There’s a lot of bad news on the retail set-top front. According to the NCTA, the number of retail CableCARD devices deployed has dropped to 600,000 from 603,000 since August. No big surprise. Despite a few flickers of life, the retail CableCARD market has been on a path of decline for years. But then there’s also the news that Intel has gone belly up with its OnCue set-top plans, and even Amazon is delayed with its Kindle-branded set-top, that was supposed to go to market before year end.
Do future retail DVRs have a shot?
Well, actually, yes. The biggest success stories for retail set-tops are game consoles and basic media extenders like Apple TV and Roku. Where the CE guys get into trouble is when they try to muscle in on the TV service space. Between content licensing difficulties and the power that existing cable/telco/satellite TV providers have already amassed, it’s a difficult market for rookie competitors.
Instead, CE players have two options. They can try to bundle new features with over-the-air television – a la Simple.TV, the new Tablo, and Aereo – or they can work with service providers. Pay-TV companies were uninterested in partnering with CE manufacturers just a few short years ago, but times have changed. Time Warner Cable is porting its app to almost any device that will take it, and Comcast and Verizon are likewise showing up on select TVs and game consoles.
There’s also new activity in the downloadable security market. Charter has begun working with a CE company to make its traditional TV services available on retail devices without the need for a CableCARD. The effort is Charter’s way of making good on the conditions of a waiver it received from the FCC to avoid supporting CableCARD technology for an extra two years. The company recently submitted a statement to the FCC saying good faith negotiations with a CE partner are already underway.
It’s possible that Amazon, or Apple, or Google could in the future challenge traditional pay-TV providers. However, hopefully we won’t have to wait for that day to see some more set-top – and specifically DVR – options at retail. There are signs of hope.
Signs of hope? Who else wants to enter the retail dvr market?
“There’s a lot of bad news on the retail set-top front. According to the NCTA, the number of retail CableCARD devices deployed has dropped to 600,000 from 603,000 since August. No big surprise.”
Very weird spin, to my ears, Mari.
Cable subs are flat. Retail DVR’s are flat. (And, of course, we can never trust the NCTA numbers on this count, this they don’t include FIOS, which likely has somewhat higher retail CableCARD penetration. In fact, if we go just by the NCTA numbers, which show declining cable subs, we’d conclude that Retail DVR percentages are slightly on the increase.)
So, how is this bad news, as opposed to no news?
I published my take on the NCTA report here –> http://investordiscussionboard.com/boards/tivo/ncta-q3-update-cablecard-deployment-net-3000-retail-loss-top-9-msos
Comcast continues to share more detail than the other 4 MSOs and new CableCARD installs were a healthy 13,578 even though Comcast lost a large number of video subs during the quarter.
I view a flat q/q as neutral to positive for TiVo since the new Roamio/Mini solution requires only one CableCARD per household as opposed to multiple CableCARDs before TiVo had a MultiRoom solution available.
The other interesting trend highlighted in my post is while the top 5 MSOs lost (9,746) subs the next 4 MSOs added approximately 7,000 subs during the quarter.
Regarding Chucky’s comment about the accuracy of NCTA metrics, I would agree with him in the past but I think there has been some attention recently on this subject and I think the data is now correct. Comcast corrected their metrics multiple times in the past few years.
Isn’t there supposed to be a downloadable security system in place by mid 2014? It was due in Dec 2012 but the FCC issued a postponement for 18 months.
Ok so I just got a Roamio plus a mini and just retired a original Series 3 and returned 2 cable cards.
Here are some facts that are always forgotten:
1) Cablecard technology was originally envisioned as a way for customers to avoid high “converter box” rental fees while allowing cable companies to keep their signals secure from theft. The idea was that you would be able to buy you own cable box from your local radio shack,and get cable card from your cable provider. That never happened, because the manufacturers of cable boxes are “persuaded” by the cable companies (the purchaser of millions of boxes) not to sell to average consumers. And if you pay your cable company’s the replacement fee for a “lost” cable box and then you “find” it, you cannot activate your now-owned equipment on their system because of some BS corporate “policy”.
2) A cablecard and a cable box are two separate pieces of equipment with different upgrade cycles and lifecycles. It is feasible that a cable card pulled out of an older cablebox is now in use inside a customer’s tivo. Cable companies are reporting usage data with no independent third party verification. I don’t believe these numbers can be accurate, as making cablecard look like a failure lets cable companies push for cheaper integrated-security boxes, which will of course be offered at the same high price to customers.
Cable companies are shedding video customers. Where are the +/- change numbers for operator-supplied STBs? Are they counting their idle inventory as “deployed”?
Well I know on FiOS I used to have eight cable cards from them a few years ago. Now I’m down to only one cable card with a six tuner Roamio Pro and a couple of Minis. Plus one TiVo became OTA only too. So just from the fact that cable card devices have more tuners now than ever before would produce a decrease in cable card numbers if people change from two tuner DVRs to higher count tuner DVRs with client boxes.
Frank, some of us (including TiVo) have been in touch with the FCC and the NCTA. The numbers are more accurate now than ever… And I’d say it is unlikely that CableCARDs are being pulled out of a cableco-provided box and put into a TiVo. Those cards are not managed independently…
I agree with Sam, Patrick, and aaronwt that at some point the move from multiple DVRs to to a hub-spoke model with extenders may start to change the meaningfulness of the count. Perhaps it already has. Having said that, 600k retail DVRs households (mostly TiVo, some Media Center and other) is still a small number. How many Rokus or Apple TVs or gaming consoles or cableco DVR are in service at any given time?
Its probably worth noting that a high percentage of those 600k retail boxes deployed with the top 9 MSOs are TiVo and identical TiVo boxes with CableCARD are deployed in the high six figures with many different MSOs in the US including Suddenlink, RCN, Grande, Cable ONE, Atlantic Broadband, GCI, Mediacom, Midcontinent, and to smaller operators via Evolution Digital. If we look at the 95 million or so TV households in the US, TiVo has about 2% penetration.
Not sure this fits in the discussion here, but I was (again) pleasantly surprised how well the WatchESPN app works on the AppleTV. No fading in and out from SD to HD, or pixelation, not stuttering, etc. Let’s hope that gets expanded on.
No, you can be VERY certain. It doesn’t fit at all.
Yeah, watchESPN doesn’t fit. And Sam’s breakdown of non-retail TiVo’s aren’t so relevant to the post either. But I’m feeling pretty chill today. I do intend to check out watchESPN on my Roku tonight to see how it fares. Suppose I could do a side-by-side of aTV & Roku for comparison.
“Having said that, 600k retail DVRs households (mostly TiVo, some Media Center and other) is still a small number.”
Sure. But again, with cable subs flat, it doesn’t fit in with the “path of decline” narrative…
The LA Times is saying that Cable lost 687K subs and that satellite and telephone (Verizon) picked up 574K — a net loss of 113K subs last quarter.
A loss of cablecard users just stands to reason in that case… Cablecards have issues; they were never great to begin with, but I don’t think last quarter says anything specific about them in particular.
http://www.latimes.com/entertainment/envelope/cotown/la-et-ct-cord-cutting-continues-companies-lose-113k-customers-20131112,0,878536.story#axzz2kSYnOjff
There are a couple of factors here. The first is Patents. Tivo has a number of DVR specific patents locked up for the next few years (till 2016 IIRC). Those patents make it difficult for any small players to enter the DVR space. They will need to either do something completely different to bypass the patents or pay licensing fees to TiVo. Neither option is easy for a smaller company to do.
The other issue is cost. The total cost of the retail DVR (hardware + subscription) is simply too much. Compared to $10-$20/month (or even free on promotion) from your cable provider and its just not attractive to end users. Due to this, many of hte larger CE manufacturers would prefer to sell to the Cable Companies then direct to consumer. Higher profits and guaranteed sales.
I have five EchoStar DTVPal DVRs in my house. We have a Simple.TV DVR as well. It’s been 2 1/2 years since I bought a DTVPal, so my corner of the retail DVR market is probably not in your count.
I’m in no hurry to replace my DTVPals, but I’m very interested in EchoStar’s K77.
The growth in the retail DVR market will come with the growth in OTT and OTA, It will come at the expense of the cable/satellite companies and Tivo.
It’s starting to happen, but the industry is so fragmented and proprietary that no one can cobble together a comprehensive solution — except, maybe Tivo ;-)
If I could put a box on top of my tv that would record OTA and streamed (a la PlayLater), that would be nice. If a bunch of these collaborates so that I could pool tuners and aggregate content, even better. Remote access, too.
I would love to see EchoStar buy MediaMall and put it all together. When that happens, you will have a robust retail DVR market.