In a filing yesterday with the FCC on the current status on CableCARD deployments the NCTA revealed that there have been a total of over 374,000 CableCARDs deployed for use in Unidirectional Digital Cable Products (UDCPs), such as the TiVo HD, by the ten largest cable MSOs, which cover roughly 90% of US cable subscribers. That may sound like a lot, but in their last filing 90 days ago in June, they reported over 372,000 CableCARDs for the same ten MSOs and 90% subscriber base. That implies that only 2,000 CableCARDs have been deployed to UDCPs in the past three months by the top 10 cable MSOs – combined. That’s nothing. It would also make me wonder a bit about the sales of the TiVo HD, since I’d expect nearly all of those to have at least one M-Card CableCARD.
That is, of course, if the numbers are true – and they may not be. See the table below and especially the first footnote1. Comcast’s numbers for September are estimated to be 10-15% lower than actual due to an internal error. We could be looking at an increase of more than 34,000 users instead of only 2,000!
While 34,000 would certainly be better than 2,000, it still isn’t really setting the world on fire. Maybe the M-Card is a ray of hope in those numbers – if customers who previously used two S-Cards are trading them in for a single M-Card on devices like the TiVo HD, it would result in a lower cumulative number. Still, I don’t expect that’s a huge number either.
This is not to say that the total number of CableCARDs in use is that small, not at all. Since the FCC’s ‘integration ban’ went into effect on July 1, 2007, forcing cable MSOs to begin using CableCARDs in their own STBs, those same ten MSOs have deployed over 7,800,000 CableCARDs in their STBs. So in less than fifteen months they’ve deployed more than twenty times the number of CableCARDs as have been issued for 3rd party UDCPs in the four years they’ve been available.
The integration ban was supposed to force cable MSOs to ‘eat their own dog food’ and thereby improve support for CableCARDs. The idea was that this would help foster the overall CableCARD market. Better support from MSOs would lead to more products, which would mean more 3rd party UDCPs in the field. For the most part, this hasn’t happened.
Why not? Well, I think I can sum it up in one brand name: tru2way. Starting late last year, and getting an official launch at CES in January, OCAP became tru2way and marked a push to get consumer electronics companies on board. Then starting with Samsung in May, followed by a larger push by Sony later that month, CE vendors started jumping on the tru2way bandwagon.
What does this have to do with slow CableCARD adoption? Well, these same CE vendors have held off on releasing UDCPs while they work on tru2way-enabled devices. Why invest in developing and marketing a unidirectional product when you’re going to obsolete it with a two-way product in a year? The first tru2way products are starting to trickle out, and there will probably be a bunch of them on display at CES in January. So I think the push for tru2way was a major contributor to lax CableCARD pick up. Vendors just haven’t been releasing CableCARD-enabled products so there aren’t many options for consumers, which naturally means not many cards are being deployed. Really the only major CableCARD product out there right now is TiVo. CableCARD TVs are thin on the ground. CableCARD-enabled Media Center PCs have had anemic sales. And Digeo outright canceled their Moxi CableCARD HD DVR.
CableCARD was slow out of the gate, and by the time MSOs had the infrastructure worked out vendors were already looking toward round two with tru2way and they just decided to sit round one with UDCPs out entirely. The deployment of SDV and the need to develop a Tuning Adapter, and to support it, was very likely a factor in that as well. I don’t expect to see any real pick-up in CableCARD utilization until a sufficient number of tru2way devices are available to consumers, and then I do expect to see a real uptick.
The filing also has information from several MSOs on their CableCARD pricing and install practices. To compare June to September:
| June Subs | Sept. Subs | Truck Roll | Avg. Truck Rolls | Avg. CC Fee | Avg. Install Fee | |
|---|---|---|---|---|---|---|
| Cablevision | 16,239 | 16,475 | Yes | 1.1 | $2.00 | $46.95 |
| Charter | 27,795 | 28,208 | Yes | 1.1 | $1.50 | $32.00 |
| Comcast | 218,551 | 217,1681 | No2 | 1.06 | $0.00 / $1.773 | $10.43 / $25.144 |
| Cox | 24,274 | 24,496 | Yes | 1.1 | $1.99 | $24.00 |
| Time Warner | 57,404 | 59.962 | Yes5 | 1.25 | $2.266 | $23.75 |
1Comcast states that their September number may by low by 10-15% due to internal reporting errors.
The count for this reporting period of CableCARDs installed in one way retail devices in active customer homes is estimated to be 10-15% lower than the actual number due to internal Comcast reporting errors that are the result of an internal Division reorganization during the reporting period. The next quarterly report will more accurately reflect the actual count.
Since Comcast has such a large installed base this could be the reason for the seemingly small total uptick. The other four combined yield an increase of 3,429. Comcast’s apparent drop of 1,383 drags it down. But if they’re short just 10% they would actually have an increase of 20,334 users. And 15% would mean an increase of 31,192! So we’d be looking at a total increase of 23,763 to 34,621 – rather more than around 2,000. And that’s just from these five MSOs.
2Comcast allows self-installs in at least some areas – 68% used truck rolls, 32% were self-installs.
3First card is free, fee for additional cards.
4$10.43 if install is included with other services, $25.14 if purpose visit.
50.2% of Time Warner installs are self-install, which is negligible.
6The average is $2.26, but they report most divisions are $1.75 – which must mean the remaining divisions are rather higher to bring the average up.
