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Broadlogic and Cable’s Analog Ghetto

Broadlogic announced a chip today that provides a high density solution for converting Digital Cable TV channels to Analog. It’s a slick solution but I don’t think it will see mass adoption. Here’s why.

Om Malik has an article today that provides a good background on the company for readers that have no idea what I am talking about. It’s also covered in the Wall St. Journal ($$$ Link). Read these for a background on what the problem is that the company is trying to solve.

The goal is to reclaim the spectrum used for downstream analog signals on the coax cable to your home  by compressing them into digital signals and converting them to analog signals once they reach the home. Cablecos like Comcast (CMCSA) and Time Warner (TWX) are forced to still use legacy analog transmission because many consumers use tuners built into TV’s and do not have a digital set top box to do the conversion. If transitioned to digital,  ‘ghetto’ analog spectrum could be used for more downstream Docsis broadband channels using Docsis 3.0 channel bonding. In short, FTTH-like download speeds (though upload speeds can’t improve much).

It will happen, just not in the way Broadlogic envisions it.

Why would Cablecos deploy a dedicated hardware solution based on Broadlogic rather than simply give their customers a dumb set top box for free? Cable companies would embed this functionality in the home gateway they currently deploy for Voice services. Unfortunately, once this hardware is installed it loses the flexibility inherent with a set-top box. If digital codec quality improves, a set top box can be swapped out by the customer. A home gateway screwed to the side of the home cannot.

More importantly, The Cablecos want customers to have a set top box in order to up-sell on-demand services that generate high margin incremental revenue. This is especially true at existing analog customers which are low revenue low margin subscribers anyway. Installing a box outside the home with the Broadlogic chip removes the opportunity to force customers to use a set top box.

My Verizon (VZ) FiOS TV service only generates the most basic analog channels in my home even though they have none of the spectrum constraints the Cablecos do. I suspect it is because they want this up-sell opportunity.

I think Broadlogic has a courageos technical solution to a problem that is already solved. The solution? Give everyone a set-top box for free. And up-sell a la carte services.

Discussion

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  1. Why is a settop box easily replacable, and a gateway isn’t? There are even models in which the gateway can have VOD functions, which are transfered analogue in the home. This only requires an RF remote (or a small device that translates an IR remote to some signal the gateway can receive). And I would envision a settop box with the main TV set, that includes this chip, to do analogue brodcasts over the in-home network…

    Posted by PanMan | November 7, 2006, 7:00 AM
  2. A little more info.

    Broadlogic is quoting out $300 ASPs for their chip, which is insane. Finished hardware is typically 2-3x component cost, which would mean this gateway sells for $600 bare minimum.

    Not going to work.

    Posted by Andrew Schmitt | November 7, 2006, 3:17 PM
  3. Free set top boxes is not the answer. For most people this
    would be a mess. What about theft or loss of the boxes.
    Where do you put the box, how do you turn on/off the TV/VCR/DVR and what about the remotes. I like having lots of cheap remotes and not needing a set top for every TV. If every set has to have a box, then why not switch to the “dish”. I have Cable DVR box (and love it) and new HD TV and both are too smart. If you change the channel with the TV remote it switches the input to antenna input. Now the Cable/DVR remote will switch channels, but this input does not get to the TV until you reset the TV input to HD. This is not a simple task for most in the house and it can only be done with the a remote. It may cost the Cable company money to put in a gateway, but losing all monthly fees if someone switches to “dish” is a bigger problem. Why not have new “mini” set top boxes which talks to the gateway and does the VOD setup. This Box could also
    break out the Cable modem signal and improve the internet setup.

    Posted by George | November 8, 2006, 9:57 AM
  4. This is certain a step in the right direction but the real solution is not a digital home gateway or free set-top boxes. The real solution, I am afraid, is one which is obvious but which is not forthcoming, digital-ready televisions.

    In the old days, TVs couldn’t decode all of the analog cable channels. They worked great for broadcast signals but you needed a set-top-box to receive analog cable. Today, every new television is cable ready. You can connect a coax to it and it will decode the analog signals perfectly. In fact, it was cable-ready televisions that made cable such a success.

    Yet, there is not a similar push for digital-ready televisions. Would it be that difficult to include an MPEG-2 decoder in every television? We already have low-cost televisions with integrated DVD players. A digital tuner? How much would that cost, really? A smart card-based CAM system? Certain it is possible to build such a television.
    Why isn’t it happening? The tragedy of the anti-commons. Cable and satellite companies like their proprietary encryption schemes. For such a television to be affordable such encryption would have to be standardized or else television manufactures would have to license several mutually-exclusive decryption systems to ensure that the television will work with every cable and satellite company and this just isn’t feasible.
    Legislatively enforced compatibility with a single standardized CAM technology for all satellite and cable providers is pretty much the only solution to the remote juggle.

    Posted by hyzmarca | November 11, 2006, 8:24 AM
  5. We have this already. It’s called Cablecard. No one uses it.

    I suppose if Cablecard were built in to every TV, that might be something.

    The last thing that needs to happen is for the Government to legislate anything. It’s just TV. Life goes on without it.

    Posted by Andrew Schmitt | November 11, 2006, 3:10 PM
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  7. Broadlogic and Cable’s Analog Ghetto « Iain’s Chips & Tech | November 9, 2006, 12:46 PM