Last month, Insight Communications Co. started rolling out Motorola Inc.'s DCT 6208 set-top, a single-tuner, HDTV-capable box with a digital video recorder that Insight, and other Motorola-based MSOs, hope will help repel direct-broadcast satellite.
The only problem, for some in cable, is that the deployment was one year behind Scientific-Atlanta's DVR product.
Last week, Time Warner Cable announced it had reached 360,000 DVR subscribers, representing almost half of the 824,000 DVR units S-A has shipped since its inception.
Comcast is now testing the DCT 6208, and volume shipments are expected shortly. RCN Corp. has just deployed the DCT 6208 in New York City. But it's no secret that behind the scenes, cable MSOs that have relied on Motorola are anywhere from slightly annoyed to quite frustrated over this DVR's delayed arrival.
One MSO executive who walked through the Consumer Electronics Show pointed to the speed of innovation of companies like Sony Corp., Panasonic Consumer Electronics and Pioneer Corp. Panasonic was showcasing the OpenCable Applications Platform and other advanced products, this executive said, and Motorola was behind on getting its DVR out the door.
As late as September, Comcast Corp. — Motorola's largest client — said it expected to be deploying DVRs by year's end, but that launch date was been pushed back by a couple of months.
The problem? Some observers point to software integration problems, and even a few hardware bugs, as the cause for the delay. In Motorola's defense, it has to integrate software from several companies, including TV Guide. S-A, on the other hand, uses its in-house SARA guide, which cuts down on the complexity of its DVR integration issues.
S-A also had the benefit of Time Warner Cable's pushing the DVR concept more than a year ago, much faster than the Motorola-based MSOs.
"Some MSOs had a lot of other things on their plate," said Bernadette Vernon, director, strategic marketing, Motorola Broadband Communications Sector. "The DVR did come up quickly overall," she said, with much of 2002 focused on VOD and HDTV development, before the 2003 DVR wakeup call.
Some in the industry also point to the brain drain that started with the departures of Ed Breen and David Robinson at Motorola. "MSOs knew they could always call Ed to get things done," said one cable vendor observer.
"Ed and Dave knew how to get products on the street," another cable executive added.
There is also the view that the number of new set top models under development at Motorola has overwhelmed its ability to deliver each one on time and bug-free. (The company supports the DCT-1000, 2000, 2500, 5000 and 6000 product lines.)
"Our execution, at times, has not kept up with our ambitions," Motorola president and chief operating officer Mike Zafirovski said on the company's fourth-quarter earnings call two weeks ago, in reference to no particular product, but the assessment appears to ring true for the DVR.
"We definitely were later to the party with this feature," Vernon acknowledged, "but we're working very hard with MSO customers to get the hardware and software in there."
"The software had a lot to do with it," she continued. "There was a lot of testing. There were a couple of surprises that caused the slippage. This is a new technology. The goal is to have a very, very high quality product."
There has also been some criticism that the DCT 6208 is a single tuner DVR, not the dual-tune variety S-A has shipped.
"When the concept was first being discussed, there was a belief that the single tuner would be adequate and price increase wasn't justified [for the dual tuner]," Vernon said. "We're all learning from the marketplace at the same time."
Actually, in announcing the DCT6208, Motorola (and others) expected its DVR HD set-top would reach the marketplace sooner that S-A's HD version of its Explorer 8000 DVR.
Software delays caused both to hit the market roughly at the same time, late last year.
While Motorola hasn't officially announced the product, MSO sources say it also is working on a dual tuner DVR, slated for summer trials.
In addition, any set-top vendor also has to balance what new technology to chase. Motorola spent a lot of time and money developing the DCT 5000 interactive box years ago, at the behest of several key MSOs, all to no avail. Without a business model, the memory/processing power intensive DCT5000 box was ahead of its time.
Even 15 months ago, the penetration numbers from TiVo hardly foreshadowed a strong interest in DVRs among consumers. At the time, there was little urgency to move quickly on a DVR set-top.
But a better business model—leasing the DVR versus buying it and paying a monthly or lifetime fee – has been demonstrated by Time Warner Cable to make a big difference, as did News Corp.'s purchase of DirecTV and his launch of DVR on Sky last spring.
With all that water under the bridge, Vernon said Motorola is ready. "We feel really good about the product. We're in volume production and everyone is in the process of launching."
Not a moment too soon, for many MSOs.
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