As the new CEO of OpenTV, Jim Chiddix certainly gives the set-top software mainstay a healthy dose of credibility in the cable operator realm. After all, cable engineers tend to listen to someone who was the long-time Chief Technology Officer of Time Warner Cable and, more recently, the man behind the curtain at the ultra-secretive MystroTV project.
CED: Why OpenTV and why now?
Chiddix: I think that OpenTV is a fascinating company. It got into interactive television very early in international markets and with EchoStar as well. It's on over 40 million boxes all over the world–both cable and satellite boxes. It's there where scale really matters.
The interactive TV market has taken off faster in some geographies than others, but I think there are a couple of forces out there that really are going to accelerate the whole thing. One is the move to digital around the world by cable and satellite and the digital boxes that are going out there are much more capable of supporting interesting interactivity than the analog boxes that preceded them. Another thing that's going on is rapidly ratcheting up competition between satellite and cable companies, and in a number of markets we're beginning to see some very interesting competitive moves with video-over-DSL.
The poster child for all of this is what has happened in the U.K. where BSkyB rolled out all-digital quite rapidly using an innovative business model. They packaged interactive services with their offering pretty much at the outset of their digital launch–and that's despite the fact that they had some limitations by comparison with their cable competitors. They had to use a dial-up return, but they were able to craft an interesting business around that and they generate significant revenue. The conventional wisdom is: Well, that's nice and that's all about gambling, and, indeed, gambling is a significant component of that. But there are a lot of other things going on there, too, that generate revenue.
CED: Such as?
Chiddix: Commerce and games, primarily. They've got several competing game providers authoring interactive games, including the subsidiary of ours called PlayJam. But there are several different game venues at BSkyB. That drives innovation and competition between the interactive developers. Of course, BSkyB shares the revenue of all of these game providers.
In the U.K. it's interesting that the phrase "The Red Button" has gained local currency. Everybody knows that's the button you push on the remote control for BSkyB interactive services.
One of the things that's really critical to interactivity is having a really stable, tested software platform and having economies of scale. OpenTV has deployed its middleware and its tools and its other support technologies across such a large base and has done it over a number of years. That gives it unique advantages as opposed to someone coming out today with a relatively untested platform, and I think there are significant risks for cable operators that deploy software that is not very stable. No network operator–whether it's cable or satellite–wants to see their system crash and hundreds of thousands or even millions of customers having service disruptions.
CED: When one looks to the U.S., OpenTV certainly has more activity with DBS than with cable operators. What's OpenTV's domestic strategy and how do you hope to change things here?
Chiddix: Clearly, I would vehemently differ from folks who characterize OpenTV as a technology for satellite. It's definitely not that. It is a software platform developed initially for small footprint boxes like those that the cable industry has deployed by the tens of millions. It has the mechanisms in place...to take advantage of cable's full-time, two-way nature. The cable industry is facing a variety of choices here in the future both with its legacy boxes and with newer generations of boxes. The OCAP (OpenCable Application Platform) and two-way Plug & Play strategies are important things, and I think that OpenTV has a lot to offer. What I'm trying to do is initiate the kinds of dialogue between OpenTV and the cable industry about ways that that might work out to the industry's benefit.
CED: This year's National Show was marked by the formal introduction of an OCAP OnRamp strategy and the creation of software to help operators migrate to the full OCAP stack. Does OpenTV have an OnRamp product specifically for that initiative?
Chiddix: The answer is yes, if that's what the industry wants. OpenTV, because of its maturity and stability, could offer the industry a much more concrete path to OCAP. That would require the industry to make a conscious decision to incorporate some elements of OpenTV into at least the OnRamp, if not into OCAP itself. We're very open to exploring that, but again it's early. Surely, at the [National Show] there were demonstrations of OnRamp and OCAP implementations...I'm not certain it's at a point that it's something you'd want to unleash on your subscriber base.
CED: Here in the U.S., what are the trends you see developing with iTV? Are there a lot of plans for iTV this year and looking to deploy next year, or is it more accelerated?
Chiddix: At this point there's primarily interest, but I think it's notable that the industry seems to be kind of fragmented with different companies doing different things. I think that it would benefit the industry to really pull together around a more concrete strategy. The industry has never been great at doing that, but I think in the face of the kind of powerful national competition that's coming from DirecTV and EchoStar and then the opportunistic competition that may come from video-over-DSL…it really behooves the industry to unite around something.
CED: Do you mean something besides OCAP, which is not out there today?
Chiddix: First of all, with OCAP there's a lot of work left. Second of all, OCAP was never intended to run on today's set-top boxes. In terms of a rapid response or a preemptive competitive move, I think the legacy boxes have to be looked at.