In 2004, MSOs will look to boost local video-on-demand encoding capacity, refine the balance between streaming and storage and place greater emphasis on operational metrics and reporting tools, according to cable’s primary VOD-server vendors.
With close to 75% of cable’s VOD rollouts spoken for, cable’s major server vendors — SeaChange International Inc., Concurrent Computer Corp. and nCUBE Corp. — expect one final land rush for the remaining cable systems within Comcast Corp., Cox Communications Inc., Charter Communications Inc. and Adelphia Communications Corp., even as they keep an eye on VOD-platform enhancements.
Only a handful of systems in major cities have yet to launch VOD, but vendors say their add-on business within existing markets is solid.
“We do 30% expansion business every quarter,” said SeaChange vice president of broadband James Kelso. “Asia is heating up very nicely, and Europe is getting its house in order. “As more content comes on VOD, it will turn it up higher. People are getting close to saturation on streams that they have now.”
Said Steve Necessary, president of Concurrent’s VOD division: “Three-quarters of the gold rush is done. Comcast and Adelphia have a lot left to go. A few very large Comcast markets are still available and some small Charter markets are available.”
One key trend is a spike in simultaneous usage rates, according to Necessary.
“New deployments are clearly going out with average higher rates for peak simultaneous usage,” he explained. “We’re launching sites at 10% simultaneous usage on set-tops, and 1.5 digital set-tops per home. That is actually 15% of digital subscribers.
“That is substantially higher than our historical average, which is 8%,” he said.
Such an increase in simultaneous usage rates affects ongoing streaming and storage calculations.
While MSOs have moved to separate streams from storage for increased flexibility, server vendors say there is no one “right” answer when it comes to balancing the two approaches.
“Operators are interested in having the most efficient and flexible system,” said nCUBE chief technology officer Joe Matarese. “The most cost-effective way is commodity disk-drive technology. It all comes down to the performance of the disk drives.
“In our systems, the number of streams has driven the number of drives needed,” he continued. “We have enough storage on disk drives to add a lot of content without having to add additional disk drives.”
Matarese pointed to Time Warner Cable’s Los Angeles, New York and Memphis markets, where nCUBE hasn’t needed to add any disk drives for storage.
“Streams are continuing to drive the sizes of the systems,” he said. “You’ll see streaming-only units using existing storage,” and other systems where “you’ll just expand streaming.”
“Each cluster can gain disks or memory to expand storage or streaming as you need it,” he added. “On a regular basis, we ship units just for storage.”
When cable operators first rolled out VOD, there was a defined correlation between streaming and storage. A certain amount of storage meant there would automatically be a specific number of available streams.
As VOD evolved, some MSOs found the need to store additional content. But if usage rates remained the same, more streams weren’t needed. Conversely, if an MSO rolled out subscription VOD — which generates a lot of usage — the system may have required many more streams to handle the traffic load, but not necessarily any additional storage disks.
Necessary said Concurrent’s latest product line, now in use at roughly 12 to 15 systems, separates the streaming and storage elements.
Said Matarese: “There is a lot more emphasis on the operational infrastructure. There is more emphasis on reporting tools and monitoring how the system is performing.
“Bandwidth management, having a scalable means for managing large numbers of sessions, is important,” he added. “Everyone’s focused on bandwidth management for the transition to all-digital. They are very concerned about being very bandwidth-efficient with switched Gigabit Ethernet.”
Although there has been much talk of adding second-source vendors within existing deployments, or of splitting new deployments between vendors, there’s little evidence any of that has happened.
“A second server vendor — we expect that to happen,” nCUBE’s Matarese said. “Operators have made it clear they want choice and risk mitigation.”
“There have been some trials with second servers,” reported SeaChange’s Kelso, but “no second source storage in any SeaChange site.”
Said Matarese, “There is a lot of integration work to get a system deployed in the field.”
Time Warner Cable has blazed that trail, Necessary said, pointing to its Interactive Services Architecture initiative.
“What has prevented a site from deploying multiple servers has more to do with day-to-day operational issues,” he said. “The technology works. It can be done.
“But for the local-operations guys, it introduces a whole new set of challenges, what people to call when issues arise, more integration issues, etc.”
There also is a lot of discussion about VOD in HDTV, as well as about encoding locally produced content.
Several Concurrent customers are talking about HD VOD, said Necessary, who said his company will release new software in the first half of 2004 to handle such content.
“It’s more sizzle than steak,” though, he cautioned. “It’s storage- and bandwidth-intensive, and the sum total of content is limited. It is coming, but I would not characterize it as a big contributor to streams and storage right now, but it will start showing up.”
SeaChange is a bit more bullish, given that the only major MSO that’s launched HDTV VOD to date is server customer Cablevision Systems Corp.
“HD doesn’t hurt a bit,” Kelso said, discussing about future business for SeaChange.
nCUBE also landed an HD win — its first — with Bend Broadband in Bend, Ore.
"There's a lot of interest in general," said Matarese. "Time Warner Cable has made some statements. It goes back to the bandwidth issue and, 'How much bandwidth will they have available?'"
The encoding of local content — whether from broadcast-TV stations or local cable channels — also shows signs of heating up.
“We can take in 35 channels simultaneously now,” Kelso said. “That’s a long way from a couple of years ago.” SeaChange handles the local encoding and ingestion for Comcast’s extensive effort in Philadelphia.
For its part, nCUBE said its encoding technology is in lab trials.
“There is not a lot of that going on, but we expect that to ramp up this year,” Matarese said. MSOs are interested in putting on local sporting events and even talk shows, he said.
SeaChange has pitched operators on its VODLink product, with a software feature that mirrors DVD functionality.
Insight Communications Co. has launched the guide portion of VODLink, but hasn’t activated the DVD component yet, SeaChange said.
“DVD on demand has started to take off,” Kelso said. “That lets us do multispeed fast forward and rewind, multiple language tracks and subtitles even before you get into special features of DVDs.”
He added: “We’re all over Insight. It is their VOD user interface. Cox has two sites coming live soon, and we’re in several other trials.”
SeaChange also has worked to integrate new video formats with its servers, including the Moving Picture Experts Group’s MPEG-4, Microsoft Corp.’s Windows Media 9 and H. 264.
Some of those formats have gained acceptance in Asia and elsewhere. U.S. cable operators aren’t there yet, but SeaChange can see the day where it feeds video from servers to both TVs and PCs.
“We can feed the same video to their cable modem infrastructure right now,” he said. “All the servers we’ve shipped support Windows Media 9.”