Analysis: Cisco-Vision To Be Revealed at CES

Authored by Paul Sweeting on December 30, 2008 - 2:18am.

After talking the talk for several years (and spending the dough), Cisco Systems will take its first step toward walking the consumer-electronics walk next month when it unveils a new wireless home stereo system at CES designed for streaming high-quality audio around the house. The most interesting bit of news in the New York Times report, however, may be the other home networking ideas Cisco is kicking around.

Such as this one:
While Cisco is building out its line of consumer electronics products to sell directly to consumers, it has other ways to profit from the growth of home networks. Its Scientific Atlanta unit sells set-top boxes through pay-TV companies, such as a video recorder offered as part of AT&T’s Uverse television service. It is splitting ad revenue with the media companies for which it runs Web sites. And it wants to develop technology with which Internet providers and media companies can sell new Internet-based services for a monthly fee. One example would let people store music and video on the Internet, rather than on discs or their own hard drives, so they could get access to it anywhere.

“Today your content is very tightly tied to a device,” [senior VP Ned] Hooper said. “Your music is tied to your iPod. Your games are tied to your PlayStation.” Cisco is pressing media companies to change their business models to sell more flexible digital rights to their content. “If I forgot to sync my iPod before I left home, I can connect in my hotel room,” said Mr. Hooper.

Sounds a bit like Cablevision System's network-DVR technology, in which programming designated by the user is recorded and stored elsewhere and then streamed back on demand. The only problem is, programmers hate the idea, and sued Cablevision to stop it. After winning at the district court level, the studios and TV networks were stunned back in August, when the U.S. Court of Appeals for the Second Circuit in New York overturned that ruling, finding that such remote storage and streaming does not violate U.S. copyright law.

The media companies have now appealed that ruling to the U.S. Supreme Court, which is yet to decide whether to hear the case.

From the Times' report, it appears that Cisco is hoping the legal controversy is eventually mooted by licensing agreements. But either way, the company could be well positioned to offer turn-key solutions for remote storage and streaming. In addition to owning Scientific-Atlanta, a leading maker of the kind of Internet-enabled set-top boxes such a system would likely depend on, it (along with Comcast) is also a major investor in Move Networks, which would likely give it access to some critical IP that other streaming service providers are likely to start bumping up against soon.

In which case, Cisco would likely have more to worry about from the cable operators than from the media companies.

Paul Sweeting

Paul Sweeting is the Editor of Content Agenda, a business-to-business brand dedicated to the nexus of content, technology and business. This piece was originally published on Paul's blog "Media Wonk" on Content Agenda and is posted on DMW with the author's permission.

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