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which have been downloaded by users more than 800 million times. Cable is about to roll out an application that can change channels. It’s working really hard to deliver weather and stock quotes sometime real soon now.” 

In January of 2009, Samsung and others unveiled Internet-enabled TVs for “widgets” - allowing the owner to select weather and other services from widget makers like Yahoo! who create apps for the Internet@TV service to be delivered to the TV using an ethernet connection.

When the threat of losing subscribers outright to competition from satellite was perhaps the greatest, cable companies were able to change the game. DOCSIS was the cable industry standard that equipment vendors marched to and cable operators deployed, allowing the operators in North America to gain at one point a 70% market share for high-speed Internet access. Bundling this “data” service with video offers has improved both customer retention and ARPU. 

While the most recent threat seems less about losing subscribers and more about eroding ARPU, changing the game again seems to be within reach of cable operators, thanks to their strategic investments in plant rebuilds and their new technology commitments.

Among the technologies that are uniquely available to cable companies is tru2way, and its less advanced cousin, EBIF (enhanced TV binary interchange format). Tru2way delivers a standard technology platform – hardware, software, and set top middleware architecture on top of which MSOs and third party developers can create interactive digital cable services. By the end of this year, the projection is that more than 20 million deployed set top boxes will be tru2way or EBIF capable, representing somewhere between 25 and 35% of the market. This technology creates an application platform that will allow operators and third party

interactive launches. Those lessons, as stated by the FSN team, included:

1. Interactive Services must be layered on top of the existing business model so that they do not detract from the total value of services delivered to the customer
2. Certification of interactive applications to ensure that they don’t disrupt existing applications is critical
3. Interactive services  require a different communications model than on-demand services

Apple seemed to heed these lessons when launching their App Store two years ago. The key difference between the late 90’s and today is the change in consumer expectations and their behavior. If we accept that the key difference is consumer behavior, then it’s logical to say that the key differentiator is the customer experience. Ten years ago, we talked about homes passed and subscribers. Today, we talk about “customer relationships.”.  Consumers view every service more personally, and they expect customer service to improve as technology improves.

Let’s look at these lessons learned in the context of 2009.