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THE CABLE SHOW - Finding direction in D.C.

Thu, 04/30/2009 - 8:35pm
Mike Robuck, Senior Editor; Jim Barthold and Jeffrey Krauss, Contributing Editors; and Brian Santo, Editor

Cable marshals its resources in the nation’s capital.

Though the cherry blossoms were in bloom in Washington, D.C., the reason for plunking Cable Connection Spring down in the nation’s capital was something short of aesthetic: The show was a big lobbying tool. By the count of one NCTA mole, well over 200 members of Congress had accepted invitations to tour the show and learn about the cable industry first-hand – many for the first time ever.

That’s face time that can be gained in no other way, in no other place, and is of no little import when the government’s plan to spend $7.2 billion on broadband infrastructure is warranted by the current administration to be just a start on communications policy.

Politics aside, there was plenty of business conducted during the show – the mash-up of The Cable Show, the withered remnant of the SCTE Emerging Technologies show, CableLabs’ Law & Technology Seminars and the WICT Leadership Conference (along with a small handful of other cable industry events). Canoe Ventures debuted, and if tru2way were hardware instead of software, attendees would have been constantly tripping over the stuff.

Aside from advertising and interactivity, the other big theme was “cutting the cord” – customers ditching video subscriptions in favor of online video. As a phenomenon, cutting the cord is only barely less theoretical than superstrings, but the industry was still compelled to discuss the incipient menace. Session after session got drawn off topic to address the issue.

Observations from Time Warner Cable CEO Glenn Britt pithily represented the cable industry consensus on the subject: He repeated his observation that “free wins,” but also noted that there’s very little free video out there now that wasn’t free before – mostly from broadcast television stations, and even that doesn’t linger long before it is no longer available for streaming.

Yes, Netflix and Amazon and other companies are making content available, but it’s not free and, Britt noted, it still has to go over someone’s pipe, and that someone more often than not is a cable operator.

OVER THE TOP
Still, $45 a month for broadband is less than $90 a month for broadband and video.

It’s an irony of broad(band) proportions that the cable industry, whose cable modem business herded consumers to the broadband Internet space, has to guard against online content availability adversely affecting its bread-and-butter programming business.

“We can’t stop people from consuming content on other platforms,” said David Zaslav, president and CEO of Discovery Communications, during a last-day general session.

While the session primarily looked at Canoe Ventures’ interactive advertising effort, the topic inevitably wandered to the Internet and its impact on cable. Some have said that content piracy is the biggest concern because much of the available programming is not authorized, but Zaslav said that’s not the case.

“I don’t think piracy is a big issue,” he said. “There’s just an overwhelming amount of not-pirated content, free content, out there.”

Discovery is disinclined to put its long-form content on the Web for free consumption, Zaslav said, but other programmers are less queasy about moving on-air material to on-IP.

“On the broadcast side, we’ve been a little more aggressive in getting our content online; on the cable side, we’ve been a little more conservative,” said Jeff Gaspin, president and COO of Universal Television Group. It makes sense to do it that way, he said, because broadcast content is already free, and when placed on the Web, it actually draws viewers back to the television.

Cable programming, meanwhile, is a subscription service, so there should be more caution about offering up for free what others pay to see on TV, especially since advertising dollars don’t match what’s available on television.

Rupert Murdoch
Murdoch

Rupert Murdoch, chairman and CEO of News Corp., has fingers in both sides of the content pie – broadcast and cable – as well as in a third piece: print. He’s not a big supporter of the Internet as a viewing platform, he said in a keynote, during which he observed that newspapers are currently struggling with an analogous problem of maintaining profitable business models while simultaneously offering up their content for free on the Internet.

“It’s sad,” Murdoch said. “People are getting used to getting everything on the ‘Net for nothing. That’s got to change.”

News Corp. sells online subscriptions to its Wall Street Journal property and blocks content search aggregators from grabbing material and disseminating it for free. Cable MSOs, meanwhile, could do something similar – not by charging for online content, but by making sure that those accessing it are already paid subscribers.

In fact, Comcast is launching a national authentication test this summer to make certain that those who view its programming online are authorized Comcast subscribers. The trial will use a form of subscriber authentication to determine the viability of the viewer and the source on which the content will be viewed.

Stephen Burke, COO of Comcast and president of Comcast Cable Communications, said the process requires a form of authentication – and that might require a new set of software and/or back office technology.

In a different session, Comcast vice president of strategic BSS Jim Anthony explained, “We have to start turning our systems inside-out almost … by looking at the broader view of customers.”

Jeffrey Bewkes, chairman and CEO of Time Warner Inc., said it’s not enough to play defense against over-the-top video; cable has to go on offense, leverage the brand awareness it’s built and put its content on the Web now.

“We’ve been trying to nurture these brands so we have a viable business,” Bewkes said. “All of these cable channels are important to viewers and artists, [and] this industry can now deliver that on broadband and on your mobile device. We’re all too slow to take all these networks and put them on [the] PC.”

Bewkes, too, supported the subscription model for offering content only to consumers who are also subscribers.

Murdoch agreed that should work. “Nobody can make any money with free content on the Web except search,” he said. “The American people are still in love with television … and broadband only adds to that.”

It may be appropriate to have this discussion before the subject becomes a true problem. The problem of online content drawing away viewers – authenticated or not – probably isn’t that serious right now, said Michael Fries, president and CEO of Liberty Global, during the “Prime Time in the Global Village” session.

“Online video is having a very minimal impact on TV viewership,” he said. Viewers, Fries insisted, want “high-quality” content displayed on big screens with high-definition, not computer or mobile screens.

A big constituent of the pile of money to be made will still be advertising, and that’s where Canoe Ventures comes in.

Arthur Orduña
Orduña

CANOE RAISES ITS FLAG
The “Techniques and Technologies for Targeted Advertising” session was notable as the “coming out” party for Canoe Ventures and was spearheaded by Canoe Ventures CTO Arthur Orduña. For the first time in public, Orduña spoke specifically about the Canoe Ventures architecture, but his “eye chart” of Canoe’s Common Advanced Advertising System (CAAS) was difficult for most of the casual observers to comprehend due to its complexity and small display size.

In a nutshell, the purpose of the CAAS is to steward advanced advertising campaigns and interactive programming between programmers, broadcasters and agencies to MSOs and service operators.

The CAAS comprises three main components:

• Advertising stewardship – enables national organizations to manage sales cycles, and it includes building a campaign manager.

• Subscriber information service – a primary data warehouse and platform aggregate from all of the CAAS and Canoe intelligence that interconnects with third-party intelligence.

• Distribution services – simplifies the process of digital ads across multiple MSOs, complementary to existing delivery and service fulfillment services.

Orduña said that the CAAS will be operational this year and that Canoe Ventures’ first interactive campaign is also slated for this year. During another panel, Canoe Ventures CEO David Verklin said a community addressable advertising offering will be released by Canoe Ventures in the next four- to six weeks.

In another advertising-related session, “Advertising’s Great Enabler: Unleashing the Power of the Set-Top Box,” moderator Dennis Kneale, from CNBC, probed the panel about the value of Canoe Ventures and interactive TV technologies such as EBIF and tru2way.

With cable companies raking in only about 10 percent of the $182 billion North American advertising market, Mike Eason, Canoe Ventures’ chief data officer, said addressable ads will increase revenues for broadcasters, programmers and cable operators while serving up targeted ads that consumers want to watch.

“We’re going to start to have advertising based on demography instead of geography, which is going to be pretty neat,” Eason said in reference to the upcoming launch of Canoe Ventures’ community addressable advertising offering. “We’re actually going to be able to look at a national footprint and split up ad copy across that national footprint.”

Bill Harvey, TRA president and co-founder, said that while the Internet does provide accountability in terms of the number of clicks on an ad, it doesn’t show whether a consumer followed through on a purchase. Canoe Ventures will be able to show whether a viewer followed through on a purchase after viewing an addressable advertisement, providing a metric on ROI that the Internet can’t match.

Sean Bratches, executive vice president of sales and marketing for ESPN, said his company has been behind iTV for years because its brand and consumers align well with interactivity.

ESPN is currently working on three iTV applications, which are slated to launch sometime this year, that will utilize advertising overlays. ESPN will use EBIF for a voting and polling application that will let viewers interact with ESPN shows such as “SportsCenter” and “College GameDay.”

A second ESPN EBIF application is called “ESPN In Game,” which will enable viewers to get more information and statistics on players and games during live events.

ESPN is also working on a TV version of its “My Bottom Line” feature from its Web site, which will let viewers create their own bottom line, or customized content, for shows they’re watching. Bratches said My Bottom Line will rely on the more advanced tru2way technology, which means it will need newer digital set-top boxes and a wide base of tru2way deployments before it can become readily available to viewers.

As for Kneale’s question about whether customers want interactive applications, TRA’s Harvey pointed out that there were more votes for “American Idol” via cell phones than in the last presidential election.

Kneale also brought up the question of how Canoe Ventures’ participants, which include the nation’s top-six cable operators, will divide up the revenue pie. Bratches voiced his concern over third-party advertising that causes viewers to leave the ESPN brand and said the “big details” of how the revenue is going to be split need to be worked out, but that it was in everyone’s best interest to do so.

Joan Gillman, Time Warner Cable’s executive vice president of media sales, said people should think about what the cost would have been if each cable operator had put its own interactive infrastructure in place versus the one-stop shop of Canoe Ventures. Gillman said Canoe Ventures is more than just advertising – it’s a service bureau with a lot of operations mixed into applications.

“Canoe is more than just the app that launches on the platform,” she said. “It’s solving pretty serious operational issues, so it’s cost effective.”

Speaking on the targeted advertising panel, Mitch Weinraub, Comcast Media Center’s executive director of products and services, said companies such as eBay, Facebook and YouTube are successful because of the “massive connections” with their audiences. In order for cable advertising to be successful, it needs the same type of reach and connections and not the walled garden approach of early Internet service providers such as AOL and Prodigy.

In addition to working with broadcasters and ad agencies, Weinraub said the cable industry needs to increase its connections from cable operator to cable operator, as well as with competitors, in order to reach a mass audience.

The session also was the forum of one of the more amusing presentations during The Cable Show. The Comcast Media Center’s Dan Holden, a Comcast Fellow and chief scientist, outlined a strategy for enabling trick file advertising.

During fast-forward on a DVR, Holden showed how to overlay advertisements while the original ads were speeding by in the background. The trick file ads can be generic in nature, or even better, specific to an event that the consumer is watching at the moment, such as a sports-related ad during a basketball game. The ads can also come across in a picture-in-picture format.

While subscribers may be surprised to see ads while they’re fast-forwarding through the original ads, Holden said, with tongue firmly in cheek, they are requesting alternative ads when fast-forwarding.

“Most importantly, you don’t have to train consumers because they already know how to fast-forward on their DVRs,” Holden said. Moderator Yvette Kanouff, SeaChange International’s chief strategy officer, called Holden’s paper, “You can run but you can’t hide.”

Secretary of Commerce Gary Locke, wielding the scissors – joined, from left, by Craig McCaw (Clearwire), Pat Esser (Cox Communications), Johnathan Rodgers (TV One), Brian Roberts (Comcast), Tom Rutledge (Cablevision) and Michael Willner (Insight) – opens Broadband Nation at The Cable Show. The ribbon-cutting ceremony took place on April 1.

QUALITY MATTERS 
The discussion about over-the-top video had an adjunct: Most of the free content, and much of the streamed stuff, is of limited quality. Cable operators still have the advantage that video quality is one of the most important factors to cable subscribers.

During the session “Quality Matters: Assuring Performance Across Multiple Platforms,” Comcast Media Center senior vice president, COO and panel moderator Gary Traver cited a CTAM Pulse study that found that 82 percent of those surveyed for the report, titled “Future Shapers and Makers: An Examination of Consumer Segments,” listed quality of service as the most important factor.

Asha Kalyur, Cisco’s marketing manager, said during her presentation on video assurance that 83 percent of problem costs are related to poor video experiences. Truck rolls for unhappy video customers not only eat into a cable operator’s revenues, but they can also potentially drive customers into the arms of a competitor.

Dave Higgins, Comcast Media Center’s vice president of quality assurance, cited a study by MRG Research that said 40 percent of customer churn was related to video quality issues.

Higgins said there were eight critical touch points that can lead to video impairments, any one of which can cause ripples farther down the video chain into customers’ homes.

“In the old days, we could measure quality of service with bits and BERs,” Higgins said. “Now we need different metrics.”

The CMC tracks QoS metrics across markets and by channels, and it also uses subjective analysis.

Kalyur said cable operators need an end-to-end video assurance platform to reduce truck rolls and isolate domain problems quickly. By using a unified dashboard instead of six separate screens, cable operator employees can isolate video impairments faster, and potentially stop them before they reach a viewer.

Cisco’s S.V. Vasudevan, director of cable video architectures, spoke about how the cable industry can “steal” the work that has already been done by the enterprise market on data centers. Data centers can handle chores such as authentication of users, where the content is going, and to which devices.

Michael Adams, Tandberg’s vice president of application software strategy, took Vasudevan’s concept a step farther by recommending that content management systems work in conjunction with content delivery networks to deliver video across the various platforms – such as mobile, PCs and TVs.

Bringing up the subject of quality, of course, begs the question of how to support high-quality video and still squeeze more down the HFC pipes. The SCTE Emerging Technologies conference is always ready to visit the issue of bandwidth management.

EMERGING TECHNOLOGIES
Arris director of intellectual property engineering Carol Ansley reported that streaming media (YouTube, NBC.com) packets are now coming in short, sharp bursts rather than (as was the case a year ago) continuously – possibly to take advantage of big buffers in client devices. Comcast’s “PowerBoost,” which bumps transmission speeds to initiate the transfer of very large files, is a product that compounds the issue.

Comcast senior vice president Richard Woundy talked about delay-sensitive applications (VoIP, games) and delay-insensitive applications (P2P) and reported on delay management protocols under development at IETF, including Low Extra Delay Background Transport (LEDBAT), which measures one-way delay and slows down transmissions when delays occur.

Accedian Networks vice president of marketing Scott Sumner talked about a variety of methods for load shaping and hierarchical QoS for business applications, including classifying packets (transactional packets get higher priority), filtering out “pollution” packets, rate limiting and traffic shaping to increase average link utilization and minimize needs to add new capacity.

Robert Howald, director of systems engineering at Motorola, talked about increasing high-end frequency on coaxial cable to 1.5 GHz. He noted that the high frequency cutoff on coax is determined by amplifiers and taps, not by the cable itself. He observed that there is increased distortion above 1 GHz, but asserted that modems can handle it.

Iger
Iger of Disney greeted conventioners.

As for finding additional bandwidth, he reminded operators that they can still implement 1024 QAM to create a total capacity of about 10 Gbps – comparable to GPON.
Cisco principal engineer Alon Bernstein talked about bandwidth management techniques: scheduling, admission control, load balancing, bandwidth reservation, deep packet inspection, bandwidth throttling.

In a separate session, representatives from Time Warner Cable and Cablevision talked about their plans to increase capacity.

TWC said it intends to go all digital and supply low-cost boxes for all analog TVs for free. Further, by ending analog and going from 16 QAMs to 24 QAMs, TWC expects to buy enough capacity for full simulcast of SD and HD.

Cablevision prefers digital simulcast for improving the QoE for all viewers. It eliminates delay and display glitches when tuning from an analog channel to digital, and vice versa. Other technology thrusts included server-based time-shifting, including MoCA in all new set-tops for home networking.

Cablevision also said it is planning on expanding its Wi-Fi build-out into downtown areas. It expects to allow cable customers to use Wi-Fi smartphones after authentication.

Of course, data flows in two directions.

UPSTREAM CAPACITY
John Ulm, fellow of the technical staff for Motorola Connected Home Solutions, talked about upstream use of S-CDMA (defined in DOCSIS 3.0). Motorola expects user-generated content to keep growing, to the point where upstream bandwidth requirements could range from 20- to 100 Mbps. Ulm explained that S-CDMA is more robust for dealing with impulse noise and ingress noise than A-TDMA, though he allowed that it is possible to use A-TDMA with legacy cable modems in the 24-42 MHz range and S-CDMA in the 8-24 MHz range.

Arris chief strategy officer Tom Cloonan discussed the use of upstream channel bonding as a way to respond to noise, including random noise, narrowband ingress noise and short duration wideband impulse noise. He said the use of bonded 1.6 MHz channels and 16 QAM modulation can provide higher upstream capacity compared with 6.4 MHz channels and QPSK modulation in the case of random noise or ingress, though the opposite is true in the case of impulse noise.

Arris (Ayham Al-Banna) talked about capacity increases that are possible using multi-carrier techniques such as OFDM for upstream. And Cisco’s Bernstein described the advantages of a less complex upstream scheduler than is now required by DOCSIS.

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