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from: MultiChannel News

Time Warner Ends ‘Unscalable’ Trial

By Tom Steinert-Threlkeld 2/2/2007

Let’s say you could watch 75 channels of cable television on your PC. Would you? No. At least 99% of the time.

Time Warner Cable said Thursday that fewer than 1% of the 9,000 customers to which it had been providing basic television service to their PCs actually watched any TV that way on any given day.

And it’s not like the residents in the Mira Mesa and Tierrasanta residential areas of San Diego didn’t have a chance to warm up to the idea of getting their TV service on their PCs. The test started July 8, 2005, and it was turned off Jan. 25 of this year, after 566 days of operation.

Which should give heart to operators and programmers of video services aimed directly at the family-room TV: Long-form television is not something the average American wants to view on a computer screen, said Peter Stern, executive vice president of product management for Time Warner.

“Perhaps that’s no huge surprise, but it was still reassuring to confirm that,” he added.

The test was open only to customers who subscribed to Time Warner video and Internet services. Conventional analog- and digital-TV signals were converted to streams of packets that adhered to Internet-protocol conventions at two hubs in the San Diego area and sent to trial participants around the clock.

Basic-TV subscribers were entitled to view 15 channels, primarily local broadcast signals, while expanded-basic subscribers would receive the normal fare of mainstream cable programming, ranging from Fox News Channel to Discovery Channel to ESPN to MTV. More than 90% of the participants were expanded-basic subscribers, able to watch the normal gamut of ad-supported cable programming.

Stern said the PC did not become a replacement for the television in participating homes. Instead, the channels that came into their PCs were used almost as a second thought. Viewers who used the service might be working on their computer in their office and trying to keep on top of a live sports event, like a baseball game, or the news, through a cable news channel.

“A channel like CNN or Fox can often be an ambient background channel,” he added.

The other common condition that would propel usage of a PC as a second screen in a household would be a timing conflict. If one person is watching CSI, a second American Chopper and another wants to watch Grey’s Anatomy, then the PC might get thrown into the mix to add viewing capacity.

In effect, the PC would become the TV of last resort, Stern said.

Still, Time Warner believes the trial was a success. The company learned that it could deliver 75 channels of TV to viewers through their Internet connections.

But the company shut down the test because it knew from the beginning that its technical approach to delivering TV to PC users in San Diego could not be used on a mass scale.

In its test, Time Warner had to install a device called a transcoder for every channel. Each transcoder would convert one analog or digital channel that was going out to TV viewers into IP packets that could be sent to the PC viewers.

And it would have had to add 75 transcoders in every advertising zone in which it wanted to deliver TV programming to PC users in order to expand into a commercial service.

“This is not a scalable approach,” Stern said.

So even though Time Warner shut down the San Diego experiment, it assigned video engineers in Westminster, Colo., and data engineers in Herndon, Va., to come up with a better approach.

But the MSO has not determined when it might try to improve on what it tried out in San Diego, Stern said.

Whenever that is, the new approach is likely to try to more directly meld short-form video content that can be pulled off the Internet with the scheduled half-hour, one-hour and longer programming of TV channels, he added.

In the meantime, Time Warner is delivering TV-like services with individual, short shows pulled from the Net to viewers. The company’s high-speed-Internet service, Road Runner, is operating a video-clip, preview and trailer service in the Akron, Cleveland and Columbus areas of Ohio and in Bright House Networks’ Tampa and Orlando systems in Florida.

And cable-system operators and programmers can breathe a sigh of relief. As a result of this test, “we happen to believe broadband [Internet access] is not likely to be a substitute for linear cable TV” for mainstream American households, where families tend to watch eight hours or more of television per day, Stern said.