UP Front - October, 2007
Latest industry news and insights
Cox adds third feather to BigBand’s switched digital video hat
Cox Communications has joined the switched digital party by rolling out the technology with BigBand Networks in its northern Virginia system.
Cox is now the third feather in BigBand’s switched digital video (SDV) hat after previous deployments with Time Warner Cable and Cablevision. TWC plans to have SDV in place in more than half of its divisions by the end of the year. Cablevision’s deployment earlier this year was the largest single rollout of SDV to date for BigBand.
Comcast is conducting trials in Denver and New Jersey, and last month, it picked Arris’ EdgeQAM offering to deliver SDV, VOD and other services over a shared infrastructure.
While cable operators like the bandwidth savings of sending just the digital channels that are being watched in a neighborhood or service group, they have different approaches on how to use that reclaimed bandwidth. For Cox, one immediate payoff from SDV is adding more HD channels to its lineup.
“Certainly that is one of our key plays across the company, to get more HD on the air,” says James Kelso, Cox’s VP of video engineering. “Cox intends to substantially expand our HD capacity.”
Kelso says Cox is not divulging the number of new HD channels in northern Virginia for competitive reasons, but Cox President Pat Esser said earlier this year that the goal was to offer 50 additional HD channels by year’s end and 100 HD channels two years down the road.
Cox is also using tools from BigBand to select the appropriate channels for the SDV environment. Typically, niche content is switched since it’s not always being viewed by subscribers in a certain node, as opposed to network channels that are sent to most homes.
“When you have a robust solution, you don’t have to be as careful about what you’re doing,” Kelso says. “If I have a switched digital video solution that doesn’t affect channel change speeds and is pretty robust, then the decision on what to switch isn’t as hard.”
Kelso says Cox’s roadmap includes rolling out SDV in two more systems by the end of the year. And next year, Cox will look at sharing resources between SDV and VOD via eQAMs.
“On the data front, it’s unclear how big a benefit that will be over time, but there’s always a benefit to knocking down walls between services,” Kelso says.
Comcast plans to move TiVo software to Scientific Atlanta boxes, other platforms
TiVo says that Comcast has “agreed to fund significant additional development work to bring the TiVo service to other Comcast platforms, including Scientific Atlanta set-top boxes.”
This will further develop the TiVo-on-Comcast service, which the two companies have been delaying for quite some time now, and increase the distribution opportunities that TiVo will have available, the company says. Currently, about 25 percent of Comcast’s footprint is based on the SA digital platform.
TiVo, in its Q2 report, quotes Comcast as saying, “We will commence the TiVo rollout process shortly, which [we] will continue rolling out throughout the fall in Comcast’s New England Division, including metro Boston, southeast Massachusetts and New Hampshire.” The TiVo software will launch on Motorola STBs in Comcast’s New England division.
CableLabs DTCP-IP deal opens three-screen door
In August, CableLabs approved the DTCP-IP technology – for protection of cable content using IP for unidirectional and bidirectional digital cable offerings.
CableLabs made the announcement in conjunction with Paramount Pictures, Sony Pictures Entertainment, The Walt Disney Company, Warner Bros. and the Digital Transmission Licensing Administration (DTLA).
With DTCP (Digital Transmission Copy Protection) secure links among consumer electronics devices, cable subscribers will be able to access digital cable programming, including HD and VOD content, on consumer electronics devices and PCs via their digital home networks.
The approval permits CableLabs licensees – under DFAST, CHILA and DCAS – to protect PPV and VOD transmissions against unauthorized copying and unauthorized Internet retransmission while assuring the consumers’ ability to record broadcast and subscription programming in digital formats.
“The agreement we reached today addresses the highly complex concerns raised by the affected parties – cable, content and consumer electronics – and brings benefits to consumers,” says Richard Green, president and CEO of CableLabs. “Working together, we agreed on solutions that meet our respective business needs and serve the interests of consumers and content providers.”
“DTCP-IP for home digital cable products opens the door for increased flexible use of protected digital cable content, providing opportunities for cable operators, content owners, device manufacturers and, most importantly, consumers,” says Michael Ayers, president of DTLA. “This represents a real advancement for the protected home entertainment network.”
DTLA and CableLabs also agreed to work on several forward-looking provisions to help implement the new developments and facilitate new businesses models. One of those provisions included “copy-never” content, which DTLA will make available to cable operators with the same level of protection it adopts for Blu-Ray and HD DVDs.
NCTA proposes ‘tuning resolver’ to aid CE devices with switched channels
On Aug. 24, the NCTA sent a 76-page filing to the FCC outlining three solutions for two-way cable services and devices.
While saying that the OpenCable Platform was still the best way for consumer electronics companies and cable operators to offer two-way services, the NCTA also says that it’s willing to develop a “tuning resolver” to help consumer electronics devices receive switched linear channels.
There has been concern within the cable industry that switched digital video (SDV) won’t work with third-party STBs, such as those developed by TiVo. Unidirectional digital cable products (UDCPs) aren’t capable of accessing SDV channels.
In the filing, the NCTA says that it has worked with consumer electronics companies (it cites TiVo as one example) to find a solution that provides two-way SDV channels to one-way digital products through a small tuning resolver adapter. The resolver would require firmware modifications to new UDCP products and a USB 2.0 connection. The NCTA says current TiVo DVRs have USB 2.0 connections and may be able to upgrade with firmware for SDV.
The NCTA cites the OpenCable Platform as the second solution to providing two-way cable services. OpenCable already has consumer electronics companies such as Panasonic, Samsung and LG Electronics signed on.
The NCTA’s third proposal is a new network interface device for interactive services that would work across a wide variety of multichannel video programming distributor networks, and not just cable.
TWC taps TandbergTV for small-market VOD deployment
In order to provide VOD services to its small-market subscribers, Time Warner Cable is utilizing Tandberg Television’s OpenStream digital services platform.
With TandbergTV’s system, TWC can manage the VOD services from its headquarters in Denver and deliver content nationwide via satellite distribution. TWC will also utilize TandbergTV’s Xport Producer to provide local on-demand content tailored to each location.
Four markets — Clarksburg, W.Va.; Dothan, Ala.; Fort Benning, Ga.; and Terre Haute, Ind. — are now live, and the company plans to expand services to 10 additional cities by the end of the year, for a total of 14 deployments in 11 states.
Charter Communications and TWC have previously announced large-scale deployments of the OpenStream system.
The Federal Communications Commission has issued rules that direct cable operators to provide a viewable signal for every must-carry channel after the digital transition (Feb. 9, 2009) for their own analog customers; and extended for another five years the ban of exclusive contracts between vertically integrated programmers and cable operators.
The must-carry decision gives operators a choice “to either: (1) carry the digital signal in analog format, or (2) carry the signal only in digital format, provided that all subscribers have the necessary equipment to view the broadcast content.”
As a practical matter, cable operators can either transmit at least two versions (analog and digital) of every must-carry channel, incurring expense and consuming precious bandwidth, or buy a converter or new set-top for each and every one of their analog customers, also incurring expense. Approximately 35 percent of all television homes, or approximately 40 million households, are analog-only cable subscribers.
The new rules conform to a proposal made by the NCTA, whose members acceded to dual-carriage for three years after the transition.
Smaller operators – and only those with plants of 522 MHz or less – have the option to apply for a waiver, but The American Cable Association says its members will still be hard hit: “The new carriage obligations now make it more difficult for operators of small systems to stay in business....Some very small systems will have no choice but to shut down because their small subscriber bases cannot support the costly equipment mandated by this order.”
The Commission says it remains open to ways of minimizing any economic impact on small cable operators while still complying with the statutory requirements for carriage of local TV stations.
The second order, the FCC says, is meant to ensure competitive multichannel video programming distributors (MVPDs) continue to have access to essential programming by extending the ban of exclusive deals between programmers and MSOs. This keeps a company such as Comcast or Time Warner from denying access to channels they own to rival service providers.
The FCC says it will continue to review the related issue of program “tying” – when a programmer packages, or ties, a popular network channel to a set of other network channels, forcing the operator to broadcast additional channels that the operator (and its subscribers) might not want.
MSOs hook up with RHI for VOD movie premieres
RHI Entertainment is giving several top cable operators access to never-before-seen movies by allowing the original movies to premiere on the MSOs’ on-demand tiers.
RHI Entertainment signed early distribution agreements with Time Warner Cable, Bright House Networks, Cable-vision and Cox Communications.
While cable operators have long wanted to offer movies-on-demand the same day they are released to movie theaters, Hollywood has resisted to date. The deal with RHI, a large producer of made-for-TV movies, bolsters the cable operators’ VOD lineups.
A total of 24 original world premiere movies are being offered in the first year, with two new movies premiering each month. Cable TV customers will be able to choose from six RHI movies at any given time. RHI also lays claim to being the first company to produce and offer movies in both HD and SD for premiere on VOD.
After the movies premiere on the VOD platforms, they will become available for download on iTunes before cable networks such as SCI FI, Spike TV and Lifetime telecast the original movies in their broadcast/cable windows.
Thomson details chip for HD PVR set-top boxes
Thomson is preparing a high-end video decoder chip optimized for STBs with personal video recording (PVR) capability. The chip can be used in cable, satellite or IP boxes.
The chip, designated the 4230, will provide HD decoding for H.264, MPEG-2, MPEG-4 and DivX codecs, as well as SD streams. The company says the 4230 is able to output HD and SD video simultaneously.
The Thomson 4230 supports multiple security formats, as well as dual USB 2.0 and Serial Advanced Technology Attachment (SATA) interfaces that support PVR and DVR applications with or without a hard disk drive connection.
Verimatrix, GoBackTV team up for IPTV security
While large, established cable operators don’t see a compelling reason for full-scale IPTV deployments just yet, smaller operators and telcos are jumping on the IPTV bandwagon as a way to improve existing services or launch video for the first time.
So Verimatrix has hooked up with GoBackTV to develop a solution that bypasses the traditional cable modem termination systems (CMTSs) in an IP video architecture.
Verimatrix has integrated its video content authority system (VCAS) with GoBackTV’s CMTS Bypass offering to create VCAS for Cable IPTV. GoBackTV’s bypass product converts an existing cable system to an asymmetric IP network in order to deliver IPTV services.
GoBackTV’s GigaQAM IP
According to the two companies, by enabling IPTV on existing cable plants, operators can avoid costly infrastructure upgrades, reclaim bandwidth for new services and reduce costs by gaining access to a wide variety of IPTV consumer premises equipment.
“We saw a gap in the market for an alternative solution designed for operators that want to ‘turbo charge’ their digital cable video services without expensive infrastructure costs,” says Steve Oetegenn, chief sales and marketing officer at Verimatrix. “Whether you are a cable operator looking to upgrade or a telco wanting unified content security with your cable franchise, VCAS for Cable IPTV is a flexible and cost-effective solution that can be implemented today.”
GoBackTV provides the CMTS bypass hardware infrastructure at the headend. Multicast and unicast IPTV streams are delivered to off-the-shelf IP STBs directly through DOCSIS-compliant cable modems and EdgeQAM devices, bypassing the CMTS core processor entirely.
Verimatrix says its VCAS software-based content security is already integrated with more than 70 IP STBs, which would give cable operators more choices than they currently have with Motorola and Scientific Atlanta.
Verimatrix says VCAS for Cable IPTV fulfills the FCC’s separable security mandate, which requires the content security to be made available separately from the receiver devices. It’s compatible with both the U.S. DOCSIS and EuroDOCSIS
As part of the deal, Verimatrix is offering the integrated GoBackTV solution under its Verimatrix brand and will also provide installation, training and support on a global basis.
NDS aims to reduce STB, DVR energy consumption
NDS is aiming to reduce its carbon footprint and help digital TV subscribers reduce their energy usage by decreasing the power consumption of STBs and DVRs.
NDS has set out initiatives for this goal, which is in line with the global energy program of News Corp., NDS’ parent company.
The first initiative is an auto standby solution developed to automatically switch inactive devices into standby mode overnight. The standby consumption of an STB has been estimated to be 10 watts, the company says.
“Currently, an HD DVR can use as much power as a domestic refrigerator, and we want to address this,” says James Field, director of technology and new initiatives at NDS.
The company’s R&D team is working with STB manufacturers and platform operators to develop more solutions that can reduce STB power consumption.
Qwest lays regulatory groundwork for video
Qwest is laying the regulatory groundwork to offer video services in several cities in its operating territory, even as its plans for video service deployment remain vigorously tentative.
Qwest planned to have video available to 8 percent of its customers by the end of this year, and to 24 percent of its customers by the end of 2008. Qwest had identified Albuquerque, N.M.; Des Moines, Iowa; Minneapolis; Portland, Ore.; Salt Lake City; and Seattle as its targets.
Iowa, in May, enacted legislation that will allow for statewide franchising; that will cover Des Moines. Qwest’s recent attempt to secure a video franchise in Seattle was scuttled. Qwest may be closest to getting a franchise in Portland. The process there still has several steps to go, but the city could grant final approval as early as mid-November. And it looks as if Qwest will be utilizing fiber-to-the-node (FTTN) rather than to the home.
DirecTV taps Harmonic’s encoders for HD expansion
Cable and satellite operators are going toe-to-toe in the battle to offer more HD programming to their subscribers. Lacking a true triple-play service of their own, satellite providers such as DirecTV have made HD content, particularly sports programming, a high priority.
DirecTV will be using Harmonic’s HD MPEG-4 H.264 encoders for its national HD channel expansion effort. DirecTV has Harmonic’s DiviCom Electra 7000 HD encoder in its stable, as well as the ProStream 1000 stream-processing platform with DiviTrackIP distributed statistical multiplexing and the NMX Digital Service Manager.
“The Electra 7000 enabled us to provide superior video quality for the latest expansion of our HD channel lineup that will include up to 100 national HD channels by year-end,” says DirecTV CTO Rômulo Pontual.
Harmonic says that seven of the 10 largest satellite operators worldwide currently use its compression systems, and that the majority of these customers have also selected the Electra 7000 to power their HD H.264 services.
MoCA adds its first European MSO
CAIW of The Netherlands has joined the Multimedia over Coax Alliance (MoCA), becoming the first European cable MSO to join the alliance.
The operator offers TV, Internet and digital radio services in The Netherlands, where there is nearly 100 percent cable penetration.
“MoCA is the clear standard in the U.S. for multi-room distribution of digital entertainment and networking,” says Aart Verbree, CEO of CAIW. “This is why at CAIW, we believe MoCA could and should also work in The Netherlands and a substantial portion of Europe.”
Small Asian STB makers challenging market leaders
Traditional STB manufacturers remained the leaders in the worldwide market last year, but they are facing increased competition from lower-tier manufacturers, according to IMS Research. This competition added to the strong growth of the worldwide STB market last year, which saw an estimated 122 million units shipped.
French STB-maker Thomson held on to the lead position with double-digit market share, due primarily to its dominant position in the U.S. pay-DTH market and its entry into the European IP STB market.
Motorola nearly doubled its digital cable STB output compared with 2005, and the company has further extended its share lead over Scientific Atlanta. And Philips Consumer Electronics has ascended into the top five by supplying the continued growth of pay-DTH markets in Europe and Asia.
Lower-tier Asian manufacturers – such as DVN, Changhong, Huawei, Skyworth, Jiuzhou and Gospell – have moved into the top 20 by capitalizing on the growth of digital cable TV markets in China, India and other parts of Asia. These manufacturers are poised to challenge the top 10 STB makers in the coming years as the need for conditional access and security, and the demand for increased functionality, drives these local markets, IMS says.
“Some of the lower-tier manufacturers that barely registered on the radar a few years ago are now moving into position to capture the low-end STB market in the quickly developing digital markets in Asia,” says Connected Home Research Group analyst Mark Meza.
Market gets tricky as Cablevision buyout vote looms
Days after news dropped that a buyout of Insight Communications was on hold, another cable deal was bollixed, and for the same reason. The tightening credit market is undermining the financing of The Dolan family’s attempt to take Cablevision Systems Corp. private.
Cablevision has called a special meeting of its shareholders on Oct. 24 to vote on the Dolan family’s standing offer of $36.26 per share. But that deal is predicated on the Dolans’ borrowing more than $15 billion, which is becoming increasingly more difficult given current credit market trends. The key factor is rising interest rates on the debt the Dolans would assume.
Shareholders of record at the close of business on Oct. 4 will be entitled to vote at the special meeting, which will be held at Cablevision’s headquarters in Bethpage, N.Y.
First MSO enters business Ethernet market’s top five
Cox Business was the fourth-largest U.S. provider of retail business Ethernet services at mid-year 2007, marking the first time an MSO has reached the top tier, according to Vertical Systems Group.
Leading Cox Business were AT&T, with a 19.5 percent share of mid-2007 ports; Verizon Business, with a 15.8 percent port share; and Time Warner Telecom, with a 13.7 percent port share. Verizon’s share was up 12.2 percent, and Time Warner Telecom’s increased 10.7 percent, compared with year-end 2006 results. And although AT&T placed first, the company’s share declined compared with the combined year-end 2006 shares for AT&T and BellSouth, which the company acquired in December.
Cox Business held an 8.9 percent share. Behind the MSO were Cogent Communications Inc., with an 8.6 percent share, and Qwest, in sixth place, with an 8.4 percent share.
“As anticipated, competition in the business Ethernet services market heated up during the first half of 2007, resulting in considerable port-share fluctuation,” said Rick Malone, principal at Vertical Systems. “The dense availability of low-cost metro services boosted share for many regional U.S. Ethernet providers, including MSOs. Additionally, the aggressive deployment of new fiber infrastructure for residential applications enabled broader accessibility of native Ethernet services for adjacent business sites.”
Other MSOs in the market were Bright House Networks, Charter Business, Comcast Business, Suddenlink Communications, SureWest and Time Warner Cable. Other noteworthy companies in the market were Alpheus Communications, CT Communications, FiberTower, Level 3 Communications, Optimum Lightpath, RCN, Sprint Telecom, Sprint and XO Communications.
WideOpenWest, DirecTV top J.D. Power poll
WideOpenWest was tops in one region for customer satisfaction, while DirecTV was rated highest in three regions, according to a J.D. Power and Associates study.
In the north-central region, WOW! ranked highest for the second consecutive year with an index score of 729 points, the highest satisfaction score in the study and 21 points higher than the provider’s 2006 score. WOW! performed particularly well in the north-central region for all six factors driving overall satisfaction.
DirecTV took top honors in the eastern, western and southern regions. Although the satellite provider ranked highest in the 2003 and 2004 studies, 2007 marked the first year that DirecTV led in the western and southern regions, and the second consecutive year that it ranked highest in the eastern region since the study was changed to a regional one.
“The cable/satellite market has shifted to a service model based on the voice, video and data triple play,” says Frank Perazzini, director of telecommunications at J.D. Power. “As providers focus on putting this new model into practice, service reliability – which includes reception clarity and minimizing the number of outages – is critical in maintaining a satisfied customer base.”
The study found that as service options become more complex and multiple products are bundled into one bill with greater frequency, the importance of performance and reliability have increased considerably among cable and satellite customers – from 19 percent in 2006 to 24 percent in 2007. In addition, service reliability is the most frequently cited reason to switch carriers, with more than 80 percent of customers reporting that they would switch for this reason.
U.S. TV households rise 1.3 percent in 2007
The total number of TV households in the U.S. will number 112.8 million by Jan. 1, 2008, an increase of 1.3 percent compared with 2006, according to The Nielsen Company.
The number of viewers (ages 2+) increased 1 percent, to 286 million. One of the fastest-growing demographic categories was persons ages 55-64, which increased 3.9 percent. Young adults under the age of 50 grew by just 0.3 percent.
Many of the increases for local TV markets in Nielsen’s Designated Market Area (DMA) ranks are in the southern and western regions of the U.S., which is consistent with the U.S. Census Bureau’s most recent annual population estimates that indicate increased population growth in these areas.