The march towards on-demand services and the growth of high-definition TV and its voracious appetite for bandwidth has video, voice and data service providers, particularly the cable industry, buzzing about switched digital video.
And for service providers in the competitive video, voice and data marketplace, the stakes are rising. Sixty percent of all digital cable subscribers have used video-on-demand services, a 25% increase over two years ago, while VOD orders are up 33% since 2005, according to a Leichtman Research Group report.
In addition, 82% of digital TVs are HD-enabled, while HD content providers are ramping up their production schedules for a flood of high-definition programming expected to hit the market in the next five years to keep pace with the 70 million HDTV sets projected to be sold by 2010, LRG added.
Mix in The Yankee Group’s annual revenue forecast of $145 billion for triple-play services by 2009, and it’s no wonder switched digital video is attracting attention as a crucial technology strategy aimed directly at the bandwidth issue.
|<p>Bandwidth Busters</p>||<p>Mining and managing bandwidth is a top-of-mind issue with cable operators and service providers. Here is a list of the current bandwidth-busting strategies being considered.</p>|
Re-claiming unusable channels.
Migrating systems from 64 QAM (quadrature amplitude modulation) to 256 QAM.
Eliminating analog pay-per-view channels, and supplying digital set-top boxes.
Deploying a two-step process of node splitting.
Expanding select RF systems.
Using advanced technologies such as switched broadcast and bandwidth saving codec compression platforms.
Deploying switched digital broadcast in select markets.
Migrating to MPEG-4 when fully operable.
“There is definitely an inevitable switch to switched digital,” said Vidya Nath, senior research analyst for digital media at analyst group Frost & Sullivan. “Companies such as Motorola [Inc.], Scientific Atlanta [Inc.] and others have started providing solutions for the bandwidth crunch. In the next 12 to 24 months we will see a swift transition to [switched digital] services.”
With switched digital, only the channels that customers are watching get passed to their set-top boxes, instead of all the channels a cable system offers.
Based on Time Warner Cable’s successful deployment of switched digital in Austin, Texas, and Columbia, S.C., and subsequent trials by Cox Communications Inc. and others, the technology is gaining traction with service providers intent on adding HD and VOD, while increasing broadband speeds and adding telephony, which is prompting a rush to efficient bandwidth and expansion strategies.
And the sooner the better, Nath maintained. “Leading MSOs have started putting the infrastructure in place to use switched video technology, which will help them manage the bandwidth over their existing HFC [hybrid fiber-coaxial] plant. They realize it is essential to adapt to this sooner rather than later. They seem to have a clear advantage of existing infrastructure and an array of options.”
The telcos, Nath added, have similar capacity issues, but with different strategies on how to address them. “They must adapt to more efficient DSL technologies or fiber-all-the-way. With more HD content and multiple TVs in households, the current bandwidth will be inadequate.”
The inflexion point for switched digital, most agree, occurred with the Time Warner trial, which proved the technology could be a viable, cost-efficient method of gaining and managing precious bandwidth.
“We have two systems in full production with a varied number of channels and it’s going quite well. The result of [switched digital] is a 60% efficiency gain, or 10 channels into six. As time passes, there will be more efficiency with more channels with switched digital broadcast. Unless someone is consuming 100% of the payload all the time, it’s very efficient,” Time Warner Cable chief technology officer Mike LaJoie said during the pre-opening session at the recent Cable-Tec Expo in Denver.
Cox, another large MSO, has also trialed switched digital, with similar results. “We ran trials two years ago in Texas with BigBand Networks and plan to launch it in one or two systems by the end of the year. [Switched digital video] is part of our overall strategy of opening up bandwidth for HD and VOD. It’s one of the levers we can pull as a technology to allow more bandwidth, and a very important tool to carry more content in the future,” Cox vice president of video technology engineering John Hildebrand said.
Switched digital allows customers to simply join an existing stream. Instead of switching all programs all the time, it takes advantage of hybrid fiber-coaxial architecture to fit about 300 digital broadcast channels into 100 digital slots, or about a 33% capacity gain.
HOW IT WORKS
By intelligently redirecting the signals, only the services customers want or are using will be occupied, and once switched digital technology is in place, higher bandwidth-eating services such as HD can be targeted at customers.
“Next year is the year of switched digital,” Hildebrand said. “We’ll have it up and running to most of our customers. As we switch existing channels, we make more room for HD in the broadcast mode. This year we may carry 30 HD channels, and next year 40. When we use [switched digital] we can then carry as many as we want. But it will be a gradual approach.”
Gradually moving to switched digital is a choice most service providers prefer, simply because of the lack of HD content and most just don’t know enough about it yet. And though other means of squeezing out more bandwidth for HD and VOD are in play, switched digital is considered to be the most appealing.
Other technologies to mine and manage bandwidth include reclaiming unusable channels; eliminating analog pay-per-view channels and supplying digital set-tops; deploying a two-step process of node splitting or expanding select RF systems.
But each has its flaws, making switched digital video the likely choice. “There are challenges like scaling, testing, channel blocking, return path issues and it must be accurately planned. But [switched digital] will be an important part of our strategy moving forward,” Hildebrand noted.
The benefit of moving forward with the new technology, said Biren Sood, vice president of product marketing and business development for BigBand Networks, which essentially invented switched digital video, is spectrum optimization that will offer service providers the bandwidth needed to carry HD, VOD and more.
“Once the switched infrastructure is in place, more subscribers can be targeted for advertising and personalized services. We are moving away from the traditional mechanism to one-to-one advertising and personalization,” Sood said.
Yet even with switched digital’s upsides, it hasn’t reached no-brainer status, Sood admitted. “It requires headend components, edge modulators, switch/session manager and a group of other hardware, along with intelligence in the set-top boxes to switch the channels on or off. And there’s a process of installation and lots of interfacing with existing systems and more advanced networks. The entire process usually takes a few months, but it beats the alternatives, especially a plant upgrade.”
Switched digital video is on the radar screen at larger companies such as Motorola as well, which is very aware of the coming bandwidth needs of service providers, evidenced by its recent acquisition of Broadbus, a provider of on-demand technology and other video communications services, including bandwidth management.
“We see a major bandwidth crunch coming with expanded HD offerings, more on-demand content, improved VOD offerings, network [digital video recorders] and more. [Switched digital] is a big step forward to allow a great deal more bandwidth without plant rebuilds. Bandwidth management will ultimately become an issue for everyone,” senior director of product development for Motorola digital video solutions Chris Seymour said.
The Broadbus acquisition, he noted, pushes Motorola deeper into the bandwidth management space, and a place it feels will be crucial in the evolution of new services and their growing bandwidth requirements.
“Broadbus gives us a solid, interesting technology to deliver streams to consumers using standards-based architecture, either in homes or on mobile devices. The idea of switching streams to individual consumers is very appealing,” Seymour said.
Others such as Cox aren’t exactly enamored with the targeted advertising and one-to-one streaming capabilities of switched digital, at least not yet. “There’s not a lot of appetite for targeted advertising. We’re wary of the real value of targeting ads to single persons,” Hildebrand said. “We can do it, and there may enough of a business to make it worthwhile, but the real value to advertisers is knowing what people are watching.”
Nevertheless, the value of switched digital in expanding the bandwidth to allow more channels and services is rising, not only within the cable industry, but with its supporting cast of vendors and suppliers.
“We are in the early stages of a fundamental shift away from traditional broadcasting and heading towards an on-demand, personalized environment where consumers can watch whatever they want, whenever they want,” said Marc Tayer, CEO of digital video technology company Imagine Communications Inc. “Our technology allows signals to be kept in the variable bit rate mode, not constant bit rate, which we advocate doing away with,” The company’s initial product, QOD Gateway, incorporates a third-generation method of statistical multiplexing for standard-definition and high-definition VOD content and a scalable personalized TV platform for broadband operators.
Imagine’s entry into the switched digital arena is clear evidence of the elevated status of bandwidth expansion and management issues. “We’re closing the loop with operators as they scale up using [switched digital]. We can help the process of offering limitless content to their subscriber bases,” Tayer added.
Switched digital not only is expected to help service providers with bandwidth concerns, but it is being touted as a valuable competitive tool as well. At least it better be, Frost & Sullivan cable industry analyst Mukul Krishna said.
“With cable and the telcos, especially with the rollout of HD and VOD being very bandwidth intensive, the ability to switch video based on bandwidth use, intelligently, is important. There are no two ways about it, from a business implication standpoint, operators must do switched digital to keep up with demand. It is the best way to handle today’s bandwidth issues,” Krishna said.
A growing legion of switched digital believers concur with that message, including Tandberg TV. “A few years ago, switched digital was being ignored. Now, there are lots of people on its bandwagon after [Time Warner] proved it could work and provide value,” Tandberg TV senior vice president of marketing and business development Braxton Jarratt said. “It’s the best way to squeeze out additional bandwidth, but the onus is on us [vendors] to make it work, and it’s a daunting task. We can make it work in the real world, but must prove it.”
And what’s to prove? “There are challenges to deploying [switched digital] like which channels do you switch,” said Hildebrand. “MSOs should harden their interactive network, test carriers, run viewership tools and when launching [switched digital], take the least watched channels and roll them into [standard-definition] first,” said Hildebrand.
Once switched digital has passed the scaling, integration and other real-world tests, it is projected to be an invaluable tool for cable operators in offering new services such as HD, VOD and other bandwidth-intensive products.
“When switched, there’s unlimited bandwidth, and you can add millions of streams of content on the network, but know only 15% of the subscribers are seeing it at the same time. [Switched digital] answers lots of questions about getting to all on-demand,” Jarratt said.
The emergence of MPEG-4 (Moving Picture Experts Group) technology could impact switched digital, particularly from a competitive standpoint, most experts maintained. “Companies such as the telcos and DirecTV [Inc.] are leap-frogging cable operators to operate MPEG-4, which has twice the bandwidth as the current MPEG-2. The problem is that millions of MPEG-2-only boxes are out there,” said Jarratt.
For the cable industry, the use of switched digital as a competitive tool versus the telcos and satellite is appealing, and driving the industry deeper into the technology and its deployment.
“In competing with satellite, and to a lesser extent the telcos in the number of channels being offered, [switched digital] is a key benefit. It’s the only way to grow the number of channels and HD,” said Mitch Auster, senior director of solutions marketing for switched digital network specialist Ciena Corp.
With services such as Verizon Communication Inc.’s FiOS TV offering triple and quadruple play packages, and with satellite providers serving up about 30 HD channels, differentiating yourself from the video delivery crowd is key.
“Cable still only carries 12 to 15 HD offerings when they could carry 30, and bandwidth is the conundrum. With VOD, HD and broadband access speeds increasing, bandwidth for operators is getting strapped. And with FiOS, in particular with fiber-to-the-home, and satellite’s dozens of HD offerings, cable must provide HD in the next few years. It’s totally a business imperative,” BigBand Networks vice president of strategic marketing Seth Kenvin said.
A big part of that imperative is switched digital, according to Kenvin. “We’re talking billions of dollars to replace every signal-receiving device in the field, so switched digital is very attractive. It works with any set-top box and operators can decide to switch a few channels at a time, so it’s more manageable and less disruptive to plants and devices.”
Yet Kenvin and others have no illusions about the future of bandwidth management and what role switched digital will play. “Digital can go from MPEG-2 to MPEG-4, which will increase bandwidth efficiency even more. But there are only MPEG-2 boxes in homes. So, there’s no single answer and there are several simultaneous trends in bandwidth management, with fiber being the next shift,” Kenvin said.
THE LEAD DOG
In the meantime, the technology looks to be the lead dog in the burgeoning bandwidth expansion and management segment, at least in the short term. Yet for some communications companies such as SureWest Communications, a Northern California operator offering VOD and HD, alternative bandwidth efficiency strategies such as MPEG-4 are trumping switched digital video.
“We’ll need next generation set-top boxes for MPEG-4 to be successful, and that will have an impact on our HD and VOD offerings, particularly since we’re an [Internet Protocol]-based network, which allows us to switch channels at the headend. I think the future in bandwidth is MPEG-4,” said SureWest strategic technologies director Carl Murray.
Not so, according to Krishna. “[Switched digital] will be the way to go,” he said, “and operators are looking at that to solve their bandwidth issues.”