Broadband Communities

AUG-SEP 2013

BROADBAND COMMUNITIES is the leading source of information on digital and broadband technologies for buildings and communities. Our editorial aims to accelerate the deployment of Fiber-To-The-Home and Fiber-To-The-Premises.

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Provider PerSPeCTive BYOB: Bring Your Own Box The growing popularity of video streaming boxes can beneft cable operators. By Bryan Rader / Bandwidth Consulting LLC A s pay-TV subscribers continue to take control of their content consumption, many fnd the easiest solution is to buy an inexpensive box to connect the TV to the Internet. In addition, as customer demand grows and viewing behavior changes, many providers ofer such devices to their customers. Apple has sold 13 million Apple TVs, half of them in the last 12 months. Roku, which launched its streaming player in 2008, has sold more than 5 million of them, doubling its sales in the last year. Between them, these two companies have almost 20 million customers, or 20 percent of the pay-TV market. And Apple still calls this business a hobby! Amazon is expected to launch a new box this fall, ofered with Amazon Instant and including video on demand and a cloud-based DVR. Google simplifed the process even further by launching a $35 device, Chromecast, that simply allows viewers to access content with a smartphone or tablet and send it directly to a TV. More independent boxes are coming soon. Te pay-TV party is changing, and it is BYOB – bring your own box. Tis should concern cable operators whose customers are invited to this party. Cable operators had better pay attention if they want to join the celebration. Who made the invitation list? Buyers of independent boxes tend to fall into three categories. Tey may be price conscious (households that do not want to pay for traditional pay-TV packages). Tey may be early adopters (those who always like the newest gadgets). Or they may simply be among the young, frst- 10 | BROADBAND COMMUNITIES | time households who have never had pay TV and don't intend to sign up. Unfortunately for cable operators targeting the multiple-dwelling-unit (MDU) market, these groups represent a big percentage of the base. Let me throw some chips and dip on the refreshment table. Cable operators don't need to fear this gathering. Tey need to crash it! Tis can be a great opportunity to drive potential customers to their core strength: very fast broadband backed with responsive in-home support. For years, pay-TV providers in the MDU market were challenged to install three high-defnition DVRs at $400 each for a new customer with a oneyear lease. How can this model ever work in the long run? MDU residents can be hard on these expensive boxes, and an operator can't invest over $1,200 on an install for a short-term user. But the change in viewing behavior among younger MDU customers is allowing operators to revisit this model. Instead of paying for an expensive install, operators can let customers sign up with their own hardware (Roku, Apple TV, Amazon's new box, etc.). Don't fght it; join it! It's the diference between an "open bar" party for a bunch of thirsty young invitees or a "cash bar" with no limit on the total number of drinks (I mean devices). Let's try to get a measure of control on the drinking (er, content viewing). Private cable operators (PCOs) that target this audience should make it easy for future residents to bring their own boxes. Tey should educate their www.broadbandcommunities.com technical support and call center teams on how to install and use these devices. Tey should ofer help desk and on-site advice to customers for a small monthly fee. Tey might even make some of these new streaming devices available at their websites. In other words, don't fear this get-together; get it on your social calendar. Cox Cable is the frst franchised cable operator to do something about this. It is beta testing a new Internet TV service in Orange County, Calif., to meet the demands of this market. Called fareWatch, this product requires only a $99 Fanhattan Fan TV set-top box and ofers a package of 90 live TV channels (including ESPN and TNT) with a cloud-based DVR. Cox charges only $34 a month for this service to a customer who also subscribes to a highend Cox broadband product. Great idea! We should look at similar ideas to capture this audience. In fact, there are rumblings now about several companies designing boxes and streaming content solutions that are geared just for the MDU audience. I think it is a great strategic move. Now is a good time to check your email for the e-vite to this party. It's gonna be the event of the year, and you don't want to miss it. But remember, it's going to be BYOB. v Bryan Rader is CEO of Bandwidth Consulting LLC, which assists providers in the multifamily market. You can reach Bryan at bryanjrader@yahoo. com or at 636-536-0011. Learn more at www.bandwidthconsultingllc.com. | August/september 2013

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