I have to correct a misconception that’s going around. A couple of different numbers are being bandied about with regard to how much extra moola it costs to add CableCARD functionality into set-tops. TiVo has argued that the added expense is in the neighborhood of $20, while Motorola has pointed to a much higher figure around $70. This isn’t a case of Motorola exaggerating the cost for the benefit of its cable customers who’d rather not have to deploy CableCARDs and are arguing the point by showing how expensive the endeavor is. CableCARD is happening, and there is nothing to be gained by exaggerating its cost.
The difference between the $20 figure and the $70 figure is in what TiVo has to pay for in its own set-tops versus what the cable operators have to pay. TiVo only has to cover the cost of creating the CableCARD slot while operators are counting the cost of adding the slot plus the cost of the CableCARD itself. Put together, that adds up to about $70.
What does the added cost mean for consumers? We don’t know yet. But we are fast approaching the day when we’ll find out.
Stay tuned for more on CableCARD, including what Motorola has to gain from the spread of digital cable services even when it means the use of someone else’s set-top hardware.
You bring up a good point, but Comcast does charge for a second cable card. Before it was $1.50 per month, but I noticed that last month it jumped to $1.79. Even at a cost of $70, this means that the card will be paid for in less than four years. I think Time Warner is charging for the first cable card too. It’s also worth noting, that by fighting cable cards for years, the cable companies have enjoyed higher subscription fees by not having to deal with competition. In Alameda CA, Comcast charges $10 per month less than they do in San Francisco because they have to compete with Alameda’s local cable company. This extra $10 per month will more than offset their costs to open up their system.
This isn’t to suggest that I think cablecard is the right answer, it’s a lousy solution for everyone, but cable has been closed so far and if consumers want better products, than it’s to their benefit to see these systems opened up.
Davis, MSOs are all over the map in terms of CableCARD pricing. Comcast has different policies in different regions for example. Where I live all CableCARDs are free.