Like a hanging curveball, high-definition VOD appears to be hovering there, waist-high, just begging to be blasted into the second deck.
Still, there are myriad technical and content-related issues that are preventing some cable operators from swinging the lumber with all of their might.
Although it's questionable how long that HD-VOD ball will sit there before someone else takes a whack at it and connects, it's abundantly clear that HD programming, particularly in the linear ballpark, is starting to hit the mainstream.
"Very few people come out of a store with anything less than an HD set," says Marc Tayer, SVP of marketing & business development at Imagine Communications, a company that is approaching the market with a variable bit rate (VBR) system that promises to save operators capacity, particularly for HD-VOD. With more than 20 percent of U.S. homes with an HD set, the segment "has zoomed past" the early adopter stage. "Consumers are absolutely starved for HD content, regardless of how it's delivered," he says.
But how well (or how aggressively) are cable operators positioning themselves to play a big role in how that eye candy is delivered? Generally speaking, it's a mixed bag, with some operators already in more advanced phases than others.
"Most operators have started already or are in the planning stages," says Basil Badawiyeh, VP of on-demand strategy for C-COR. "Frankly, they have to get started fairly quickly due to competitive pressures."
And that pressure is on. EchoStar already offers about 30 national HD channels, plus a range of local-into-local fare. DirecTV, while on par with most cable HD offerings today, is preparing to leapfrog everyone using capacity from new satellites. Depending on what actually becomes available from programmers, it hopes to offer 100 HD channels this year, and claims to already have agreements for at least 60 national nets.
Then there's the hi-def DVD market to consider. Although that segment has been hindered by a nasty format war, the emergence of hybrid Blu-ray/HD-DVD players should encourage consumers to snap up players without feeling the angst that they could make an incorrect choice and end up with an expensive, but obsolete, boat anchor.
But HD, in any form, is the "next battleground" for premium subscribers, Tayer says.
And cable is well positioned to take the high ground now with a differentiated product offering. Verizon can make the same claim, but cable can use HD-VOD to go where DBS and some telcos cannot.
"I believe that HD-VOD is going to become more important every day from now on for cable operators for competitive reasons and for subscriber retention and attraction," Tayer says. "I view HD-VOD as cable's next killer video application."
But who not only shares this view, but is also putting it to work?
Although Cablevision Systems Corp. was the first to get off the HD-VOD mark in 2003, Comcast raised the bar in 2006, ending the year with about 100 hours of hi-def programming. It expects to double that amount by the end of 2007.
In addition to a mix of pay and free movies, Comcast's HD-VOD palate also includes "quick turn" content from CBS. It has also supported special (and popular, it turns out) HD-VOD promotions, such as the one from Cinemax that offered every film in the Star Wars saga via HD-VOD.
Although Comcast is not saying how HD-VOD content is being consumed by any one market or node, it is averaging 250,000 HD-VOD views per month across its footprint, according to Gary Traver, the SVP & COO of the Comcast Media Center, which plays a central role in how VOD content is encoded and delivered to Comcast and other cable operators.
Rogers Cable, among the most aggressive with HDTV (it offers about 38 linear hi-def nets), recently kicked off its own HD-VOD plans.
Rogers soft-launched its HD-VOD service in December, offering 21 HD "titles," including a lineup of about eight feature films, as well as 13 HD assets from GalleryPlayer.
Like other operators, Rogers is also charging a premium for HD-VOD fare. While a new HD-VOD title runs $7.99, its standard-def cousin sells for $5.99. The MSO is also considering offering premium and free HD-VOD content.
Because Rogers is still early on with HD-VOD and in the soft-launch stage, the company doesn't have much data yet on how the service will affect usage.
"We are getting orders," says D'Arcy Hunt, Rogers Cable's director of TV product management. "And I'm sure we'll get a lot more," when Rogers beefs up its marketing behind the product, he adds.
Time Warner Cable, a spokesman says, has deployed HD movies-on-demand in most of its divisions, and is looking to expand the offering.
Bresnan Communications, meanwhile, is in the "planning stages" with respect to HD-VOD, according to Pragash Pillai, the MSO's VP of strategic engineering. "We've deployed quite a bit of broadcast HD, and we think that will drive the need for HD-VOD," he says.
He expects that Bresnan may embark on some HD-VOD trials this year.Tech issues touch capacity, QAM sharing
But operators must tread carefully with HD-VOD, a bandwidth hog by any measure.
Rogers, like other operators, is starting slowly with HD-VOD, but expects to increase stream capacity on an as-needed basis should demand require it.
And if demand for Rogers' linear HDTV offering is any indicator, it could be faced with that prospect.
Rogers just experienced a record year for HD-DVR deployments. These days, 20 percent of Rogers' digital homes have at least one HD or HD-DVR box. Rogers' systems are 50 percent penetrated with digital, meaning 10 percent of its customers presently have HD.
Although obtaining lots of HD-VOD content is a barrier unto itself, everyone agrees that the biggest impediment to the service is bandwidth and capacity, a challenge already faced by linear HDTV.
Generally speaking, a constant bit rate HD-VOD stream is about four or five times the size of an SD-VOD stream. In January, CableLabs issued the "safe harbor" MPEG-2 bit rate for HD-VOD, setting it at 15 Mbps–a figure that accounts for both the stream's video and audio content. On the latter, most is encoded in Dolby 5.1. In comparison, the safe harbor for SD-VOD is 3.75 Mbps.
Because those rates are considered safe harbor, they are not set in concrete. However, CableLabs said the level set in the specs marks the "optimal" bit rate for a given situation (i.e. a show with talking heads, versus a fast-moving sports event). "Success has been widely achieved using the 15 Mbps transport bit rate," according to the specs.
TVN Entertainment has been testing various bit rates for HD-VOD beyond the safe harbor number.
"It's something we have to be extremely careful about," says Dom Stasi, TVN's CTO, noting that operators have to give special attention to the capacity constraints of HD-VOD, but they must also be sure that the resulting picture matches with the quality thresholds expected by studios and other content owners.
While operators could get away with compressing SD-VOD signals because they were being delivered to standard-def sets, "this time [with HD-VOD], there is no trade-off," Stasi warns, pointing out that "low-definition HD contradicts itself."
Another potential bugaboo is the issue of QAM sharing. Depending on neighborhood makeups and general demographics, HD-VOD usage could be heavily concentrated.
The problem with current-generation QAMs is that they have to be used for specific services. One QAM might only do video, while others are used for data, VOD or digital simulcast. This situation, of course, has driven the development of the universal edge QAM, which can support all services that the operator might be offering and share available capacity across those services. Leftover capacity, therefore, could be applied toward a capacity hog like HD-VOD.
Imagine Communications hopes to ease capacity constraints with a variable bit rate system that has demonstrated the ability to support an extra HD-VOD stream in a 256 QAM. The company says it can cram in three HD streams and two SD streams in a 256 QAM without degrading video quality.
Imagine's approach separates the video processing via a component (aptly called the "QOD processor") from the multiplexing, which is handled by the "QOD gateway." Each VOD file is treated in a "pre-process" that is executed only once. Rather than coding a frame of video once at one bit rate, Imagine handles it at multiple bit rates and assigns a quality level to each macro block that is cross-referenced with the quality of the source video. With that heavy-lifting out of the way, the job of the statmuxer is relatively simple, Tayer says.
Imagine has not scored any deployments yet, but the company says it is in lab trials with two "major" MSOs that already offer HD-VOD. The company expects to be in a field trial this summer, with commercial availability of its system following in the fourth quarter of 2007.
Likewise, Imagine does not disclose specific equipment pricing, but believes its system can be deployed for less than $50 per stream, believing it's not much of a premium for an operator to pay when it means the system can contain fewer edge QAMs while also conserving valuable spectrum.
The storage and streaming requirements of HD-VOD also emphasize the benefits of being able to decouple those two important elements of the on-demand system, explains Tom Kennedy, director of product management for Motorola Connected Home Solutions, which recently acquired Broadbus Technologies. If HD is applied to a "Start Over" scenario, for example, the storage is fixed, but streaming numbers tend to fluctuate.
"As long as you have the server piece that can accommodate the right formula for streaming and storage, then it becomes a network capacity issue," Kennedy says.
In addition to issues related to QAM sharing and streaming capacity, operators must also consider HD-VOD's impact on the transport network as they are stretched to the limit with super-charged constant bit rate traffic.
Operators will have to go to 10GigE links, says Doug Jones, chief architect, cable, for BigBand Networks.
"From streaming off the server to the edge QAM, that capacity needs to scale up. It's serious stuff," he says.
The technical challenges of HD-VOD also extend to ingest systems, and older systems could create potential bottlenecks because they were not designed to absorb massive HD files, according to Kip Compton, senior director/general manager of Cisco Systems' video and content business division, which expanded its VOD efforts last year when it bought Arroyo Video Solutions.
"In terms of bandwidth, the ingest is actually five times more," Compton says, noting that operators, in some cases, will need to ingest the SD and HD version of the same movie or video title.
The Comcast Media Center has also had to be mindful of not only more VOD titles, but larger ones as well. While first-generation catchers could store 15 SD movies or four HD movies, the current platform can handle up to 100 SD movies or 25 in HD format.
As for lessons learned so far, Traver points out that the CMC has had to be careful to ensure that the syntax used by new third-party encoders works properly with set-top box configurations. Some set-tops, particularly older models, have not implemented the full complement of syntax in the MPEG-2 toolkit, he warns.
"We found that a small percentage [of set-tops] encountered some issues. We got them solved, and it's working everywhere as far as I know," notes Ray Milius, Starz Entertainment's SVP of programming operations. "Operators just need to be aware that once [HD-VOD] is launched, it's pretty routine."
In addition to variable bit rate technologies, advanced codecs could free up some previous capacity.
Because deployments can be targeted, HD-VOD is "a natural place" for cable operators to start introducing advanced codecs, Compton says.
But deploying them requires that the encoding and decoding stars align. While several MPEG-4 encoders are on the market, the set-tops are not yet in place. However, the specs for Comcast's "RNG" set-top line call for the support of MPEG-2 and MPEG-4.
"The availability of the CPE is what will determine the timing," Pillai agrees.But content is king
While getting the technology ready to accommodate HD-VOD is a challenge unto itself, obtaining content is quite another. And not all studios are ready to make the leap.
"We find that movies are the number-one requested program from our customers. We'll leverage it [HD-VOD] more and more as content becomes available," says Anthony Antonelli, senior director of marketing for Rogers Cable.
"We think [our HD-VOD effort] will have an early impact on our business. As a premium movie service, we're bullish on HD. We think it's the future of television, particularly pay television," says Ed Huguez, EVP of affiliate sales and marketing for Starz, which is supplying about 20 percent of Comcast's total HD-VOD offering.
Comcast is the first (and so far, only) MSO to secure an HD-VOD deal with Starz, though Starz is in discussions with other operators.
In Demand helped Comcast and Time Warner Cable get their initial HD-VOD products off the ground, but the amount of available HD-VOD titles remains relatively sparse versus the existing SD offering.
Presently, In Demand debuts one title per week in HD-VOD, with participation from studios such as Lion's Gate, Paramount, Dreamworks and Disney. In Demand also offers some free HD-VOD fare with its InHD Jukebox service, which features about 30 hi-def music videos at any one time. It also distributes hi-def clips from the Howard Stern program.
"We expect that [HD-VOD content] number to grow," says Jason Patton,
In Demand's vice president of business development. "2007 seems like a year where [HD-VOD] will hit a new level," as more studios jump on board.
And content distributors and aggregators are bracing for this expected growth phase.
In Demand, for example, is upgrading every step in its VOD distribution chain–from the pitchers on down the line. The company doubled its pitching capacity last September, and just doubled it again in recent weeks.
"We've got to make sure everything is five times bigger–to handle the HD flow," Patton says.