Tap to watch: How near field communication could transform the pay TV business
If engineers at Comcast (Nasdaq: CMCSA), Verizon Wireless (NYSE: VZ) and Turner Broadcasting get their way, viewers will soon be able to access pay TV content by tapping a smartphone to a cable set-top, remote control or connected TV containing near field communication chips.
When NFC emerged a decade ago, it was seen as a replacement for credit cards. Early adopters include Samsung and Visa, which embedded an NFC payment system in Galaxy smartphones, and the city of San Francisco, where drivers can tap phones to an NFC reader on parking meters to pay for a space.
ESPN parent Walt Disney Co. (NYSE: DIS) recently began selling action figures containing NFC tags. Consumers playing its new Disney Infinity game on the Xbox, Play Station or Wii can transport characters such as Mr. Incredible from "The Incredibles" into the game by placing the $13 action toys on an NFC-enabled launch pad.
Cable programmers like Disney aren't yet using NFC to authenticate which subscribers should get access to encrypted programming. But Broadcom engineer Mohamed Awad said he thinks NFC could make it easier for consumers to access personalized programming and even allow his toddler to turn on the TV and watch Netflix (Nasdaq: NFLX) content by tapping his Nintendo Wii U game controller to a connected TV.
"You could argue that TVs are getting better, but it's still really complicated," said Awad, who manages Broadcom's NFC business, noting the number of steps viewers must go through to watch some of their favorite shows on TV. In addition to authenticating subscribers, NFC could allow operators to deliver targeted programming and advertising to a TV using the profile of the viewer who taps a mobile device to the TV, remote or set-top. NFC could also be used to send electronic coupons to the mobile devices of TV viewers, he added.
Canadian cable operator and wireless phone carrier Rogers Communications (NYSE: RCI) is the only pay TV provider that is an NFC member. But its principal members include AT&T (NYSE: T) and Verizon Wireless, the latter of which has partnered with Comcast, Time Warner Cable (NYSE: TWC), Bright House Networks and Cox Communications to market bundles of pay TV and wireless voice and data service to consumers in dozens of markets.
Verizon has also teamed up with Comcast and Time Warner Cable to create a joint innovation lab focused on developing next-generation products for cable subscribers and smartphone users. While the companies have said little about the products they are developing, in March, Comcast said in a job listing for "director of product management mobility solution" that it is looking to develop "magical experiences that move seamlessly across all of your digital devices."
Comcast officials declined to comment when asked if NFC technology is one of the products the companies are developing at the innovation lab. "We view NFC as a technology with many different applications," said Verizon Wireless spokeswoman Debi Lewis. Recent patent applications filed by Verizon and Comcast show how the companies are looking at using NFC to do everything from authenticating mobile devices for TV Everywhere content to pairing devices with Comcast's Xfinity Home security and automation service.
Comcast, Verizon disclose NFC innovations
In a patent application published Aug. 1, Verizon notes how it could use NFC to make it easier for subscribers to access pay TV content on smartphones and tablets by relying on NFC chips in set-tops. "When a user wants to watch television through the set-top box device, the user may bump the user's smartphone device to the set-top box device to initiate an NFC transaction. Based on this NFC transaction, the CPE device may modify one or more operational settings such that the CPE device is configured to operate in accordance with a set of settings associated with the user," Verizon states in the patent application.
Comcast disclosed in a recent patent application how NFC may be able to help it introduce new advanced products for its home security and automation service. Today, subscribers who buy its Xfinity Home product must pair devices such as carbon monoxide sensors and security cameras by using a Web browser to pair each device to their home networks. But subscribers could use a remote control containing an NFC chip to pair devices by simply tapping them with the remote, Comcast wrote in a patent application earlier this month titled "immersive user experience."
In June, Comcast announced at The Cable Show convention that it plans to begin selling energy efficient "smart light bulbs" for use with its Xfinity Home service through a deal it struck with lighting manufacturer Osram Sylvania. Comcast details in the patent application how NFC could even make it easier for subscribers to change light bulbs. "When a light goes out, a user can 'touch' the new light to the old light and the new light will 'clone' the old light. The old light can then be switched out with the new light," Comcast said in the application, adding that the same approach could be used to pair smartphones and tablets capable of controlling a TV. "If a user wants to use a second remote control on his system, gets a universal remote, or even wants to allow the user's phone/tablet to control a TV… a similar RF [radio frequency] / NFC method as described above could be used to clone the pairing info into the new device."
According to ABI Research, at least 285 million mobile and consumer electronics devices containing NFC technology will be shipped worldwide in 2013. The research firm expects that the number of NFC-enabled devices will top 500 million next year.
NFC-enabled devices in consumer homes today include connected TVs from LG and Sony as well as Android smartphones manufactured by Samsung and Blackberry.
Verizon NFC technology
Apple (Nasdaq: AAPL) hasn't yet supported NFC with its popular iPhone and iPad. But the company disclosed in a patent application last week a method that would allow an iOS device user to send an electronic gift certificate for the iTunes Store to another user by tapping NFC-enabled devices. The filing indicates that Apple may add NFC chips to new versions of its iPhone and iPad.
ABI practice director John Devlin said he sees a potential for cable and telecom companies to integrate NFC technology, and he noted that it would likely cost set-top manufacturers $1.20 to $1.60 per box to add NFC transceivers to the devices.
Time Warner Inc. (NYSE: TWX) has been one of the biggest proponents of TV Everywhere services such as HBO Go, and it was also one of the first cable programmers to offer authenticated subscribers the option of watching live feeds such as Cartoon Network through Web browsers and mobile devices. Finding an easier way to authenticate subscribers has been one of the biggest challenges for Turner and other cable programmers, which require subscribers to enter account info from their pay TV provider before accessing TVE content.
Three inventors at Turner Broadcasting recently filed a patent application which details how automatic content recognition and NFC technology could be used to ease TV Everywhere authentication. The document explains how a subscriber would be able to authenticate a smartphone or tablet to access encrypted TV Everywhere content by tapping the device to another device that has been authenticated.
Verizon has explored the idea of taking advantage of biometric devices implanted in consumers to monitor heart rates and other vital signs for use in an authentication platform. A smartphone containing an NFC chip would be able to authenticate the identity of a user by monitoring the biometric device, according to Verizon. "The user's smartphone device may use this data to authenticate the user to a service and/or service feature," Verizon states in its patent application, titled "near field communication transaction management and application systems and methods."
Awad said he's bullish on the prospects of media and telecom companies integrating NFC with their products. But he said he wouldn't expect services that rely on biometric devices implanted in humans to emerge any time soon. "I think there's a lot of opportunity to get creative. But people need to be comfortable with the technology," he added.