October 23, 2009
Talk of IP Video (and IPTV) Intensifies
When CTOs talk, the industry should listen. So note well that top technology officers at Time Warner Cable and Liberty Global included IP video their recent talking points about priorities for the next year.
Time Warner Cable EVP and CTO Mike Lajoie focused on the customer while using his company’s four “Any’s” mantra. (The title of one of the five sessions in the Engineering track at next week’s CableTec Expo.) “If our customers want their multi-channel video programming on their PC or their wireless device, I want to give it to them,” he said in this year’s edition of CT’s Communications Executive.
Liberty Global SVP and CTO Balan Nair referred to his company’s deployment of next-generation gateways and IP set-top boxes. As for online video, he admitted that Liberty’s plans were still under construction.
“There has not been a stand-alone business model that has been successful, be it advertising, transaction or subscription,” he said. “However, we hope to have a story that will be accretive to our long-range plan soon.
These themes—expansive customer desires, next-gen gateways and elusive business models—are useful ways of framing the discussion surrounding IP television and online video.
Four 'anys,' lots of tuners
On the one hand, while the “Four Any’s” (any product, anywhere, anytime on any device) have become a catchphrase, one can link deeds to these words. Time Warner Cable announced in late August that it would be trialing TV Everywhere this fall, enabling subscribers to access content from twelve content partners.
Internally, Time Warner Cable has tasked Senior Fellow Louis Williamson with leading a lead exploring IP video delivery. Nor is this effort the MSO’s first exploration of the topic.
In an early demonstration of “device shifting,” four years ago Time Warner launched a Broadband Television trial, delivering 80 channels of broadcast video to subscribers’ PCs in San Diego. Part of the MSO’s message was “Yes, we can do this, too.” But there were technical lessons, too. (Click here for more.)
As for Nair’s response, his reference to a next-gen gateways and IP set-tops is on point. Gateways appear to have more traction internationally—Virgin Media is working with Motorola on a “transport gateway” in the U.K.—but multiple flavors of these devices are appearing on operator and vendor roadmaps in North America, as well.
The first step is simple consolidation: pulling modem, wireless and wired router and eMTA together into one box. Adding QAM tuners to a growing number of DOCSIS 3.0 tuners are further steps toward consolidation that make sense as MSOs turn their attention from the PC toward the television set.
A big question, however, is exactly how many tuners? (Do I hear eight? Eight. Twelve? I hear twelve. Do I hear twenty-four? Twenty-four… Do I hear thirty-two? Thirty-two? Going once, going twice, sold to the….Wait a minute. You can’t bid; you’re the vendor!)
Indeed, to the extent that Liberty is deploying IP set-tops, as well, it already has systems—probably hybrid networks—where it makes sense.
For now, talk tends to be more about enabling existing IP-enabled end devices. But as Nair indicated, the business model for online video is elusive. It may remain so.
It’s a familiar image in PowerPoint presentations the world over, especially at wireless conferences.
“Whoever came up with the graph that said bandwidth is growing 80-90 percent per year but revenue is only growing 20-30 percent should have copyrighted it and collected royalties,” Randy Fuller, Camiant VP business development, said during a recent CT podcast. And it’s not just wireless operators who will feel the pinch.
“Video traffic is growing faster than revenue,” Dave Brown, Cisco cable solutions marketing manager, said. “By 2013, 90 percent of online traffic will be video.”
This is the painful delta that is driving engineers to look at both consolidated IP gateways and network tweaks or re-designs. “We certainly can do things with caching at the edge, (and) converging IP services over the IP network,” he said. “Modular CMTS architectures also go a long way toward providing an incredible amount of capability in the CMTS.”
The CMTS has been a point of contention in IP video discussions. It goes back to Motorola’s introduction of the DOCSIS over Bypass Architecture (DIBA) architecture several years ago. The absolute and increasing cost-per-bit cost of the CMTS is no secret.
“All the operators are looking at the CMTS as a place where the relative cost today is very high,” John Holobinko, BigBand VP marketing, said. “That didn’t matter much in the past, because data was one channel.”
The days of one channel are numbered. In their SCTE Conference on Emerging Technologies paper on Comcast’s Next Generation Access Architecture (NGAA) initiative, Comcast Vice Presidents Jorge Salinger and John Leddy projected possibly 12 to 20 DOCSIS channels. The bottom line of the industry’s growth in digital video and high-speed data delivery is four words: “Operational and financial challenges.”
The point of the NGAA exercise is to push packet processing to the edge, reduce the number of managed devices and drive down the cost of delivering bits. The project has vendors engaged. Philadelphia issued an RFI in March and is expected to deliver an RFP early next year.
Whether NGAA or other efforts can accomplish its goal is an open question. “I don’t believe they’ll be able to bring costs down,” one MSO engineer said about the efforts at Comcast and other MSOs to change the cost structure of the CMTS.
“Sure, the costs are high,” said another engineer from a third MSO. “But with next-gen CMTS, the costs are coming down. The next-gen are going to be super dense, with flexible (down/up) ratios.”
Time will tell whether the “bypass” approach is solving a problem that will go away, but some proponents of the general category realize that its fit is good, if not universal. “Direct2Edge was really a success for us in markets where we have hybrid operators…that have DSL and want to do IPTV over HFC,” Harmonic VP Product Marketing Nimrod Ben-Natan said.
At the same time, Ben-Natan believes that edgeQAM manufacturers will stay a step ahead of CMTS vendors, who cannot focus exclusively on new technologies, such as Fast Digital to Analog (Fast DAC), that are improving efficiencies of QAM modulators.
Harmonic is also seeing interest is in its family of products that manage the workflow of content-based operations. “There’s a lot of activity around TV Everywhere. Not just in the context of authentication,” Ben-Natan said. “More in the context of how to deal, manage, and manipulate content and distribution in the network.”
Cisco’s Brown also pointed to the potential for efficiencies in this area—and the cost of the opposite. “How do you avoid having to transcode all of your content in two different formats? Or…avoid encoding everything twice?”
A final promising area for increased network efficiency is that of variable bit rate (VBR) encoding. In a paper presented at IBC in September that built upon earlier research supported by the European Commission, ARRIS VP Advanced Technology Mark Bugajski concluded that VBR reduces the cost to deliver an equivalent constant bit rate (CBR) stream by 65 percent. Or conversely, VBR enables 50 percent more streams delivered by the same CMTS.
Bugajski documented similar gains in operations of VOD servers, CDNs, and the HFC plant itself.
There are other potential game changers. Properly enhanced, IP Multicast—now a fixture in IPv6—could positively impact if not disintermediate existing CND architectures.
For now, however, the focus for MSOs remains on the CMTS itself and the endpoints leading within the home network. The intense, industry-wide discussion around those two points, which represent some 85 percent of capital spend, suggest to one insider that this is “the biggest transition since we went digital.”
Brown said these changes represent “an evolution, not a rip and replace.”
Likewise, he said the question of business models is best described not in binary terms (managed or unmanaged) but rather as a spectrum of choices regarding the managed or unmanaged status of the network, devices, content or even metadata.
“There are actually quite a few degrees of freedom,” Brown said.