Sony has announced it will integrate tru2way, the standard for devices to interoperate with cable TV services in the US, into TVs for the US market. Behind this announcement stands the cable operators Bright House Networks, Cablevision, Charter, Comcast , Cox, and Time Warner Cable. The Java platform tru2way enables consumer electronics devices to interact with cable TV services, without the need for a dedicated cable set top box.
Sony has announced it will integrate tru2way, the standard for devices to interoperate with cable TV services in the US, into TVs for the US market. Behind this announcement stands the cable operators Bright House Networks, Cablevision, Charter, Comcast , Cox, and Time Warner Cable. The Java platform tru2way enables consumer electronics devices to interact with cable TV services, without the need for a dedicated cable set top box.
This is yet another nail in the coffin for the walled garden end to end delivery model from the cable operators, and rightly so about time. Cable operators are in the services market, and not in the electronics and device arena. It therefore makes business sense for the operators to focus on the services element, and have an agnostic device platform strategy. Many may wonder why the cable industry is opening up access to its services to third parties, however this is likely due to regulatory pressure from the FCC, but importantly as well, to gain a competitive edge over satellite TV providers and the aggressive IPTV providers that are squarely aiming at gaining market shares at the expense of cable operators. If the cable industry can establish an eco-system of consumer electronics devices that can only work with cable TV services, they are upping the switching cost for consumers to go from cable TV to say satellite or IPTV.
Pay TV providers: pay attention, the race is not over
Even though the US cable industry has a head start over satellite TV and IPTV providers, there is still time enough to react and provide competing platforms for consumer electronics device manufacturers.
1. tru2way is based on Java, which can be a difficult platform to implement in some cases, for instance with Blu-ray Live, where content owners that provide services over BD-Live find the Java platform time and cost consuming, while device vendors seek partnerships to implement BD Live on the Blu-ray players. Other content providers could therefore counter tru2way with a more interoperable, lower cost environment and thus win support for their respective platforms. May I suggest the use of web technologies to anyone?
2. There are still very few products on the market and in consumers' homes that actually support tru2way, or the re-branded cableCARD. There is therefore time for satellite and IPTV providers to partner with device vendors as well. However, the last thing that device vendors want are one product line for cable TV, one for satellite TV, and one for IPTV. Device vendors are only testing out tru2way, and can therefore be swayed over to alternative platforms.
The challenge for satellite and IPTV providers is that if tru2way becomes successful in the market, and consumers buy multiple products with tru2way support, it is less likely that consumers will opt for satellite or IPTV services, since these services will not work on their products. This is a clever way to create high switching costs, and suits the cable industry given that there is less overlap of cable networks than there is with satellite or IPTV networks.
