Heavy Reading
EXECUTIVE SUMMARY

Switched Digital Video & Cable's Looming Bandwidth Crisis

Cable network operators have come to realize that customer demand for bandwidth, which has been climbing faster and higher than anyone expected, will soon outstrip their ability to supply that bandwidth with the technologies now in place. Continued rise in demand for high-definition TV (HDTV) channels, video-on-demand (VOD) services, digital video recording (DVR) applications, Internet video downloads, and time-shifting services will continue to gobble up bandwidth in much greater chunks than ever anticipated. Meanwhile, competitive pressure from satellite network operators and telco IPTV providers will force cable MSOs to find solutions to their bandwidth problem sooner rather than later.

Faced with these daunting challenges, cable operators are increasingly turning to an array of new technologies to expand their overall radio frequency (RF) capacity and/or use existing bandwidth more efficiently. Over the past year, switched digital video (SDV) has emerged as the leading choice on this menu beating out such alternatives as fiber node segmentation (a.k.a. node splitting), MPEG-4 video encoding, improved quadrature amplitude modulation (QAM), higher plant upgrades to 1GHz capacity, out-of-band spectrum overlays, and deep-fiber drops, among others. A number of major MSOs are now testing, rolling out, or preparing to introduce SDV technology in the U.S., Canada, and Europe.

SDV enables cable operators to boost bandwidth efficiency by delivering lightly viewed channels only to subscribers who actually request them, rather than to their entire digital customer base. This technique takes advantage of the fact that only a small fraction of the several hundred digital channels now available to subscribers are ever viewed at the same time within a given fiber node or service group.

By sending video channels only to those subscribers who actually request them, SDV frees up precious spectrum for other, high-demand digital services, including more standard digital channels, more HD channels, more VOD programming, time-shifting applications, and higher data rates for broadband Internet service. Although spectrum savings can vary greatly depending on how many digital channels are switched, which ones are switched, and the size of the MSO's nodes or service groups, cable engineers estimate that SDV can unleash 50 percent or more of their digital video spectrum for other, more profitable applications.

Cable technologists also find SDV increasingly appealing because of the addressable advertising possibilities the technology opens up. Once they can send unique programming streams to a specific neighborhood (multicasting) or ultimately, to individual homes (unicasting) MSOs will be able to customize commercials for these small groups of targeted viewers. In turn, that should allow them to charge advertisers a higher rate for reaching these highly desirable viewers.

The planned widespread deployment of SDV, however, is still far from certain. For one thing, the technical wizardry behind the two-way, real-time operation is extremely complicated, making even the relatively complex techniques used to deliver VOD seem like child's play by comparison. As a result, some cable engineers fear that the whole architecture could collapse if subscriber demand to switch channels proves too great. For another, SDV may turn out to be a relatively expensive technology for some MSOs to implement on a large scale. In a confidential industry report last year, CableLabs estimated the cost to be about $16 per home passed and $23 per home served. But at least one large North American cable company estimates the price tag to be as high as $32 per home passed.

A further potential impediment to the technology's development is the fact that the cable industry has not yet embraced a single, industry-wide technical standard for either an integrated, end-to-end SDV system or the individual hardware and software components of that system. Instead, as so often happens in this still-fragmented industry, individual MSOs have adopted separate sets of "open" standards that don't work with one another, leaving the other cable operators to choose sides or go it alone. While CableLabs and several MSOs are now working to resolve this problem, it's not clear how soon or even whether this hurdle can be fully overcome.

Switched Digital Video & Cable's Looming Bandwidth Crisis explores the accelerating development of the SDV sector. Specifically, the report examines the cable industry's plans to test, refine, and deploy SDV technology as quickly as possible over the next two years, in spite of the various obstacles. The report based on direct interviews with the six largest U.S. and Canadian cable operators and more than a dozen technology vendors, as well as press conferences, earnings reports, conference panel sessions, technical papers, and trade press articles takes a close look at the early SDV trial and rollout strategies of such leading North American MSOs as Comcast, Time Warner Cable, Cox, Charter, Cablevision, and Rogers. It also projects their progress through the end of 2009.

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Besides spelling out MSO deployment strategies, the report analyzes the different segments of the emerging SDV business, looking at both the hardware and software components of the technology. In particular, it sizes up the competitive positioning by the cable technology vendors in the hotly contested edge QAM modulator and head-end management software sectors. Plus, it offers forecasts about the pending shakeout of the SDV technology players.


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This report also provides a detailed analysis of the technology vendors developing equipment and software for the SDV market, including firms producing edge QAM modulators, session and resource managers (SRMs), SDV servers, SDV managers, and other related products. The report categorizes vendors by equipment or software type and assesses their products, customer wins, strengths, and weaknesses.

For a list of companies profiled and evaluated in this report, click here.



Report Scope and Structure

Switched Digital Video & Cable's Looming Bandwidth Crisis is structured as follows:

Section I is an introduction to the report, with complete report key findings.

Section II provides an overview of SDV technology, explaining how it works, the network elements it comprises, and the technical challenges that must be overcome. It also details the driving forces behind the cable industry's adoption of SDV technology.

Section III spells out the cable industry's requirements for deploying SDV, including the need to support competing digital video platforms from Motorola and Scientific Atlanta. It also examines the various technical protocols that Comcast, Time Warner Cable, and others have developed to meet those requirements and explores the raging industry debate over open standards.

Section IV examines SDV market trials and live deployments throughout North America to date and assesses where the technology now stands. It also sets out Heavy Reading's view of how the SDV business will evolve over the next couple of years, and the market forces that will determine which types of technology vendors will benefit the most.

Section V offers in-depth profiles of 13 equipment and software vendors developing SDV products for cable operators. It features comparisons of different vendor categories, as well as analyses of each vendor's competitive strengths and weaknesses.

Switched Digital Video & Cable's Looming Bandwidth Crisis is essential reading for a wide range of industry participants, including the following:

Cable technology suppliers: How will the looming bandwidth crisis affect cable MSO technology deployment plans? When is the market for SDV likely to develop, and what's the most likely timeframe for SDV rollouts? How will the emergence of SDV affect other technologies that are being proposed to increase bandwidth efficiency for cable MSO networks? Where are the emerging opportunities to grow market share? Are your products and marketing messages in line with cable MSO plans and expectations? Are there significant gaps in your product-line coverage that need to be addressed to meet future demand from cable MSOs regarding bandwidth efficiency?
Cable network operators: How do the current options for improving bandwidth efficiency compare with one another in terms of cost and effectiveness? How are other cable MSOs approaching the bandwidth issue? Are their plans and expectations in line with your company's approach? Which technology suppliers are in the best position to meet your company's requirements regarding bandwidth efficiency?
Investors: Which technologies are emerging as the winning solutions for cable MSO bandwidth efficiency, and which companies are the leading providers of those solutions? How will the need for new technology and infrastructure buildouts affect profitability for the cable MSO sector in the coming months and years?

Switched Digital Video & Cable's Looming Bandwidth Crisis is published in PDF format.

LENGTH: 52 PAGES
PRICE: $3,995
ALAN BREZNICK
Senior Analyst, Heavy Reading
Breznick has tracked the media, telecom, consumer electronics, and broadband industries for more than 20 years...
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13 TECHNOLOGY SUPPLIERS & 6 LEADING CABLE MSOs ANALYZED
Click here for full list of companies covered in this report
DELIVERABLES
52 pages of analysis covering the cable MSO bandwidth crisis and the technology options available to improve bandwidth efficiency in cable networks, including current and planned deployments of bandwidth solutions by six leading North American MSOs
In-depth product and strategy analyses for 13 leading technology suppliers of switched digital video products
Projected timeframes and forecasts for cable MSO deployments of SDV and other bandwidth-saving technologies
Detailed analysis of projected rollout costs of SDV and other bandwidth-efficiency technologies
LENGTH: 52 PAGES
PRICE: $3,995
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