MOVING FROM CONCEPT TO REALITY
There were so many companies touting a hardware solution, software solution
or end-to-end solution to either video on demand or interactive television
at NCTA 2000 that it almost could leave one with the impression that
good old-fashioned cable television is very last century. And by the
end of the year, that statement might be true.
now talking with every major cable operator, and what we're learning
is that every one of them will do some level of deployment of VOD over
the next six months," says Tim Rea, Diva executive vice president and
chief operating officer. "Maybe it'll be the first deployment, or it
will be more. And in 2001, there's no doubt that VOD will become pervasive."
see the inroads that VOD has made from being a concept to becoming a
reality, one needs look no further than Diva. It wasn't too long ago
that Diva would arrive at trade shows with an 18-wheeler full of equipment
and call it a booth. Today, that truckload of equipment has been replaced
by a few racks of equipment. And Diva can now claim 20,000 customers
in seven deployments, with as many as 2 million Charter Cable customers
in the Los Angeles area set to sign up by summer.
Charter deal is for 2 million customers, and that's a watershed for
the VOD category and the cable industry," says Rea. "We're still talking
with them about what hubs we go into."
On top of that announcement came the news last Wednesday that Diva had
signed a deal with Time Warner to port Diva's hardware and software
to Time Warner's Pegasus VOD platform. The importance of that announcement
is that it shows how far Diva has come with its technology. Critics
of Diva point to its proprietary aspects, but Rea says the recent deals
discount those claims.
we were first starting, we had to do a couple of proprietary things,
like provide our own box, in order to show that we could do VOD," says
Rea. "But when we convinced others that we were real, we were able to
do things like make a deal with Motorola and now we're ported to their
box. Certainly the Charter deal forever quiets that issue of whether
or not we're proprietary."
technical issues, however, are the least of the difficulties according
to one industry expert. "Nobody has had a real market impact because
they haven't been able to sell it to consumers," says Adam Goldberg,
Harmonic staff engineer, advanced systems development. Harmonic is heavily
involved in conditional access, a potential solution to content gatekeepers
who feel the new technologies offer a little too much freedom. "Either
they charged too much, you needed an extra phone line, or you needed
an extra set-top box. The idea of VOD is nothing new. But who's going
to cause an impact and win is tough to say. VOD exists, but you need
to be able to have something that people actually want to pay for."
adds that the trick is not technical. "The technical capability is there,
and on the more advanced networks the bandwidth is there," he says.
"You can do interesting things with it, but the trick is selling it
and coming up with features and pricing that people want."
am the Intertainer
isn't alone in expecting a big 2000 and an even bigger 2001. Intertainer
will be getting its first customers up and running later this spring.
They'll be Comcast customers (an investor in Intertainer) but Jonathan
Taplin, Intertainer president and CEO, can only say that they'll be
somewhere on the East Coast.
Intertainer is going to offer more than 60,000 hours of programming,
from a number of studios including Dream Works SKG and Sony. Taplin
is a big believer in offering a more compelling product that extends
well beyond movies.
"The question is no longer does VOD work; it's really what is VOD?"
he says. "It's not just movies, but also e-commerce, interactive advertising
and all the other ways that you can earn money out of that bandwidth."
He also believes that the interactive revolution will be enabled by
companies like Intertainer that create an open platform. "By helping
to enable the revolution, hopefully, the tool set used to create the
content will propagate, and it grows," he says. "It's kind of like the
Web: there was HTML, and everybody wrote to HTML, and it exploded because
everyone knew they could work together."
major message coming from all the companies in the interactive space
went something like this. Cable companies have a top-quality two-way
connection between consumer and head-end. Cable companies are also under
increasing pressure from direct broadcast services to offer better content
and better services. Throw in the occasional misstep like Time Warner
ticking off millions of viewers (it doesn't matter who was right, it
does matter who gets mad) and the cable industry needs to make sure
it offers every advantage it can over its competitors (that means DBS).
That's where interactivity comes in. First, the cable operator arranges
to get some high-quality digital set-top boxes that basically put a
computer on top of the television set. Then you offer a slew of VOD
services, high-quality interactive content, and Internet access. The
subscribers cable bill becomes a little more expensive, and, most importantly,
they don't hit the road, enticed by Direct TV's "NFL Full Ticket:" Or,
maybe they do, but at least the cable operator did everything they could
to stop them.
least that's the way it's supposed to happen.
Cable operators can try to attract customers by using words like digital
and high speed, but the consensus among insiders is that the difference
is going to be content.
cable operators, the trick is finding out what services to layer on
top of that two-way network. Pick the right layers and they might create
an enticing package to viewers. Pick the wrong ones and the viewer won't
even notice they're offered.
Ken Klaer, vice president and general manager, marketing and business
development, subscriber networks, says that VOD is a perfect example
of a service that should effectively take advantage of the two-way stream.
Bandwidth-intensive content flows to the set-top, while low-bandwidth
commands, like VCR functionality, and head back from the viewer.
of the challenges for the cable operator is taking a server and integrating
it with the billing system and making sure the network is properly designed
and configured," he says.
also the question of how many servers will be needed to handle viewer
demand. David Greer, senior system consultant with Concurrent Computer
Corp., says that a rule of thumb is 10% peak usage. So for 20,000 digital
subscribers plan for 2,000 streams to be available at the peak time.
At 320 streams handled per server, that would mean seven servers.
for many cable systems it still comes down to the set-top box. If they
deploy the right set-top box they can consider VOD. Scientific-Atlanta,
which currently offers the Explorer 2000, 3000 and 5000 digital set-tops
introduced three versions of its latest--the Explorer 6000.
first one is Internet-centric, with an additional Docsis tuner built
in, as well as additional processing speed and memory, says Klaer. "That's
three tuners in the set-top, with the Docsis tuner offering a way to
get high-speed data to the box. What the cable system does with it is
up to them."
other two models include a video-centric version that uses MPEG-2 for
its third tuner (allowing picture-in-picture or feeding of a second
television), and the third is an HDTV tuner. The Internet version ships
in September with the others shipping in the fourth quarter.
relationship between server and set-top is also important because the
greater the flexibility in the set-top box architecture the more the
placing of servers in strategic locations can help create more available
bandwidth. "You might want to put high-demand content on the servers
at the hub and manage it as a continuous VOD server," Klaer says.
says that he's already had experience getting VOD services up and running,
with a service for 50,000 Time Warner customers in Tampa Bay beginning
in the next week. He's also working with Cox Communications in San Diego
on an installation that will be rolled out later this year.
again, it might come back to content. And with the tremendous amount
of Internet content already out there, the easier it is to tap into
that content, the easier it might be to get customers excited.
adds that every application creator for Intertainer is done in either
HTML or Java, and at NCTA they announced that Intertainer will work
on Scientific-Atlanta's Explorer set-tops and the DCT-2000 and DCT-5000
from Motorola as well as a PC with a cable modem.
of those products can run off the same database, and that's important,
because we think operators need to stay completely neutral in terms
of hardware because there are constant efficiencies in hardware," he
says. "So we also work on nCube, SeaChange, and Concurrent servers."
will cable operators get it and not miss the opportunity to tap into
interactive? The consensus seems to be yes.
DCT5000 and the Sony Cablevision platforms will be showing operators
that by not being cheap you actually get advantages," says Taplin. "Chuck
Dolan is willing to spend a little money and he's getting something
cool, and I think AT&T will and Paul Allen will as well. A few people
will be leaders and then everyone else will have to follow. If you don't
you allow the PC to become the driving entertainment platform in the