Home gateways will help MVPDs rule the consumer roost

Once seated in their easy chairs, people tend to get very lazy.

For pay TV operators--and for those who purchase their products--this is not a bad thing. Under the right circumstances, being lazy and zoning out at the end of a stressful day filled with too many distractions, too many devices and too many voices coming from too many directions is probably a healthy thing to do--as long as you snack on carrots and not potato chips.

The trick is to make this possible. For the traditional pay TV provider, that means accomplishing three things: providing easy-to-use technology; making it reliable; and, under most circumstances, trying hard not to gouge with the price.

When all three pieces form under a residential roof, the pay TV provider moves into the catbird's seat.

The problem has always been that multichannel video programming distributors, or MVPDs as we in the trade like to call them, have never put together all three pieces at once.

For instance, there has never been anything particularly convenient about set-top boxes, which most subscribers view as slightly less desirable than politicians in an election year. And, of course, there's the reliability factor, as anyone with a Wi-Fi home network knows. Finally, what can be said about pay TV prices that hasn't already been beaten more soundly than the Syracuse Orangemen?

One device, however, promises to change things so much that pay TV will go from endangered to empowered. Home gateways--call them video home gateways or multimedia home gateways (MHGs) or just home gateways--are the means by which MVPDs can consolidate multiple devices within a residence, giving consumers a way to watch television on TVs or, if they're so inclined, on tablets or smartphones or even PCs. MHGs can even enhance the value of set-top boxes.

Researchers at U.K. media consultancy Decipher believe MHGs will help drive consumers back to set-top boxes and away from OTT and cloud-based smart TVs. Remarkably, it's the convenience factor that's doing the driving, and it's the pay TV players who are in the driver's seat.

"The smart TVs have not made any effort to integrate on-demand with broadcast in their interfaces," Nigel Walley, Decipher's managing director, said in a story reported by Videonet. "The biggest and most damaging omission, in the battle against the STBs, is the lack of ability for smart TVs to offer DVR capability."

In short, if you need a set-top box to get the features you want from your smart TV, why not let the people with decades of set-top box experience provide it?

While Decipher's report was U.K.-centric, its message is applicable around the world, where IPTV, bonded to the Internet as it is, keeps subscribers in the pay TV world.

According to still more research, this time from IHS, pay TV providers know the value of MHGs and will flood the market with them in the coming years, with shipments reaching 9.6 million units in 2016. That means, in addition to shoving video from room to room and device to device, the pay TV guys will also have their feet in the doors to sell home security and whole-home energy management and e-health services based on the technological convenience of having a whole-home media experience.

One can only hope that, having reached a point of subscriber loyalty and with convenience and reliability in hand, price doesn't muddle the picture. Of course, if history is a true guide, it will. But for now, with two of the three pieces of the puzzle in place, the pay TV business looks like a good place to be for the foreseeable future.

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