By Ray Bennett

Once upon a time, a certain cable company issued a “…request for assistance in building a full service telecommunications network.” What did they mean by full service? This: “traditional CATV services, full VOD with instant access, interactive television, interactive gaming, long distance access, voice, video telephone, and personal communications services.”   The year was 1993, and this RFA was part of what was known in the industry as the Time Warner Cable FSN (full services network) project.

A full sixteen years later, “VOD with instant access” means choosing from the service provider’s library AND from whatever is on the consumer’s digital video recorder (DVR). Loyal fans of network shows expect to be able to catch missed episodes by time-shifting with their PVR or viewing them online. Cable companies all offer very competitive consumer voice packages and maintain more than 50% of the high-speed connections in North America.

However, cable companies are now threatened by a shift in subscriber behavior, altered by the world outside of their television – a veritable explosion of services and applications. There is a sense that the industry has under-achieved on its interactive dreams and that the time to remediate this under-achievement is now. 

A Familiar, Yet Quieter, Threat

In 1993, there was an emerging competitive threat to the cable industry. Direct-To-Home Satellite service providers were demonstrating success as they headed toward their first million subscribers. This all-digital platform in the sky had the potential to deliver a far-superior viewing experience to the analog one-way video networks that the industry operated.

experience of social networking applications that define the new universal experience.

The reason that this behavior threatens the business of traditional pay-TV providers is that it points to a change in the amount of time spent “leaning back” as opposed the time spent “interacting.” Each of these services is fundamentally interactive; they were developed by people who take interactivity – and the interactive capabilities of their medium – for granted. Interactivity, although pursued by cable companies for a long time, has not been their strong suit. In a recent article from The New York Times, the author summed it up this way: “Apple designs an innovative smart-phone, sells millions of them, creates the App Store and approves 25,000 separate applications,