Oh Say Can You See Convergence?

There’s one thing to say about getting sick… you get to watch a lot of television. I just spent a week on my couch, and while being sick is pretty lame — I was fortunate I’d had digital cable installed the week before. Or so it might seem.

I was underwhelmed by digital cable’s programming and video quality, touted as being “digital quality.” I may have been getting four Discovery channels, but I found that without buying premium service, the only other things of interest were Pay-Per-View and the Independent Film Channel. The video quality is compromised by high compression, and it isn’t as good as my old analog cable — at least when viewing the extra channels. But despite all that, all things considered digital cable has great features, and I won’t go back to the old way of doing things.

I’ve uncovered interesting issues at the convergence point of digital cable, interactive TV, game consoles, and broadband. That broadband Internet connections come through your cable company can open up some amazing opportunities you may not have considered before.

Last week’s illness has given me some time to reflect on the consumer experience. I’m a technology nut — as you might imagine. Before I buy a new computer, video camera, television, stereo, or other component, I research the heck out of it. Afterward, I wire all my stuff together and make them do neat things.

Of course, when someone like me intersects with a cable-TV company, some peculiar things can happen. In Rhode Island, where I live, we have Cox cable. About a month ago, I started coming to some of my conclusions when I was researching the various set-top boxes that Cox offers for digital cable. The first thing I did was call customer support and ask what manufacturer Cox used and which boxes were available to consumers installing digital cable.

Based on the rep’s response, I don’t think anyone had ever asked these questions before. But, as it turns out, she was able to get me the answers pretty quickly. The set-top boxes they use are manufactured by General Instruments, which was recently purchased by Motorola. The model Cox had most recently introduced was the DCT-2000 Interactive Digital Consumer Terminal.

Some of the highlights of this consumer box are pretty cool high-end home-theater-type features like S-Video connectors, wide-screen ratio compatibility, Dolby Digital (with an S/PDIF digital coax interface), and MPEG-2 Video. But there are some other interesting (if nascent) features as well. This device provides a two-way interface to the cable network and automatically downloads all the program listings on a regular basis. (Sound like TiVo?) It has parental lockout controls using the new television rating standards, and — although Cox isn’t supporting it yet — it can provide some access to Internet, email, and home shopping.

What is more interesting to me is that Motorola’s next version (which I uncovered during my search) — the DCT-5000 — looks even more interesting. This thing has all the features listed above but also includes a cable modem for use with either internal controls or pass-through for PC and IP telephony. It also offers USB, EE1394 firewire for HDTV interface, PCMICIA support, Smart Card support, a Parallel port (for printing), and the option of a hard drive using an integrated IDE connector. (Can you say personal video recorder [PVR]?)

The reason I go to this level of detail is because I’m paying my cable company $2 per month for my device. And think about it — how far away are we from the incorporation of TiVo, AOLTV, or UltimateTV into these things? I’d happily pay a small fee every month for integrated PVR support!

That’s not too far off when you consider that AOL Time Warner owns most of the cable networks in the United States and that it has just signed on with Sony to offer Internet access, email, instant messenger, and Netscape to the PlayStation 2.

Now wait a second. Did anyone notice that Microsoft’s new Xbox gaming console, due out in September, includes an ethernet port for broadband access, and its UltimateTV includes WebTV? (These operating units were combined?) And doesn’t Microsoft have an interest in some cable networks as well?

That leaves us with the only nonaligned player in the space: TiVo. And I predict that TiVo is going to jump right into the fray through partnership or acquisition. It’s the only player that isn’t owned by a company affiliated with a cable network. And although many players invested in it, including AOL and NBC, TiVo has the flexibility to go to every other cable operator out there.

And TiVo may well be an interesting acquisition target for a company such as Excite@Home (if it weathers the current storm). Or Sony could take a closer look, considering that it’s one of the manufacturers using TiVo’s solution — which would leave Sony with a prime method of offering I-TV to its PlayStation 2.

This is going to be a very interesting time because many experts are saying that the home electronics system of the future is going to be built around these high-end video-game consoles. They’ll be the heart of the home network and the glue that holds your stereo, television, computer, and even your appliances together. Hey — it’s called “convergence,” baby! Get on the bandwagon!

I’ll sign off now — because this is starting to sound like a conspiracy-theory newsletter.

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