Latest from Next TV in Full-service-network

The Technological Legacy of Time Warner Cable

Wed, 08 Jun 2016 14:45:00 +0000

It was Sir Isaac Newton who said, “If I have seen further, it is by standing on the shoulders of giants.” The same might be said of many of the companies that today comprise the television and internet universe. This is particularly noteworthy today, as some of the companies responsible for fundamental innovations in the way we connect and communicate, are being absorbed, by consolidation, into larger entities.

A quintessential example is Time Warner Cable (TWC), an enormously and historically influential cable operator that recently became part of the “new” Charter Communications.

Time Warner Cable was an assemblage of earlier, smaller predecessors, dating back to the pioneering, 1960s era of the cable television business – companies such as American Television and Communications (ATC) and Warner Cable. Co-founded in 1968 by cable pioneers Monty Rifkin and Bill Daniels, ATC and later TWC led a decades-long charge in technological innovation that created sweeping changes in the way we watch TV and access content.

As noted in the chronicle of TWC’s corporate history, Making Connections, the passion for dramatic-yet-pragmatic technological advancement as a core strategic tenet was fostered by the company’s visionary leaders. And many of those enhancements – some dating back 30 years – paved the way to the anytime, anything, anywhere, any-device nature of today’s consumer experience.

TWC’s technological prowess stems back to major projects in the 1970s, ’80s and ’90s: such as the seminal two-way, interactive network called QUBE, developed by Warner Cable in the late 1970s; ATC’s invention of a way to use optical fiber as a principal medium for transporting signals and data in the late 1980s; and, the truly innovative Full Service Network (FSN) – a precursor to the fully-addressable 500-channel, on-demand universe – launched by Time Warner Cable in Orlando in 1994. (Pictured in a MCN file photo: then Time Warner Inc. CEO Gerry Levin with an oversized version of the FSN remote in Orlando, Fla.)

Some detail: ATC was the first cable operator (or telephone operator, for that matter) to spearhead the use of fiber optics as a method of transmitting video content. Under the leadership of cable technology pioneer Jim Chiddix, the company’s Oceanic Cablevision division tested and used optical fiber during the 1980s to transport video signals, initially on the island of Oahu.

After subsequent lab testing and development, led by Senior Engineering Fellow Louis Williamson in partnership with then-supplier Ortel Corp., fiber-based video carriage was readied for implementation throughout ATC/TWC. It spread ultimately to virtually the entire cable industry, even setting the table for later entrants/competitors such as Verizon Fios.

ATC coined the term “hybrid fiber-coax” (HFC) to characterize the new technology. HFC works by threading optical fiber – known for its robust, clean and passive (meaning no amplifiers required) characteristics – in the core of the network. The fiber optic cable then adjoins to coaxial cable at nodes, and the “coax” (pronounced “co-axe”) then delivers content the rest of the way to customer households.

Starting in the mid-90s and into the following decade, TWC and other cable companies invested tens of billions of dollars to deploy “two-way” HFC networks – capable of carrying transmissions both to and from subscriber households. This move enabled the delivery of interactive digital video services, as well as the introduction of affordable residential broadband service to American households. As a result of ongoing technological advancements and tens of billions of dollars of further investment, HFC networks are now delivering Gigabit Internet speeds to consumers, with the potential to expand to transmission speeds of more than 10 Gigabits per second.

Appropriately, in 1994 Time Warner Cable won the first Emmy Award earned by a cable operator – the Engineering Award for Outstanding Achievement in Technological Development, which recognized TWC’s pioneering work in using fiber optics to transmit video and broadband signals. Time Warner Cable went on to win eight additional Technology and Engineering Emmy Awards in later years.

TWC’s Full Service Network was a truly aspirational proof-of-concept network that was recognized in 2001 with another Technology Emmy. The FSN pioneered many of today’s most popular video services: Video On Demand, full “trick-play” (the ability to mimic analog technology, with pause, rewind, and fast-forward functions), and other interactive services now commonplace in the video ecosystem and the Internet.

TWC continued its innovative contributions in the 2000s with the introduction of video service features such as Start Over® and Look Back®: Start Over to satisfy viewers who happen upon a program after it has started, and want to simply begin it from the start; Look Back to find not-yet-seen episodes of programs from the recent past, to replay them from the start.

On the capacity front, Time Warner Cable in 1991 took the earliest steps into bandwidth expansion beyond known upper boundaries -- at the time, 750 MHz -- when it stretched its Brooklyn-Queens infrastructure in New York City out to 1 GHz. The initiative, code-named “Quantum,” was intended to provide the first-ever 150-channel, two-way system. This was before digital video compression had entered the scene, let alone switched digital video or analog spectrum reclamation, as bandwidth optimization strategies. The barriers included the need for a 1 GHz tuner and amplifier, neither of which existed at the time.

Time Warner Cable also spearheaded the development of the bandwidth-conserving technique known as “switched digital video,” based on the premise of transmitting only content that is requested, not the full broadcast of all channels, all of the time. More recently, TWC had led the way in developing video service apps delivered to retail video boxes such as Roku, and smart TVs made by Samsung and LG. In November 2015, TWC launched the TWC TV Roku Trial, becoming the first cable operator to deliver a full multichannel video lineup via Internet Protocol (IP) through an app, to satisfy the consumer appetite for using apps to experience multichannel video.

Geographically, Time Warner Cable was also at the forefront of the concept of “clustering” of cable systems – both to achieve economies of scale, and to strategically share services, such as marketing and engineering, within geographic divisions. Beginning in the 1980s, and continuing through the ensuing decades, ATC/TWC (and many other cable companies) engaged in “system swaps” and acquisitions to further refine geographic and technological efficiencies.

The TWC family of companies also made significant and innovative contributions to the creation of unique cable content that customers love. When the QUBE system was completed in the late 1970s, for instance, TWC predecessor Warner Cable saw a need to fill up its (then-enormous!) 36-channel capacity. Together, with its parent company, TWC launched MTV and what would become Nickelodeon. Later, in 1992, TWC launched its award winning local news channel NY1, which became the model for dozens of 24-hour local news channels – run by TWC and other cable operators – across the country.

The brand and company name we have known as “Time Warner Cable” soon will be leaving our collective consciousness, so it’s an appropriate time to reflect on the company’s contributions -- if only to imagine what might not exist, were it not for TWC’s substantial achievements. They will continue to serve generations to come.

Goodbye, Time Warner Cable

Glen Friedman Ideas & Solutions — Tue, 31 May 2016 16:45:00 +0000

As I read the news of the closing of the Charter Communications-Time Warner Cable transaction, I am sad, as a former TWC/ATC executive, to see the company disappear.

I worked for ATC and then Manhattan Cable in the 1980s. Under Trygve Myhren’s leadership (ATC’s CEO from 1975 to 1988), the company rationalized markets and realized that serving major DMAs was the way to go. But more importantly, Trygve and the team saw the future.

ATC pioneered advancing cable technology and capability: first video-on-demand, then pay-per-view, advertising sales (a tiny business), data services and retail. ATC also created one of the first national customer service/ retention departments, of which I was a proud manager.

Related:Charter’s New Road Map [subscription required] | Charter Sets Its New Technology Team [subscription required]

The company’s innovation continued as it became Time Warner Cable (merging with Warner Cable). TWC achieved great financial success and did bold experiments like the Full Service Network. Wow! What a concept — 500 channels. TWC took the leadership role in rolling out fiber networks and continued achieving meaningful adsales revenues, solidifying its position.

Today, as TWC winds down, Charter and Comcast are both at the forefront of delivering the most compelling customer offerings and services ever delivered by cable companies. They’ve become the innovators, creating meaningful business revenue above and beyond delivering programming — from advertising to content creation to serving businesses’ and consumers’ technology needs.

Related:Rob Marcus: Tuning Up TWC Before Handing Over the Keys [subscription required]

It will make a great case study to see Charter and Comcast evolve side by side, and to assess why both surpassed and survived the once much larger Time Warner Cable. I wish the entire Time Warner Cable team all the best.

R.I.P. Time Warner Cable and Bright House Networks (another storied company). Here’s hoping the Charter team, led by Tom Rutledge with his deep ATC/TWC roots, leads the company to new heights and pioneers the next chapter.

Money, Technology, Timing Have Vexed Cable's Game Attempts

garyarlen@gmail.com (Gary Arlen) — Wed, 08 Oct 2014 11:30:00 +0000

This week's Multichannel News "Game Over" cover story pinpoints cable's failure to capitalize on the latest videogame phenomenon: letting viewers watch videogame players do their thing.

Actually, the cable industry has missed countless videogame opportunities for decades, even as the latter has grown to rival (in revenue) the motion picture industry, a lifeblood of cable viewing. For multiple reasons, cable and videogames have not found a way to meld. From PlayCable and Interactive Network, through the Sega Channel and the Time Warner Cable's "Full Service Network," to Buzztime, G4TV and Zodiac Interactive, cable operators and programmers have flirted with videogames for more than three decades. Invariable the "Game Over" message popped up because of inadequate technology, financial disparities and bad timing in the twitch-speed world of interactive gaming.

Many of the videogame visions were closely tied to cable's unending promises of "interactive TV," dating back to the late 1970s when Warner Cable offered multiple choice quizzes as part of its pioneering QUBE system. Time-Warner Cable kept its faith in videogames, which were a feature of its very expensive Full Service Network test in Orlando in the mid-'90s. The high-quality, high-speed games in that venture relied on a high-priced Silicon Graphics set-bottom box (too hefty to put atop a TV set). More recently, Comcast tried to leverage the popularity of videogaming - especially among the desirably 18-34 year old male audience - via its G4 channel. Even that "network" has quickly devolved into an online Website with very limited linear distribution.

Invariably, the starry-eyed developers - both serial entrepreneurs and established companies - hoped to mesh the $46 billion global videogame juggernaut with cable's distribution capabilities. They quickly found that cable's "star"-configured architecture posed problems for delivering the most popular games; the system latency simply couldn't keep up with the speed of game play. Deeper problems - notably the hurdles (spelled c-o-s-t) of putting sufficient processing into set-top boxes - have also stymied programmers, who created complex plans for bringing games to cable.

On the financial side, cable operators have predictably been loath to dedicate channels to games, when higher value programming was available. Visionary John Malone - both in his stints at Tele-Communications Inc. and at Liberty Global - has invested in numerous game projects, ranging from play-along services such as Interactive Network to download videogame delivery systems (the Sega Channel). But even Malone's alleged magic touch has not been able to bring games to cable successfully.

Moreover, cable's timing has often been miserable when it comes to videogames. The Sega Channel (which was co-owned by TCI, Time Warner Cable and Sega of America when it debuted in 1993) was focused on downloading about 50 games per month to homes that had a Sega Genesis console. The problem was that the 16-bit gaming device was about to be eclipsed by Sega's own 32-bit Saturn console. An added barrier was the cost to operators: MSOs were leery of the $180 price for an adapter they'd have to supply to every home, a sum that was hardly offset by the $25 activation fee and their share of the $13 per month subscription premium. At its peak, the downloading service reached about 250,000 subscribers, but numbers dropped steadily and in July 1998, Sega abandoned its channel.

Several omens of this disconnected relationship between the cable and videogame industry actually surfaced more than a decade earlier as both cable and videogames were booming onto the media landscape. Jerrold Electronics, a major supplier of cable hardware, teamed up with toymaker Mattel to make Mattel's Intellivision videogame console accessible to cable customers via a special adapter. The "PlayCable" service downloaded about 20 games per month to the console via an FM band within the cable signal. Software spurted downline through a carousel cycle. Jerrold's parent company, General Instruments, supplied the microprocessor at the heart of the system.

When PlayCable debuted commercially in 1981, Mattel and Jerrold predicted it would have one million subscribers within five years. In 1983, when they pulled the plug, there were barely 20,000 customers.

Even more perplexing was the situation within the Warner Communications empire of that era. Many observers at the time expected that when it acquired the then-dominant Atari videogame console/software business in the late '70s, Warner would integrate videogames into QUBE, its interactive cable technology that was just rolling out. There were some slight attempts to do so. But look at the business plan developed by an Atari corporate task force in 1981. It conceived a vision for "advanced consumer telecommunications products and services" that would allow "Warner Communications a unique means of entry into an industry which cannot help but impact the company's broad business purposes." Although the document describes the "convergence" of telecom and data services, and presciently identifies mobile, home automation and entertainment opportunities, nowhere in the 133-page proposal is there any reference to the capabilities of the Warner Cable systems as a component in that envisioned expansion.

The "AtariTel" concept quickly evaporated, doomed after Warner unloaded Atari in 1984. QUBE disappeared soon thereafter.

Hardened Hearts

Those early stumbles may have hardened the hearts of cable overlords to the potential of videogames in their business. But it did not discourage games promoters from their dreams of cable deals. And with the hype about "interactive TV" in the pre-Web era of the late '80s and early '90s, dozens of game concepts emerged, many of them 20th century predecessors of today's "second screen" projects. Interactive Network offered play-along versions of professional and college football games, baseball and other sports events plus series ranging from Wheel of Fortune and Jeopardy! to L.A. Law, Murder She Wrote, and American Gladiators. Its investors included TCI, NBC, Gannett, Cablevision Systems and Nielsen.

Ultimately, the shuttered company faced a patent showdown with TCI. Interactive Network founder/CEO David Lockton (who is now creating an advertising second-screen application, WinView) reflects that TCI and other MSOs didn't appreciate that the game revenue stream (up to $20 per month) could "threaten their ability to control revenues." Adding to the MSOs' dismay were subsequent investors, such as NBC, which received warrants that would dilute the value of the early investors' stakes.

(There is some irony, of course, in the flow of history. Most TCI systems and NBC are now under the umbrella of Comcast, which has its own videogame and entertainment biases.)

Perhaps the closest cable has come to the videogame mainstream was Comcast's G4 network (also known as g4techTV), which took over the channel of geek-centric TechTV. G4 featured a line-up of shows about multiplayer game competitions, reviews of new software and hardware, tips and cheat codes on videogames. Its slow death over the past 18 months reflects the symbiotic situation: too boring for the target audience, which meant too paltry for the anticipated advertisers.

Buzztime, a trivia game service that was born from the bar-and-restaurant entertainment offerings of its parent company NTN Communications, adapted its quick quizzes for cable in the early 2000s. The in-band virtual channel focused on short-form content that cable viewers could play while waiting for a show to begin. A multiplayer version enabled subscribers to play against other homes within the same system; Buzztime's casual game structure did not suffer from system latency. Buzztime also developed "pass-the-remote" software, enabling people watching the same TV set to compete against each other by sharing the remote control when their turn came. From a marketing stance, it hoped to cross-promote its brand between the "hospitality" sector and the home. (Disclosure: the author sat on the NTN Buzztime board of directors during the early and mid-2000s.)

Buzztime's first affiliate was Susquehanna Cable. That relationship encouraged Comcast to sign up and offer Buzztime on its Baltimore-area systems for a few years. Time Warner Cable also carried the Buzztime games. And Scientific-Atlanta invested in the company in an effort to add value to its STBs, with games becoming an application along with news and weather.

But as Dan Sweeney, a veteran cable sales executive who handled Buzztime's cable deals, points out, the cable operators were more interested in developing video-on-demand in that era.

Even Microsoft, during its long and costly "Microsoft TV" courtship of the cable industry, tried to find a way to port games to the Xbox 360 as a virtual STB. It was an idea that faced substantial skepticism from cable operators who were skittish about content going through any other set-top box than the ones they controlled.

Disconnect: Speaking Different Languages to Different Audiences

Despite all of the attempts to bring videogames to cable, the two industries have rarely seen eye-to-eye because of technology, financial and compatibility differences.

Dr. Christopher Weaver cites the "cultural divide between games people and transmission people" (i.e. cable operators). Weaver is a former NCTA Science/Technology vice president (early 1980s) and subsequently the founder and former CEO of Bethesda Softworks, one of the world's largest developers of role-playing, racing, simulation and sports videogame software ("The Elders Scrolls," "Terminator," "Fallout" plus drag racing and the Wayne Gretzky hockey series).

Now co-director of the Center for Creative Learning at the Massachusetts Institute of Technology, Weaver focuses on the differences between "the imagination of the design and programming" world and the capacity/network control mentality of technical and engineering managers.

He also acknowledges the varying objectives of audiences.

"The reason people watch videogames is to learn how to play better," Weaver explains. That works in "turn-based games" such as poker or quizzes, when each player makes a consecutive move, he adds. Weaver says that the training value is now becoming apparent in real-time action games, which is why Amazon's timing in its Twitch acquisition is so valuable.

"People have always wanted cheat sheets," Weaver adds. "They want to get good at playing, and they want someone to teach tem the tricks for success."

Toying with Games

As the videogame torrent flooded the media market in the 1990s and early 2000s, cable networks tried to find a connection. HBO, MTV, Showtime, Nickelodeon and others explored ways to bring gaming under their canopies - never with notable success.

As recently as 2005, ESPN contracted with games developer Zodiac Interactive (via its newly launched Zodiac Branded Games subsidiary) to develop ESPN-branded games for digital STBs. The sports-themed, single-screen interactive games were intended to integrate ESPN personalities with programming that ranged from football, basketball and boxing to auto-racing.

The long-running Game Show Network (GSN) has often toyed with interactive gaming, enabling viewers to play along. In fact, its founding leader in 1992, Sony Pictures Entertainment President Mel Harris, often mentioned Sony's expertise in gaming, well before Sony's PlayStation products ascended in the console game world. Sony, which still has a controlling 58% interest in GSN, has not been particularly aggressive in connecting its videogame and TV game shows lines of business - another reminder of the barriers between fiefdoms within huge corporate empires (especially struggling ones such as Sony is today).

At the cable TV conventions of 1992 and '93, you could hear the pitches from the simultaneously unveiled "Game Show Channel" (backed by Sony Pictures Entertainment and United Video Satellite Group) and the "Game Channel" (a spin-off from the Family Channel, formerly known as the Christian Broadcasting Network). Both intended to leverage reruns of prime time and syndicated TV game shows.

With the growing appeal of online games - including MMOGs (Massively Multiplayer Online Games) - cable operators are facing a new challenge. Their broadband circuits are appealing to gamers while the game-less linear channels look boring in comparison. Cable's role as a carrier - with the concomitant issues of prioritization and revenue optimization - will pose new hurdles for operators who have been doing a decades-long dance with the videogame world.

Game On? Or Game Over? The experiences of the past 30 years suggests the only answer that has been the pattern.