Cable operators will be challenged to find enough open video channels to support a gradual transition to IP-based video, which could mean an early end to analog cable television in large parts of the country.

The former chief technology officer of Charter Communications, Marwan Fawaz, noted cable operators will need at least 24-32 free analog channels to duplicate their digital lineup — considerably more than many operators have available on today’s crowded cable dial.

Fawaz

The transition to digital cable won’t be easy for some consumers, many who actively dislike set top boxes on every television and the endless rental fees that often accompany them.  Cable operators face more resistance from customers than their telephone and satellite competitors, who have always required equipment on every television in the home.  But with the demand for increased broadband speeds, new network-capable DVR boxes that can be accessed from other televisions in the home, and the never-ending addition of new HD channels, converting analog signals to digital is the most cost-effective way to free up space to handle today’s demands on existing cable systems.  The alternative would be expensive upgrades to increase available bandwidth — an investment unlikely to win favor on Wall Street or in company boardrooms.

Cable operators are taking different approaches to the challenge.  Comcast has been systematically reducing the number of analog signals on its cable systems, using that space for new digital signals, including HD broadcasts and faster broadband.  Time Warner Cable has deployed a transparent “on-demand” system for its lesser-watched digital channels that only transmit them into neighborhoods where viewers are watching them. Smaller operators are also moving to adopt nearly all-digital cable television lineups, especially on older systems that have already exhausted available space for new channels and services.

Fawaz says cable’s progression to IP-based delivery of cable channels is inevitable, a matter of “when” not “if,” according to an article in Light Reading:

For operators that don’t expect to have that much capacity available to them soon, he suggests that they could start off in smaller stages, perhaps beginning by moving Video-on-Demand services and some “niche” networks over to IP and supporting them with hybrid QAM/IP set-tops or gateways. Another transitional option, at least from an in-home multi-screen perspective, is to start using specialized transcoding that can convert QAM video to IP and pass those streams to tablets, PCs and other devices using the home’s Wi-Fi network.

Most cable operators are supplying customers with digital adapters that can accommodate digital signals on older, analog televisions, without a giant set top box taking up space.  To make the transition easier, operators typically provide up to 2-3 boxes for free for 1-2 years and then bill customers a nominal rental fee thereafter.

An increasing number of cable customers will become familiar with these “DTA” boxes in 2012.  Time Warner Cable, the nation’s second largest cable operator, will continue its progression to convert its cable operations to mostly-digital this year.  Time Warner’s customers in Maine were the first to experience the switch, with mixed results.  Fawaz expects some remnants of the analog lineup, as well as some limited support for QAM channels, will remain for the next 7-10 years.

If you are customer of Charter Cable, chances are you are paying a lot more than $60 a month for a complete package of cable television with a DVR box and 30Mbps broadband, price locked for two years.  But Charter is selling precisely that package to customers in Monticello, Minn.  Why do they get a deal you can’t have?  Because your town probably doesn’t have a community-owned broadband provider delivering competition.

Charter’s website offers new customers a six-month cable/broadband promotion for $64.98 a month, but that does not include a DVR box and delivers half the speed Charter pitches to the chosen few in Monticello.  After six months, the deal ends. A package including what Charter sells in Monticello for $60 a month costs more than twice as much elsewhere — $145 a month for customers in Rochester and Duluth.

"For the BEST prices in town, you must call your 'In-Field' representative," the flyer declares, including the name and number of a local Charter representative.

The cable operator is keeping the two-year special offer quiet as much as possible with the use of door flyers hand-delivered to potential customers. If Charter’s five million customers nationwide find out, they may wonder why they are paying dramatically more for the exact same service.

The city of Monticello already knows why.  The local community decided the incumbent providers — TDS Telecom and Charter Communications — were not giving the city the attention it deserved, so it built its own 21st century fiber to the home system to bring faster broadband to the region.  Now the incumbent commercial operators appear to be stopping at nothing to put FiberNet Monticello out of business.  Charter’s pricing takes fat profits from customers in nearby Minnesota cities and appears to cross-subsidize the heavily discounted service on offer in Monticello.  While that delivers short-term savings to customers in Monticello, other Charter customers are helping cross-subsidize those low rates on their own high cable bills.

If you are a Charter Cable customer, why can’t you have the same deal residents in Monticello are getting?  Why not call Charter at 1-888-438-2427 and ask them?

Time Warner Cable has begun a review of operations at its latest completed acquisition, Insight Communications, as it begins to transition customers away from the Insight brand towards Time Warner Cable.

Insight’s customers in Kentucky, Ohio, and Indiana won’t see changes immediately.  Time Warner says it will be “business as usual” as the company begins to manage its newest service areas.  Time Warner Cable spokesperson Mary Jo Green said the company plans no immediate channel or price changes, but some Insight subscribers are worried about the long term fate of the NFL Network, which has been a part of Insight’s cable lineup but has not been carried by any Time Warner Cable systems.

Time Warner says its engineering staff will be examining the current state of Insight’s infrastructure — a key factor in determining what services already familiar to Time Warner customers can be extended to Insight customers.  Most of them involve the cable television operation.  Features like “Look Back” and “Start Over” have not been available on Insight’s cable systems.  Insight broadband offers tiers of 10, 20, 30, and 50Mbps — same as Time Warner.  The phone service is similar as well.

Kentucky will become one of Time Warner’s largest service areas as the company absorbs Insight.  Time Warner and Insight traditionally operated as neighbors in different parts of the state. Insight served most of the city of Henderson while Time Warner Cable covered most of Henderson’s suburbs.

Time Warner Cable’s acquisition of Insight adds more than 760,000 customers, including 550,000 broadband, 670,000 cable, and 290,000 phone subscribers across three states.

[flv width=”360″ height=”290″]http://www.phillipdampier.com/video/WTVQ Time Warner Cable Takes Over Insight Communications 2-29-12.mp4[/flv]

WTVQ in Louisville tells Kentucky Insight subscribers to get ready for the Time Warner Cable logo.  Time Warner completed its acquisition of Insight Communications last week.  (1 minute)

ABC’s Daisy Whitney (New Media Minute) went in search for evidence that Americans really are fed up with their cable TV bill and are cutting the cord.  She collided head-on with an industry still in denial that consumers are fed up with high cable bills and relying on their home broadband connection for video entertainment.

Nielsen reports there are 5.1 million homes in the U.S. that have broadband-only service from their provider, and presumably rely on over-the-air TV for live televised events.  That’s up a huge 23 percent over last year.  But some analysts dismiss that as growth that comes from homes that never had broadband in the first place, a conclusion that needs more evidence to back it up.

Providers admit most of their new customers are coming from other broadband providers, especially as Americans dump slow DSL in favor of faster cable or fiber-delivered service.  In most areas, those who want broadband service already have it.  The primary exception: rural residents just accessing newly-available broadband for the first time.

For 20 years, the cable industry has enjoyed a growth in video subscribers.  That is no longer the case.  While the numbers are not staggering, hundreds of thousands of big cable customers are dropping their cable TV subscriptions every quarter, and they don’t seem to be taking their business to the competition.  Granted, many cancellations are income-related, especially among video-only customers, but it is clear a ceiling has been reached on what Americans will tolerate from the cable company.

With programming rate increases continuing unabated, that bill is only going up.

[flv width=”640″ height=”380″]http://www.phillipdampier.com/video/ABC Quitting Cable TV Truth or Lie 2-22-12.m4v[/flv]

Daisy Whitney’s New Media Minute explores cord cutting.  (2 minutes)

Rabbit ears are making a comeback.

After this year’s cable and satellite rate increases, the average American is now spending $550 a year on basic cable television.  With declining middle class incomes and increasing energy and health care costs busting the budget, something had to give.  Increasingly, it is cable and satellite TV.  Now consumers are combining the past with the future to find a cheaper way to watch television — over the air “free TV” with streamed online video entertainment.  Many broadcasters even offer extra channels that are made possible through digital signal compression.

Some marketers are going over the top with the renewed interest in over the air television, pitching “futuristic” television antennas at a steep price to customers who want to cut cable’s cord.  While your parents and grandparents were well-acquainted with antenna technology, today’s younger generations are not, and are overpaying for antennas you can find for a fraction of the price at Wal-Mart.

The concept of cord cutting is simple.  You can watch live sporting events and local news and network shows from over-the-air broadcasters and catch up on favorite movies and TV series streaming shows online.  The days of the snowy picture are over since the country converted to digital TV.  But in many cases, an antenna is essential to getting the best reception.

Satellite and cable companies are trying to compete, offering discounts and, in some cases, pared down packages.  But prices will need to come down further: the average video streamer and over-the-air viewer pays $180 a year on average for a premium streaming package from Netflix, Hulu or other online viewing option.

[flv width=”480″ height=”290″]http://www.phillipdampier.com/video/KIMT Mason City IA TV Antenna Making a Comeback 2-21-12.mp4[/flv]

KIMT in Mason City, Iowa explores the growing interest in the old-fashioned TV antenna.  (3 minutes)