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Two-way battle over; cable wins

Sony_logo After a couple of years playing hard to get, Sony got into bed with the cable industry Tuesday and embraced CableLabs' tru2way standard for interactive-cable-ready devices. That makes at least six four major consumer electronics manufacturers who have signed onto the CableLabs standard for two-way plug-and-play (and, more important, the license agreement that so many CE executives deplored), the others being Panasonic, Samsung and LG.

This subject is more than a little esoteric, but there's a couple of real-world effects that are easy to identify. One is that Sony's move strikes another blow against the cursed cable converter box and its monthly rental fees. The box's functions should have been built into TV sets years ago, but cable operators and set makers were unable to agree on a standard approach to interactivity that would work on any system across the country. With Sony's acquiescence, tru2way (formerly known as OCAP) is now effectively that standard. The second real-world impact is that Sony's capitulation means there's little chance we'll see a cable-ready digital TV that fully integrates cable networks and services with complementary and competing programming from the Internet. The deals signed with CableLabs consign Internet content and other non-cable services to a program guide separate from the cable guide. The stricture rules out a guide that, for example, mixes on-demand movies from Netflix or Hulu with those from HBO.

Sony had been the strongest advocate for an alternative approach, dubbed DCR Plus, that would have given device manufacturers more control over the look and feel of cable services. The proposal drew derision from cable operators, which said DCR Plus would be obsolete at launch because it couldn't support some of their newest interactive features (e.g., displaying Caller ID information on a TV set when a call comes in over a cable-supplied phone line). The FCC, whose chairman has been Cable Enemy No. 1, gave DCR Plus advocates hope last year when it started considering rules for two-way plug and play. But the commission's did too little, too late to head off tru2way, which picked up support last year from such influential players as Intel and TiVo.

The TiVo deal illustrates the program-guide problem. In an FCC filing unearthed by the Gizmo Lovers Blog, the DVR pioneer reported plans for a tru2way-complaint device with two modes: a `TiVo mode' displaying all non-interactive channels in TiVo's customary user interface, which would allow recording, and a "cable mode” that displayed all cable networks and services in the cable operator's interface, minus the recording capability.

When asked why Sony dropped the DCR Plus effort, Sony Electronics General Counsel Michael T. Williams said in an e-mail, "There was simply a meeting of the minds between us and the cable operators and hopes of providing consumers with more choice. The key was an acknowledgment that we didn't know each other's business and we listened to one another." As for the guide issue, Williams wrote, "Sony is planning on providing a program guide separate from the cable guide."

On the plus side, the cable industry appears to be supporting tru2way with actions as well as words. Operators have committed to deploying tru2way in a significant portion of their devices, too, meaning that set manufacturers should be able to avoid a repeat of the problems they experienced with one-way CableCARDs. Manufacturers complained that the first generation of digital-cable-ready TV sets, based on a plug-and-play agreement hammered out almost five and a half years ago, were undermined by cable operators that didn't promote and barely supported CableCARDs. The cable industry retorted that the problem was the manufacturers' inconsistent implementation of the CableCARD specs.

Sony also won the ability to introduce new tru2way devices without the cable industry's prior testing and approval "after an initial period of demonstrated ability" to comply with the tru2way specs, Williams wrote. The promise of new devices is what makes deals like Sony's interesting. Consumer electronics and computer manufacturers innovate at light speed when compared to the pace of change in the cable industry. Just look at Panasonic's initial tru2way devices, announced at this year's International Consumer Electronics Show -- included is a set-top box with more pizazz than anything the cable operators offer.

What remains to be seen is how the tru2way licensing deals affect home entertainment networks. How will manufacturers deal with the requirements cable imposes for interfaces and content protection as they try to make it easy for consumers to move entertainment around their home, from device to device and to and from their cars? The worst-case scenario is that cable's technology and interfaces become the common denominator in home networks. But that concern, which once fueled the drive for DCR Plus, appears to be fading as manufacturers gradually make their peace with tru2way.

UPDATE -- My original list of true2way adherents included Thomson and Toshiba. An astute reader, however, noted that Thomson has exited the consumer-electronics business in favor of set-top boxes, cable modems, professional video gear and the like. And Toshiba's work with OCAP may be limited to building laptop computers capable of displaying cable TV.

 

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Times editorial writer Jon Healey pens opinion pieces about a variety of business issues, and blogs about technologies that are changing the entertainment industry's business model.

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