The cable set-top box = the dodo?

The January 17 article in The Wall Street Journal asserts that the tru2way™ announcements made at CES between Panasonic and Comcast could be a sign of the soon-to-be shrinking influence of both Motorola and Scientific-Atlanta (Cisco) in the North American cable CPE business. Perhaps. If cable operators can persuade a growing number of device manufacturers to incorporate two-way interactivity into their devices, there is certainly a reduced financial burden on the MSOs to both deploy and support separate boxes. And, logically, it makes sense that the more devices that can connect to a cable network's interactive features, the more value a customer will place in that service. This could encourage a continued uptake of features like video-on-demand and other interactive applications. Certainly, from the cable operator's perspetive, the ability to target ads at more people via more devices is also part of the business case calculations.

Although this all sounds positive, rumblings from the industry - and particularly the consumer electronics companies taking the risk to implement tru2way into their devices - indicate that all of the links of the chain aren't quite together. For example, we've heard frustration that the cable operators haven't put enough resources (marketing, incentives, etc.) into establishing the kind of consumer awareness that it will take to drive sales of tru2way products. Also, the retailers themselves haven't stepped up in full support of selling the devices, either. It's obviously a huge risk for them to set aside shelf space for these products, with no guarantee that they'll sell to their expectations.

If cable is serious about seeing tru2way's success, the industry has got to put its time, effort, and money into some significant marketing support. There's a real danger that jilted CE companies will simply choose alternate routes to deliver content to their customers (see this blog from last week). So, while Motorola and Scientific-Atltanta's influence may be waning, the same could be said for the cable industry overall.