CableCard devices aren't new: Such TVs and digital video recorders have been available since 2004, and renting a card from your cable provider typically costs about $1.50 a month. But though 8 million devices have been sold, fewer than 260,000 homes with cable used CableCards as of March 2007, according to the National Cable & Telecommunications Association.
The technical limitations mentioned above--and cable industry intransigence--are likely to blame for the low adoption rates. Without the lucrative PPV and VOD revenue streams, cable companies have little incentive to promote CableCard devices, says Harry Wang, a research analyst for Parks Associates.
Two-way CableCard devices are coming. Panasonic and Comcast are testing a two-way TV set, which should be in retail stores in 2008. Samsung is preparing a two-way DVR that it will distribute via Cox Cable. But no retail versions of two-way set-tops had been announced at this writing.
The reason? Two-way boxes depend on a software standard called the Open Cable Application Platform, which is tied to the set-top box's interface. All two-way devices must support OCAP, so third-party providers such as TiVo and Digeo can't incorporate two-way capability without losing a big advantage: their cool interfaces. For now you'll have to choose between a user-friendly third-party box (with no PPV or VOD) and a possibly less-interesting two-way box from your cable provider. (Or you can pay for both.)