TV CEOs say converged services aren’t there yet

Even as consumers are adopting high definition (HD) television and Bill Gates proclaims the digital decade has arrived, service providers of all kinds are split on what types of services consumers want and how they want to get them.

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Even as consumers are adopting high definition (HD) television and Bill Gates proclaims the digital decade has arrived, service providers of all kinds are split on what types of services consumers want and how they want to get them.

CEOs of some of the biggest cable, satellite and broadband operators discussed the future of video in the home – how it will get there and how users may share it within the home – during a session Monday at the International Consumer Electronics Show (CES). Service providers across the board need to improve on enabling converged services in the home, said Charlie Ergen, founder, chairman and CEO of EchoStar Communications . “We don’t do that well today, no one does,” he said.

Verizon Communications and others have a vision of allowing users to share content such as music and photos across devices including PCs and TVs and enable other converged services such as using a cell phone to programme a digital video recorder, said Virginia Ruesterholz, president of Verizon Telecom.

But so far the operators haven’t truly offered the benefits of delivering multiple services. “The triple- and quad-play has been about bundling one bill,” she said. “Where we think it’s going is more than the bundle and about experiencing content across different screens.”

Verizon has just begun to enable such capabilities through, for example, its Media Manager product. The offering allows its FiOS TV customers to view photos and listen to music stored on their computers on their TVs.

The service providers have an incentive to make sure that the in-home sharing process works well. “The challenge for us is how to provide something that is foolproof because when these devices get into the home, they’ll call my customer service line and we have to help them,” said Pat Esser, president of Cox Communications .

Delivering video over the internet is one of the many services that providers can offer but despite the buzz around such offerings, some of the service providers aren’t sure the technology makes sense. Simply because technology is available doesn’t mean it’s good for the consumer or the service provider, said Glen Britt, president and CEO of Time Warner Cable. He compared delivering video over the internet to some of the new cellular video services. Samsung Electronics and others are building phones that can receive the digital signals that broadcast television providers are starting to deliver. Yet other companies are building separate systems for cellular video. Britt wonders why they need to create a new system when one already exists.

Cox Communications’ Esser agreed that the case for video over internet isn’t completely clear yet. The existing cable systems efficiently already efficiently deliver video, he noted.

Verizon is interested in offering video over internet connections to deliver more choice for customers in how they receive their video content, said Ruesterholz.

She admitted that the plan to build out FiOS and deliver internet TV is a big risk, however. “It’s a huge bet for us,” Ruesterholz said. Verizon expects to spend around $18 billion (£9.3bn) over the next few years on the fiber network, which currently passes 6 million homes and should pass an additional 3m this year. She estimates that the company spends more than $1,500 per home on the network.

The executives also weren’t all on the same page regarding the demand for HD TV. Cox is adding 40,000 to 50,000 HD customers every month and currently 20 per cent of its customers receive HD TV, Esser said. Within three years, Cox expects that 70 per cent of its digital TV customers will have HD.

Verizon, DirecTV and Time Warner are also focused on meeting demand for HD, with DirecTV on track to offer 100 high definition channels this year.

But EchoStar is primarily focused on basic TV and continues to sell more basic TV service than advanced offerings, Ergen said.

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