we offer," says Brian Lynch, Comcast's new general manager in the Baltimore region.

Finally, on the new-product horizon, there's the Internet. Cable companies have provided high-speed Internet access years, but users must have a computer and be willing to pay an extra $50 a month or so for the privilege. Previous attempts to turn the TV set into a Web browser - including Microsoft's dial-up WebTV system - have met with massive indifference. But cable companies hope to have more luck with their high-speed access.

"Basically, we're taking what we call a `walled garden' approach," says Williams, demonstrating a system that retrieves information from the Web, such as news headlines, but reformats and displays it in a TV-friendly format. It won't be like browsing the Web, because Comcast will control the information customers can access. Presumably, Comcast will also get the revenue from advertising surrounding the information.

A few years ago, this might have been an interesting product, but it's hard to see anyone who has Web access paying extra to see a stripped-down version of the same thing on TV.

Although it expects to deploy the service within a year, Comcast hasn't set a firm rollout date or pricing for Internet-on-TV. For now, the service is too slow and clunky - partly the result of limited memory in the company's digital cable boxes.

But stay tuned.

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