Brain Power Multiplied
Content protection, evolving business models, technology hurdles and an ill-informed customer base are impeding the progress of the multi-room DVR and the technologies that will connect a host of devices in the home.
Those impediments may be short-lived, however. Inspired by an on-demand market expected to top $6 billion in customer orders, and with 31 percent of current digital customers expressing "strong willingness" to pay for DVRs as a monthly service, along with 15 million to 37 million homes predicted to have DVRs by next year, a Forrester Research report reveals, multi-room technology is getting the attention of service providers and their supporting cast of vendors.
On-demand viewing is also expected to expand from 3.5 percent of all viewing today to 28 percent in 2007, with viewers also increasingly watching TV shows recorded on their hard drives. Although multi-room connectivity isn't a new concept, an explosion of new devices and the advanced technologies they carry are lifting the multi-room concept higher on service providers' radar screens.
"People are used to getting content on more than one TV. But now, they want HD, DVRs and other types of content with every TV, in every room. And for service providers, more homes with more boxes creates more revenue," says Bruce Leichtman, principal analyst for Leichtman Research Group (LRG).
Yet more boxes also create more costs, an element that the multi-room model is attempting to reduce. "Getting the right equipment and making it profitable is a challenge. As multi-HD homes multiply, they need HD boxes. You don't want expensive boxes on every set, so a server client makes more cost sense," Leichtman says.
Digeo’s multi-room set-up enlists a primary media
center that feeds into smaller, less expensive boxes.
"Our goal is get to a communications technology that's not proprietary, like MoCA (Multimedia over Coax Alliance) [technology] and DOCSIS. Those are more appealing and address the challenges of transferring technology throughout the house. We're finding that a simple DVR box may not fill a customer's needs," says Doug VanCura, senior director of video engineering for Charter Communications.
Charter also found that testing the technology in a controlled environment is mandatory. "We highly recommend lab testing the technology under user criteria to stress the box to the max, because lots of customers have questions about interface and guide products. The multi-room DVR is not a product with a huge technical stretch, but the information should be very clear on how it's installed and how to troubleshoot. Once the technology is better understood, usage will grow," VanCura maintains.
Growing multi-room DVR and technology usage is becoming the new mantra for companies such as Pace Micro Technology, whose dual-tuner "Tahoe" HD-DVR box is being touted as a "basic building block for multi-room DVR technology," says Chris Dinallo, Pace's vice president of technology.
"The Tahoe platform will allow the physical connectivity between set-tops and coax—a physical connectivity point that ties into IP-based coax networks. It's open standard technology and gives operators flexibility, and ties in with Pace's 'Chicago' all-digital STB. We don't want to build a proprietary solution. That sends the wrong message to operators," Dinallo says.
Cox Communications, meanwhile, expects to learn a bit more about the single-box DVR and its effect on customers before shifting to the next level.
"Multi-room DVR and technologies are important. Customers want access to content anytime, anywhere. But we also think there is a learning curve. They first have to understand a single DVR, then we'll see the value-add of multi-DVRs and accessing video, photos and files on other devices. We want to get there," says Lisa Pickelsimer, Cox's director of video product development.
Getting there for Cox means trials and challenges, however. Content protection, expensive set-tops, cost-efficiencies and in-home integration issues are just a few of the hurdles.
"We trialed a multi-room viewing product with DVR capabilities, but [which] couldn't pause live TV or delete recordings," from the satellite boxes that feed into the primary box, Pickelsimer explains. "It was a limited feature product and the results were mixed. We learned we had to provide our customers with new DVR set-top-boxes because they lost content on the original box. Having a way to transfer content from one box to another with full DVR capability is very important. We're working with Motorola to trial a new multi-room viewing product in one of (our) markets this year," she adds.One box/one house
Motorola recently rolled out its line of "QIP" set-tops, which include support for MoCA. On the high end, QIP6416 is an HD-capable, dual-tuner DVR with watch-and-record capability. Also in that family is a single-HD tuner set-top, and a single-tuner standard-definition model. Verizon Communications is among the first customers for the new box.
From a cost-efficiency perspective, the one box/one house concept is high on Cox's multi-room technology agenda. Concludes Pickelsimer: "Our set-top boxes are significantly more expensive, so if we can have just one box in the home and provide DVR access, that helps us from a capital expenditure perspective. And 20 percent of our customers say they have an interest in multi-room DVRs, so we think there's something there."
Moxi’s on-screen information is a key part of its
multi-room/DVR media center product.
"The second-generation Moxi Media Center will be able to support up to four TVs and is being developed, and the PC Link will allow customers to access photos, music and more off their PCs. Cable has benefitted from DVRs and more rooms in the home are entering the equation. We are leveraging the existing coax wire in the home," says Bert Kolde, senior vice president of sales and marketing for Digeo.
The multi-room DVR equation for S-A includes exploring technologies such as MoCA as well as wireless distribution. With its pending acquisition by Cisco Systems, which operates home networking gear specialist Linksys, Scientific-Altlanta appears geared to become a key player in the connected home arena.
"There are lots of opportunities in this space for us and interest in content protection is high, so our PowerKey encryption, which can encrypt content from multi-room DVRs and other content within the home, is generating more interest. Content must be protected outside the trusted domain space, and that is a challenge," says Dave Davies, vice president of strategy and product marketing for Scientific-Atlanta.
And it's a big issue for service providers entering the multi-room DVR sector. "It's a real concern," Pickelsimer acknowledges. "We're a trusted partner for content providers and distribute content to our customers. We don't want to jeopardize those relationships and must keep content secure."
One possible solution may be NDS America's XSpace. The hybrid STB enables consumers to connect to both broadcast and Internet content via their televisions. "The trend is toward more interactivity, gaming, photo and video sharing and personal applications," says Dr. Dov Rubin, vice president and general manager of NDS Americas.
Yet for Rubin and others playing in the multi-room DVR and technology area, content protection remains a sticking point. "The foundation is security. We want to watch content on another device, not just in another room, so we're looking one step beyond multi-room and proposing an alliance to move beyond multi-room set-ups to include devices." In this case, he's talking about NDS' Security Video Process Alliance (SVP).Keep it simple
Aptiv Digital’s Passport Echo IPG supports multi-room
DVR functions on the Motorola and S-A
"People want easy, not cool, technology," says Patrick Knorr, general manager of Lawrence, Kan.-based Sunflower Broadband, which has deployed the Digeo platform. "They don't innately record from room-to-room. But that's changing once they know they can do it. If the prices drop for multi-room DVRs, they'll become more ubiquitous. And when automation and boxes tie together, it will be a compelling product."
It was the customers, Knorr adds, that drove the company's multi-room DVR strategy. "We went in on the high end with HD-DVRs because they wanted to record HD content. The problem was they couldn't access HD content from both rooms. So, we're offering upgrades for $5 to access a second box in a second room. For us, it's a high price point for a DVR offering at $19.95, but the boxes are expensive. It's hard to justify the business model, but new solutions are coming to market fast," Knorr says.
For multi-room DVRs and their related technologies and devices to endear themselves to customers, however, they must be simplified, insists Dan Ward, vice president of sales and marketing for Aptiv Digital Inc., a maker of set-top software and applications.
"Multi-room technology is pretty complicated. S-A took a different route than Motorola with its architecture, using multiple set-tops, while Motorola is more of an IP network based on a real home network solution with MoCA. Our multi-room approach is with Passport Echo, which can work with both, in what is becoming a very significant business—multi-room DVRs and in-home connectivity. It's now whole-house," Ward adds.
And it needs to resonate with the common denominator. "Early adopters understand the multi-room concept. They want it to work, [be] reliable and simple," Davies adds. "We can get ahead of ourselves technologically, so we must make it easy and simple for customers, particularly as they become more mobile and begin taking DVR-recorded programming with them."
The simplicity factor is not lost on the service provider's side. Installing multi-room DVRs and understanding the many nuances associated with in-home wiring are serious speed bumps to deploying and maintaining multi-room set-ups.
"What's most difficult is for us to train field staff and customers in using multi-room DVRs and technologies," says Charter's VanCura. "It's not a traditional install, so trying to communicate to our field staff the quality of wiring, splitter locations and wires all adds to the complexity and easily sets you up for a high number of tickets. And, how do we keep the customers from altering their wires? We're comfortable with the technology, as long as we're trained to deploy [it]."
As for smaller operators such as Sunflower, multi-room DVRs represent just one step toward the whole-home entertainment system. Adds Knorr: "The technology is moving very fast, with many choices being offered to customers to get content when and where they want it. The multi-room set up is a small piece of the puzzle, but getting bigger. We're optimistic for multi-room technologies and DVRs and will move forward with next-gen technologies hopefully this year."
Cox, Pickelsimer says, will hold back on its deployment of multi-room DVRs until it figures out its integration and functionality issues. "We're running into technical hurdles integrating multi-room DVR functionality with our initiative of OCAP/OpenCable. So, we've elected to hold back on deployment of multi-room DVR until we figure out those issues. But we want to provide products that cross our silo line."The glue and the revenue
Once the questions of content protection, training, integration and consumer acceptability are answered, the multi-room DVR space is expected to take off. How soon those myriad questions will get answered remains up in the air. Once they are answered, the resulting technology should pay some solid dividends for cable operators that are looking for new ways to gain and retain customers.
Concludes Leichtman: "The core of the multi-room technology will help [provide] super service [to] cable's most valuable customers and reduce churn, and not just as an upgrade, but for people who love TV and are willing to spend on it. It will be the glue and the revenue."