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VOD needs some lovin'

Bryan Burns, the VP of strategic
business planning & development at target="_blank">ESPN, blew through town last week to provide an interesting
and informative update on high-definition television (HDTV).
The sum takeaway: It's gonna be freakin' huge. Hence, the
reason why ESPN has poured so much effort and money into ESPN
HD, ESPN2 HD and its monster digital facility in Bristol.



One tidal trend Burns had to share was this: the ratio of
HD-capable sets versus SD-only sets sold will even up sometime
in 2006, then be overtaken by hi-def.



But what I also found interesting was a slide that showed
how consumers "love" some devices and services over others.
Survey results from Arbitron and Edison Media Research released
earlier this year showed that 54 percent said they "love"
using their digital video recorders—no surprise there.
Right behind it was HDTV, at 44 percent. Other chart toppers
were high-speed data (40 percent), satellite radio (40 percent)
and the iPod (35 percent).



So where was VOD? Right there near the bottom of the heap
at 10 percent. Only Internet radio and Internet video scored
lower on the love scale.



Given that data, HD-VOD seems to be the obvious love connection
that will help VOD get some much-needed affection. Cable operators
are certainly dabbling in HD-VOD, but the big complaint is
that there's not a lot of hi-def content available to put
on the servers.



Rainbow Media just launched a stand-alone HD service under
the Voom umbrella, but, cable bandwidth issues aside, is focusing
on carriage for its entire package of linear channels, and
doesn't appear to have any near-term intentions of making
programs available on VOD. Calls to Rainbow on the subject
were not returned.



But what ESPN, ESPN2 and ABC are planning to do with the 2005
World Cup (all 64 matches in HD) creates a tremendous opportunity.
And love isn't the appropriate word for what those supporters
think of "The Beautiful Game." Mania, coupled with obsession
and a heavy-handed sprinkle of lust—that sounds more
like it.



By the same token, it could be a huge opportunity lost because
it's unlikely that those games will be offered on-demand,
unless there's a big push for it and the rights get worked
out with FIFA and other requisite parties. Cable operators
should be fighting for this.



And it would be a shame if the games aren't available on-demand,
considering the time zone difference with Germany. As a soccer
fan, I would be happy to impose a personal media blackout
as to avoid seeing the scores and then queuing up the games
on VOD when I get the chance. People with HD-DVRs can record
the games, of course, but these matches, shown in all their
hi-def glory, will fill up hard drives faster than you can
say, "Goooooaaaaaal!"



—Jeff Baumgartner



src="http://testced.cahners1.com/xod_capsule/images/ff_title1.jpg"> color="#950000" size="3" face="Verdana, Arial, Helvetica, sans-serif"> Real-time
encryption could break the limits of VOD

target="_blank">Harmonic Inc. has added real-time content encryption
capabilities to its VOD transport platform, a move that should
make advanced on-demand applications like network-based personal
video recording a much easier proposition for operators.



width="250" height="160" align="right" vspace="3" hspace="3" border="1">That platform,
based on the company's Narrowcast Services Gateway (NSG),
will offer the encryption via Privacy-Mode conditional access
technology from target="_blank">Motorola Inc. The capability also enables the company's
IP-based edge QAM devices to integrate with multiple conditional
access systems and set-top boxes, Harmonic said.



Although today's pre-encryption systems provide plenty of
security, they also limit the capabilities of VOD. Real-time
encryption, a mainstay of international cable systems, will
leverage new edge QAMs and take VOD to another level, according
to Gil Katz, director of cable solutions for Harmonic's Convergence
Systems Division.



"To deal with pre-encryption is an operational nightmare,"
he explains. A cable operator that pre-encrypts content for
Motorola- and target="_blank">Scientific-Atlanta–based systems, for example, must
store at least two copies of every piece of on-demand content.
If the operator uses video servers from different vendors,
each with its own technique for trick play files, the system
becomes just that much more complex.



In addition to making VOD less complicated, real-time encryption
will be required for the nPVR and applications like "startover,"
a technique that target="_blank">Time Warner Cable is testing that enables viewers to time-warp
their way to the beginning of a show. Without that real-time
encryption, a show can't be offered on-demand until it's over
and then made available on the VOD system.



Another option that's that not really an option, lest the
cable industry decide to offer VOD without any studio support,
is to offer the shows in the clear.



Katz said Harmonic's real-time encryption system is undergoing
trials and lab tests with "four big MSOs," with deployments
starting this week. Katz expects at least 50 percent of markets
that use NSGs to adopt real-time encryption in the next six
months. The upgrade requires only a new software load to the
NSG, he said, noting that real-time encryption is also cheaper
than pre- encryption.



Today, Harmonic's Privacy-Mode component does not work on
Scientific-Atlanta systems. Harmonic built an implementation,
but has not obtained the appropriate license from S-A, Katz
said.



"But [Motorola markets] are more significant for us," Katz
said, explaining that Harmonic has 100,000 QAMs deployed in
Motorola-based systems.



SeaChange plays software card

target="_blank">SeaChange International is putting its software strategy
into high-gear.



In the wake of a spending slowdown that hit the company hard
in Q2 (overall revenues dipped 39 percent to $26.2 million
in preliminary results issued last week), SeaChange said it
will push ahead with the decoupling of its backoffice VOD
platform, attempt to strike up its international set-top middleware
business, and emphasize new on-demand applications such as
gaming.



SeaChange attributed its Q2 drop-off to a "temporary" slowdown
of VOD system spending by U.S. cable operators and slower
than anticipated VOD deployments by telco customers.



width="94" height="108" align="left" border="1" vspace="3" hspace="3">In a call
with reporters and analysts last week, SeaChange President
& CEO Bill Styslinger said previous revenue projections will
be lower, "but we still believe that the second half of our
fiscal year will be stronger than the first half. And we think
that our business in the first half of fiscal '07 will be
better still."



On the middleware front, SeaChange will use the code acquired
from Liberate Technologies earlier this year, and combine
it with its VODlink product and licensed IPTV technology from
Minerva
Networks. SeaChange will focus on building its middleware
business outside the U.S., where there are many more opportunities
and fewer standard interactive program guides and middleware
combinations.



"We believe middleware is more than a $1 billion marketplace
over the next five years," Styslinger said, noting that the
business will enable SeaChange to get paid for every device
that uses it.



He also downplayed the competitive forces faced by SeaChange,
explaining that "timing issues" rather than VOD server rivals
were related to any problems encountered in Q2. SeaChange,
however, has lost some ground with href="http://www.timewarnercable.com" target="_blank">Time Warner Cable
to server maker target="_blank">Broadbus Technologies. On the call, SeaChange SVP of Corporate
Development Yvette Kanouff said past contract issues between
the company and Time Warner Cable have been resolved, "and
our position with Time Warner is better than it has been in
years."



Taking a page from companies such as target="_blank">C-COR Inc. and target="_blank">Tandberg Television, which acquired N2 Broadband earlier
this year, SeaChange is also unbundling its VOD backoffice,
dubbed Axiom, and began to generate some revenue from the
tactic in Q1.



"It gives us an opportunity to have our software in sites
without SeaChange servers, and an opportunity to have our
software stand on its own," Kanouff said, in separate interview
with CED. The move also aims to unlock the value of VOD software,
an asset with a worth that was not as apparent during early
VOD deployments, she added.



"We've been actively involved in open standards development,"
said Kanouff, href="http://www.cedmagazine.com/cedailydirect/2005/0605/cedaily050615.htm#1"
target="_blank">who was elected Chair of the North America cable industry's
standards body, the Society
of Cable Television Engineers, at the 2004 Cable-Tec
Expo in San Antonio.



SeaChange has yet to announce integrations with any third-party
server vendors, but that hasn't been the priority set by SeaChange's
customers, Kanouff said, adding that the company is busy hooking
into billing and OSS systems and network infrastructures.



"But we are absolutely prepared to [integrate] with multiple
server vendors," she explained.



But video server replacement or coexistence shouldn't be the
primary focus of "open" VOD systems discussions, Kanouff said.



"It doesn't mean that those open interfaces are being built
just for that," she said, noting that projects like Comcast's
Next Generation On Demand (NGOD) are not about replacing vendors,
but growing their networks for next-gen on-demand services
and using their bandwidth more efficiently. "They have bigger
goals to solve," Kanouff said.



TiVo makes more cable connections

After a long drought (who remembers
that old trial with AT&T Broadband?), target="_blank"> TiVo Inc. has been able to forge a few recent deals with
cable operators.



Last week bore witness to two—a trial with href="http://www.cablevision.com" target="_blank">Cablevision Systems Corp.
and a deployment with href="http://www.cequel.net" target="_blank">Cequel Connections.



Cablevision will use TiVo as a competitive weapon and test
market the company's standalone DVRs with wireless networking
routers to existing DBS customers. Instead of a telephone
return, the router will be used to obtain program guide information
and other data. Cablevision also supplies DVR-capable set-tops
from Scientific-
Atlanta, but apparently will play up the brand power
of TiVo to lure DBS subs.



width="275" height="140" align="right" border="1" vspace="3" hspace="3">"For many
satellite customers in our service area, there is significant
value in the TiVo product and brand," said Patricia Gottesman,
Cablevision's executive vice president of product management
and marketing.



Cequel, meanwhile, has agreed to market 80-hour TiVo Series2
DVRs to about 300,000 cable customers beginning next month.
A Cequel spokesman said the agreement is not exclusive, which
means Cequel can also deploy set-top/DVR combos from href="http://www.motorola.com" target="_blank">Motorola Inc.



Cequel is the second MSO to take TiVo up on a href="http://www.cedmagazine.com/cedailydirect/2005/0805/cedaily050801.htm#1"
target="_blank">new cable distribution strategy that targets more than
1,000 members of the target="_blank">National Cable Television Cooperative. Benton Cablevision
Inc. of Rice, Minn., was the first. TiVo also has a separate
deal in place with Comcast
Cable.



TiVo's foray into cable can't come a moment too soon, especially
as target="_blank">word leaks out about
DirecTV Inc.'s forthcoming target="_blank">NDS Group-powered receiver/DVRs. Reportedly, those devices
will come with features such as a 90-minute buffer, electronic
bookmarking, and TV-based caller ID. There's also talk of
a "VOD" capability, meaning the box will probably record a
PPV film linearly and cache it on the hard drive for anytime
viewing. DirecTV, as you might recall, embarked on something
similar under the subscription-VOD umbrella with Starz!, whereby
the DVR would flag and record certain titles on the lineup
automatically.



On the financial front, TiVo notched its first profit ($240,000)
in Q2, but that corner turn will be short-lived. In Q3, the
company expects to post a net loss of between $20 million
and $25 million. Its reliance on DirecTV for new subs was
again evident in the quarter—214,000 of the 254,000 added
in the quarter came way of the DBS giant. The same can be
said for 2.3 million of its 3.6 million subs.



itaas simulates VOD

target="_blank">itaas Inc. has launched a simulation platform to help
operators and vendors week out problems and determine capacity
loads well before deploying video-on-demand in the field.



itaas has not yet announced any customers for the VOD Session
Simulator, which can simulate the live environment of "hundreds
of thousands" of set-tops posing as DSM-CC (Digital Storage
Media -Command and Control) clients to the Digital Control
System/Session Manager which sets up and tears down interactive
sessions.



Presently the system is outfitted for cable systems based
on the Scientific-
Atlanta digital platform, though one for target="_blank"> Motorola Inc.-based systems is also in the works, a company
spokesperson said. The system is designed to work with multiple
video server and VOD system suppliers.



As a stand-alone product, VOD Session Simulator doesn't have
much competition. target="_blank">Tandberg Television, however, provides VOD simulation
testing as part of a larger set of services.



Akimbo plays ball

target="_blank">Akimbo Systems hopes its latest content deal will be
a big hit with baseball lovers.



Stepping away from the "long tail" of niche content and closer
to the mainstream, the company has signed a deal to offer
condensed games and highlights from target="_blank"> Major League Baseball.



width="150" height="88" align="left" border="1" vspace="3" hspace="3">The agreement,
made with MLB Advanced Media (MLBAM), gives Akimbo the ability
to provide the content in the "early morning" the day after
the games. Akimbo will also archive games of note, including
perfect games, playoff games and World Series games. "What
makes this special is that sports fans will be able to get
their daily baseball fix on-demand on their TVs, directly
from MLB Advanced Media," said Akimbo CEO Joshua Goldman.



Akimbo got off the ground last year via a $199.99 broadband-enabled
standalone player capable of storing up to 150 hours of standard-definition
programming. The service runs about $9.99 per month. The company
will soon launch a version of the service that works on Microsoft
Media Center PCs. Akimbo's longer-term strategy is to href="http://www.cedmagazine.com/cedailydirect/2005/0705/cedaily050726.htm#2" target="_blank">
forge content partnerships with cable operators and
other service providers.



Digeo: The Sony annex?

target="_blank">Digeo Inc. has poached the executive ranks of href="http://www.sony.com" target="_blank">Sony Electronics again, this
time naming Greg Gudorf as president and chief operating officer.



Gudorf most recently served as VP of television marketing
at Sony, and played a direct role in the launching of Sony
Passage, a platform that enables cable operators to run a
second conditional access system alongside the incumbent's.
At Digeo, he will oversee the company's day-to-day operations,
with an emphasis on product delivery, process improvement
and integration with MSO headend systems. Digeo said its previous
COO, Bert Kolde, will continue to lead the company's sales
and marketing team.



Earlier this month, Digeo tapped Mike Fidler as CEO. Fidler
was the SVP of Sony Electronics' home products division before
joining Digeo, the company behind the Moxi Media Center and
a range of interactive television and navigation software
products for set-top boxes.



"As Digeo continues to grow as a business and expand its customer
base, we need a dedicated focus on operations to make sure
we don't miss a beat. I have worked with Greg for many years
and have seen first-hand his ability to drive superb execution,"
Filder said, in a statement.





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We are making changes and
additions (including several international deployments) to
our target="_blank">Web- based "living" deployment chart. If
you have a new deployment to report for the VOD Scorecard
and the Web-based deployment chart, please contact CED editor href="mailto:jbaumgartner@reedbusiness.com" target="_blank"> Jeff Baumgartner.