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Thoughts on Time-Warner DTV

2003-06-22 , ,

New York City is probably the largest and most lucrative single consumer market but that didn’t keep Time-Warner from blowing a lot of customer satisfaction on Friday night by hosing the Movie On Demand (MOD) feature of their digital television service. In our case, after we had purchased a movie and watched forty-five minutes of it. Calling their customer service number gets you to the usual shallow menu of numbered options where any regarding service delivers you to a recording that there is an outage for, essentially, all of Manhattan and the Bronx above 42nd street and most of the East side. No explanation and no time frame for restoring service. Nice job.

Time-Warner, if they are looking far enough ahead, know that Movies on Demand is just one of the dishes on a menu of pay per view and on-demand services on top of the monthly service fees. Missed an episode of Buffy? Watch it when you want for $1. Can’t stay up for your mysteries on BBC America? Time shift it for a $1. Don’t subscribe to HBO but want to see the Sopranos or Sex in the City? Sure, for $4 it’s yours. Want to see all of last seasons episodes? No problem, $40 and you have a month to watch it. What ever was broadcast you can see it at your convenience. It sounds like the pre-dotbomb Qwest commercials. Instead of feeling nickled and dimed, people will pay. They’ll pay because it’s priced just about right for the entertainment they are getting and it’s most of the convenience of Tivo without buying another box- the personal video recorder (PVR)- or another monthly subscription. Best of all you don’t have to leave your couch.

What that cable operator’s utopia depends upon is:

  • pricing
  • value
  • availability
  • reliability
  • customer satisfaction
  • It would seem, from this episode and from horror stories on popular boards like dslreports and Slashdot, that what the cable companies know about designing stable, highly available IP-based networks would fill a thimble. Without predictable reliable service available when and where the demand exists, they are not going to have happy customers. People want what amounts to “dialtone” from the cable company- it’s always there and you can assume it’s always there. There’s no technical or physical reason that the cable companies can’t repeat the Bells accomplishment except that doing it is costly and they either don’t value the new business enough to get it or are hoping that they can slowly grow into it, paying off the necessary investment as the market develops. That means they’ve already ditched three and four, so they’re going to have to make it on the first and second to prop up the last. And that is going to be a hard row to hoe.

    Unfortunately, it looks like Time-Warner isn’t getting it. Their pricing is reasonable but not exactly cheap- $4/movie, about the same as a rental- but the value leaves something to be desired. The number of movies is limited. This is probably imposed by cost, namely storage of the MPEG2 files each of which are likely in the 500-1600MB range. I estimate this size because it is unlikely that the movies are encoded at a resolution greater than that supported by the lowest set-top decoder, 720×480 (maybe even down to 480×480) with 65k colors and from my viewing I suspect they use a frame rate of 15-20fps. Another problem with the value proposition is what is presented was mostly not worth seeing in their first or second runs. That makes an impulse buy over take-out on Friday night less likely. The static, somewhat longer than monthly holding of the choices turns people away when they go there looking for something new. This is little more than a reformulation of pay-per-view when people really want a PVR.


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