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Dealing with the Cable Bandwidth Crunch, Strategies Differ

Author: Phil Miguelez, Director, Access Network Architecture

The growth in demand for unicast services—high-speed Internet and VOD—is both a gift and curse for cable operators. More demand means more opportunity for revenue, but it also means more strain on cable networks. Across the board, North American MSOs see downstream bandwidth running out in the next one to two years if no action is taken. That’s right, not running low, but running out. Of course operators won’t actually let that happen, but the pressure to upgrade networks is real, and strategies for dealing with the bandwidth crunch vary from system to system.

Analog is a bandwidth hog, and the decision to keep analog channels going exacts a price on the operator’s network. Comcast has made headlines with its transition to all-digital cable delivery to free up analog bandwidth, and the operator expects to complete the process nationwide by the end of the year. Part of Comcast’s motivation is the fact that it’s maintained a mostly 750 MHz cable plant. At the other end of the spectrum, Cox upgraded to 1 GHz years ago and has thereby been able to hold onto its analog channels, a competitive strategy designed to lure those subscribers who still own several analog TV sets. The recent introduction of new high-power RF hybrids are making the idea of a network upgrade to 1 GHz much more attractive by virtually eliminating amplifier moves and re-spacing. 

Time Warner Cable is somewhere in the middle between Comcast and Cox. With an 870 MHz plant, Time Warner has relied primarily on switched digital video to cut its bandwidth demand. Its transition to an all-digital network is on a much slower pace than Comcast, but with SDV, Time Warner can save bandwidth by keeping select channels switched off when they’re not in use. Charter’s following an SDV path too. It started an aggressive rollout of the technology last year.

Across all MSOs, node splits are still a favored method of increasing bandwidth to individual subscriber service groups, and splits will continue in the future as a normal course of business. However, operators will also keep looking for new methods to reduce the bandwidth crunch; methods that don’t strain their budgets. For that, new ways of thinking and new technology innovations are in order. Because downstream bandwidth demand is going nowhere but up.

Motorola Mobility Announces Second-Quarter Financial Results

Motorola Mobility reported net revenues of $3.3 billion in the second quarter of 2011, up 28 percent from the second quarter of 2010. Mobile Devices net revenues in the second quarter were $2.4 billion, up 41 percent compared with the year-ago quarter. In Home news, net revenues in the second quarter were $907 million, up 2 percent compared with the year-ago quarter. Motorola Mobility maintained its leadership in key markets with set-top shipments up more than 10 percent as compared to the year-ago quarter.

Home highlights:

· Introduced Motorola Televation™, a broadband video device enabling consumers to watch live TV on a connected IP device anywhere around the home.

· Launched the Medios Xperience platform which enables operators to merge video content with social networking, games and web-based content, and deliver more interactive functionality with broadcast television and video-on-demand services.

· Selected by Time Warner Cable to develop a video gateway platform capable of delivering an advanced in-home entertainment experience and announced the DCX3600M, Motorola’s first video gateway device.

· Selected by ESPN to transition all programming for ESPN and ESPN-2 networks to an MPEG-4 HD format using Motorola’s video distribution solution.

More information on earnings can be found here.

TV News Round-Up

There’s lots of TV news making the rounds today, and interestingly, two of the three headlines below include Netflix. Is it any wonder cable companies are hot on OTT video for 2011?

Cable Industry Grooms Its Netflix Killer: Vutopia
By, Andrew Wallenstein — paidContent, Dec 7, 2010 6:30 PM ET

It’s trendy nowadays to challenge Netflix (NSDQ: NFLX), whether you’re Amazon or OnLive. Little did anyone know that the nation’s cable operators are already far along in development of a Netflix killer of their very own.

Meet Vutopia. Like Netflix, it’s a trove of hundreds of catalog movies from major studios accessible via TV and internet. In addition, it’s packaged as subscription VOD, which means one monthly price to watch all the movies you want…

Netflix Gets Hands On More Disney, ABC Shows
By Todd Spangler — Multichannel News, 12/8/2010 9:43:04 AM

Netflix has expanded the bucket of TV shows and movies from Disney-ABC Television Group it can stream to subscribers — including content from Disney Channel and now ABC Family — although the deal limits Netflix’s access to shows no sooner than 15 days after initial telecast.

The companies said the new licensing agreement adds “hundreds” of episodes to Netflix’s streaming queue from the ABC Television Network, Disney Channel and ABC Family. The 15-day embargo appears to be a concession to assuage Disney-ABC’s traditional cable, satellite and telco distribution partners…

Time Warner Cable Unveils Signature Home
Mike Farrell — Multichannel News, 12/8/2010 10:22:41 AM

Time Warner Cable took the cover off its much anticipated high-end service offering – Signature Home – a high-end package that includes more than 180 channels of video, 50 Megabits per second high-speed Internet service, phone and white-glove customer service.

Time Warner Cable began testing the service in Charlotte, N.C., in November. The launch comes shortly after Time Warner Cable unveiled a lower-cost tier, called TV Essentials, for more price conscious customers…

2011: The Year Cable Gets OTT?

If 2010 was the year for kick-starting TV Everywhere initiatives, 2011 may be the year cable really gets into an OTT frame of mind. First there’s the mad rush to integrate TV services with mobile applications. Comcast’s Xfinity TV app is getting a major promotional blast, and the momentum has pushed CableLabs to create its own version for smaller cable operators. While current app functionality is guide-focused, Comcast has already stated it’s planning to offer on-demand programming through the app in the near future. Verizon meanwhile (a cable provider for all intents and purposes), already has a mobile on-demand offering with the fledgling Flex View app, and says it will build in linear programming early next year.

Beyond Comcast and Verizon, Charter CEO Mike Lovett hinted this week that that the operator may be launching a new over-the-top video offering in the next several months. And Time Warner Cable CEO Jeff Bewkes has suggested that his company may consider offering HBO GO service (HBO over the Internet) direct to consumers in the future without a bundled cable TV package.

It’s no wonder the cable industry is moving to integrate OTT video. Netflix, connected TVs with app stores, and retail OTT boxes are all gaining prominence in consumer households. Even Microsoft is reportedly sniffing around to see if the prospect of launching a new OTT video service is feasible. Game on.

Is Look Back Service Network DVR?

Time Warner Cable announced this week that it’s taking the Look Back service out of field trials and into general availability. Close kin to Time Warner’s Start Over service, Look Back lets subscribers catch shows they may have missed up to three days after an original airing. The MSO is launching Look Back with 48 initial channels, 24 in SD, and 24 in HD. Included in the line-up are ABC and NBC, but not CBS or Fox. Notable cable channels include USA, CNBC, MSNBC, Showtime, and the Discovery Network.

Interestingly, the Time Warner Start Over service requires pretty heavy-duty ingest capabilities because the operator has take in the live program broadcast and spit it back out again immediately in unicast streams every time a “start over” request comes in. It’s not clear (to me) if the Look Back service carries the same burden, or if it’s essentially a VOD agreement with several networks to make their programs available for a period of time after airing. There’s no specific mention of starting a Look Back show while it’s still in live broadcast (say 15 minutes into the program), so this may very well be a VOD extension. But how should we really define these types of services now? We’re treading ever closer into network DVR territory where DVR and VOD merge. Is Look Back a form of VOD? DVR? nDVR? The lines are certainly blurring.