CableCard Technology in Trouble

As promised, I set out at the CEDIA trade show to find out how--and if--manufacturers are implementing CableCard technology. Based on what I heard today, the technology is in big trouble.

Refresher: CableCards are small devices that look like PC Cards and go into a slot in the back of a television or set-top device to decrypt encrypted digital cable television broadcasts; they eliminate the need for a cable set-top box and that box?s remote control (so you could cut your remote count from eight to seven). The Federal Communications Commission has mandated that cable companies offer CableCards.

Steve Panosian, Samsung?s director of marketing for DLP and CRT televisions, says 30 percent of Samsung?s DLP sets have CableCard slots. ?[Next year], it will be in just some models, not all,? he says. Part of the reason it isn?t in more sets is that most customers aren?t really asking for it. Implementing CableCard in a TV costs the consumer about $300, he adds, and it needs to be $100 to $200 to speed acceptance.

NEC?s senior product manager Hans Baumann says, ?We are not looking to do CableCard; only 3 percent of the models sold with CableCard are being used with it.? Part of the reason consumers aren't using it may be because cable television companies have been making it hard for consumers to get them. People who use CableCards don?t have to rent a set-top box, and they may be able to use a third-party set-top DVR such as the TiVo Series3 HD instead of the cable company?s DVR. In short, CableCards cut into cable companies? revenue. ?We would be [more interested in offering CableCard], if the cable companies would be agreeable to it,? Baumann says.

Hewlett-Packard product manager Stokely Marco was even more pessimistic. ?We?ve gone away from CableCard,? he says. A couple of its first televisions had the slot, but newer ones do not. ?When two-way [CableCards] come into play, that?s when we?ll investigate getting back in,? he adds. Two-way CableCards, which are still in development, would allow televisions that use them to deliver video-on-demand and program guide information, things that current one-way CableCards don?t.

?Two-way CableCard is a mess,? says Scott Ramirez, vice president of marketing for Toshiba. ?Cable companies are petitioning the FCC every month because they don?t want to do it,? he says. All of Toshiba?s current 1080p sets have one-way CableCard slots, but Ramirez couldn?t predict what the company will do in the future. ?Toshiba is still developing for it, but what happens to it depends on the cable industry,? he says.

Hitachi was the one television maker I spoke to today with any positive remarks about CableCard. Michael Nadasi, national training manager for Hitachi, said that all of the company?s flat-panel TVs have one-way CableCard slots, and if and when a specification for two-way CableCards appears, Hitachi will create products that use it. ?As a manufacturer, if there?s a spec to write to, we?ll accommodate it,? he explained. ?But we?re not the dog wagging the tail on this one.?

It doesn?t look good for CableCard, or for consumers. TV deployment is waning, and whereas the technology was supposed to encourage more third-party devices, the Series3 TiVo is the only one (that I know of) that uses it. Hope you like that cable-company DVR; looks like consumers will have few other options.