Arris CPE chief Cheevers on how pay TV can take share from Apple TV and Roku

with Charles Cheevers, chief technology officer, consumer premises equipment, Arris

Cheevers

At the Arris booth at INTX last month in Boston, the company's chief CPE engineer, Charles Cheevers, envisioned a paradigm in which the sheer volume of data being piped into homes required more advanced CPE than ever.

Twenty feet over in the Comcast booth, the company was showing off a streamlined X1 set-top that didn't even have a hard drive. Indeed, with the FCC hot to regulate traditional pay-TV set-tops, cable operators talked at INTX last month in Boston about shrinking the pay-TV set-top down to nothing and delivering services virtualized into app form.

But to Cheevers's thinking, operators who deploy advanced set-tops with cloud, 4K and VR capabilities, along with robust user interfaces, will continue to see robust growth for video customers, not decline. Meanwhile, the proliferation of Wi-Fi will require robust support by extenders one hub will no longer be sufficient.

Here's what Cheevers had to say when FierceCable sat down with him at Arris' booth last month:

FierceCable: So many of Arris's cable operator clients are pulling back on video. Is the video set-top less important to Arris these days?

Charles Cheevers: From a CPE perspective, we see a couple of things happening. For operators, there's a recognition that you have to be at the top of your game. To grow your business and to grow subs, you have to actually put in modern UI, and services that are not just on the primary TV but also the apps they're associated with. If you track every operator who uses those apps, they tend to have the more positive growth.

FierceCable: How much market share is Arris losing to OTT device makers like Roku and Apple?

Cheevers: There's always been the threat of the over-the-top industry. But if you look at the reality of that market and how big that is, and you look at the pay-TV market, they're like night and day. I think the pay-TV guys have shown that if they put together good enough solutions, the customers stay with them, they'll continue to growth their business. If you don't get the equation good enough, people start to look for other ways to go a la carte or whatever. Generally, we're seeing that when they do it properly, the numbers are going up.

FierceCable: Is the pay-TV set-top going away?

Cheevers: The boxes themselves, the aesthetics of them, are changing to reflect the fact that if you make the box a little nicer, the consumer we'll look at it more favorably. But they're not going away. There's a transition in terms of the video model we have today — video gateway, broadband gateway, satellite devices. The broadband gateways are getting more complex because they're designed to offer better Wi-Fi and IoT attachments. The set-tops themselves are getting HVEC/4K. There's a ratio of increase on set-tops. They're increasing from 2.2 per home to nearly 3 because of the ease of install of the Wi-Fi piece of it. You take most of our homes that we have at the moment, we typically have a service provider set-top arrangement. Most people who have that have some other OTT arrangement, Roku or Apple TV or what have you. So that extra device is being targeted by the operators now who say, 'Why is the user using that device?' And they're using it because they have Netflix or they have YouTube, they want to maybe run a browser. If you take those functions and bring them into your experience, then you don't need the OTT box.

FierceCable: So you plan to steal market share from Roku and Apple TV?

Cheevers: You look to see your 15 favorite channels coming on, you flip over to your DVR, don't want to watch any of that, either. You try your Netflix, you try your YouTube. If nothing happens there, you just go back and just randomly watch some TV. So that experience is followed by many people who have pay-TV and OTT. And I think if you merged them together, people stay on your service, and they end up getting another box from you more likely than end up buying another Roku or Apple TV box.

FierceCable: And you're actually looking at growing your global set-top business?

Cheevers: On the set-top box, I believe there's going to be more of them. Even though the architecture is changing to all IP, and the hybrid gateway is being replaced by these smaller form-factor devices, there will be more of them, and the features that they have will include higher end stuff like HVEC and 4K. The money is shifting. There's going to be a better, higher end gateway that has additional functions like IoT. Better power Wi-Fi. It'll be more expensive, but it justifies its cost because the user isn't going to have to add their own router.

FierceCable: So you don't believe the home of the future will be powered by a single gateway that can do everything?

Cheevers: Because we're moving to a multi access point architecture, no operator currently believes it can be done with a single gateway anymore. It needs to be augmented with extenders. You need to support IoT, and you might need to support 60 GHz. You could envision in 20 years' time that every room would have a wireless hub in it, some micronode or some connection point for every device in your house, including the screen. It's gone from one Wi-Fi connection in the home to 1 1/2 pretty quickly. That's one of the big opportunities for our company.

Arris CPE chief Cheevers on how pay TV can take share from Apple TV and Roku
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