Jim Chiddix, president of AOL Time Warner's Personal Interactive Video Group, speaking at last week's Society of Cable Telecommunications Engineers Emerging Technologies conference, told of the next challenge facing cable operators and its possible rewards.
Combining Internet protocol and MPEG (Moving Picture Expert Group) transport schemes in the next generation of cable networks will present far-reaching opportunities for MSOs, Chiddix said in a keynote address at the gathering San Jose, Calif.
"This is a new professional challenge," Chiddix said, perhaps answering his own rhetorical question: Why aren't he and his colleagues spending more time on the golf course these days?
The challenge of creating a new transport network that will allow for point-to-point personalized video services that go far beyond today's video-on-demand deployment, is high on Chiddix's agenda these days.
Today's hybrid fiber-coaxial networks can provide four to five gigabits of data per second to every node, he said. "That's a huge amount of capacity. It's a great transmission system with great business models behind it. That will take us a long, long way into the future."
But today's MPEG-based video network can do much more, Chiddix contends. Although he said VOD is an "interesting" new revenue stream, movies-on-demand are relatively expensive, at $600 per stream. With peak usage rates at only 4 percent to 5 percent, that works out to $30 per user.
By storing a tremendous amount of content in servers throughout the network, operators can achieve higher bandwidth efficiencies and better peak usage rates that can justify the costs of personalized on-demand services, he said.
Chiddix sees a world in which an MSO would store movies at the headend, as well as thousands of other pieces of video, along with each program delivered on each broadcast and cable network today.
Leaving copyright and other content provider/MSO distribution agreements aside, Chiddix believes consumers would pay for a drastic leap forward in content personalization — the ability to scan thousands of program offerings, or call up favorites shows with TiVo-like functionality stored in the network.
Such network-based server technology could be deployed now using today's set-tops, he said, and perhaps achieve peak usage penetration rates of 30 percent or more. If so, "our costs will be substantially cheaper," Chiddix said.
Server-complex costs would be spread across the entire subscriber base, reducing the $600 per stream cost to $150 per stream.
If peak usage rates in a personalized video world were to approach 50 percent, the cost would drop to $75 per stream, Chiddix said, far below today's cost of including hard drives in set-tops to provide similar functionality.
"This is a business driver that will push new network technologies," he said. Likewise, IP transport schemes will have to evolve. "The DOCSIS [Data Over Cable Service Interface Specification] network has been enormously successful," Chiddix said.
Chiddix said there is a need for the industry to think beyond the advances with DOCSIS 1.1 and 2.0. "DOCSIS 2.20 will run out of steam. We need to put effort into the next generation of DOCSIS," he said, "that will afford the ability to change channels and offer two-way audio and video services."