Summary
There has never been “the cable app experience.” At the same time, is it really the case that both “Verizon or AT&T [are ever truly] announcing some new suite of TV apps for FiOS or U-verse”? “Twitter”, "fantasy football, and “multiview” were not designed by Verizon executives – they were already around.
Analysis
Both the CATV and phone companies have always been “lacking” in their abilities to come up with new applications that were successful. First of all, it should be pointed out that U-verse has turned into a disaster anyway because the higher-ups at AT&T cannot get on the same page about FTTH. Secondly, perhaps thousands of R&D people could be let go at both the MSOs and CableLabs and nothing would be lost. As a side note, just how many engineers does it take to oversee something like DOCSIS 3.0?
CableLabs’ major purpose is to ensure standardization on technology. As far as any "platforms for cable app development [that] are in place there," they are not likely to be revolutionary. “They are [not] lying in wait...to...dazzle us all soon.”
Also “[i]t's not kind of the classic case of the new entrant being more innovative than the incumbent” as argued by a person commenting on the source article. Cable does not really offer “a more innovative voice product.” It is really just cheaper.
No important trend in usage of data or video networks was originated in the boardroom of a telco or MSO. Even the anticipated styles have fell tremendously short of expectations with the cable TV operators, such as movies/videos on demand. New concepts like YouTube, social networking, and interactive games have emerged mainly from Silicon Valley start-ups. Verizon has not been behind any major trends in consumer usage such as Facebook, Twitter, etc. in about 15 years of the Internet’s existence. In the final analysis, new ideas like live Broadway are just taken out of the air. In actuality, it is not the job of the corporate executives at Verizon to figure out the next Twitter anyway.
The supposed trends being advocated by the MSOs are not likely to happen simply because of the way they are running their own businesses. They have not devised a good strategy in dealing with studio content assets. Their demographics are weakening. At the same time, the world is moving toward social media and other communications.
The older executives at the MSOs seem to have no clue when it comes to newer media in general and believe that ideas such as network DVR are going to be big winners. They get angry with subscribers, who do not want to pay for services such as Facebook. They fail to see that there are no fees on the broadband side. As a general rule, expect the exact opposite to happen on any of their predictions with video services because they will be most likely misguided.
On the positive side, the MSOs have stabilized some of the market share losses they were having versus DSL. They also still have a business in managing their networks and in delivering ESPN, Discovery Channel, etc. In addition, they will increasingly get into business VoIP.
Samuel Greenholtz consults with leading institutions through GLG
Analyses are solely the work of the authors and have not been edited or endorsed by GLG.
