Whether and when to deploy switched digital video (SDV) are questions on the minds of strategists at cable operators both large and small. The variables of this puzzle are costs, budgets and alternatives.
One window into the thinking at a second-tier cable op came during Mediacom‘s earnings call last week. As reported by sister pub CableFAX Daily, Mediacom CEO Rocco Commisso explained his company’s planned 2008 expenditures as directed toward "a lot more digital simulcasting, going all-digital in some systems, beginning our switched digital video initiative and FCC mandated requirements."
One takeaway is that Mediacom, reflecting the industry as a whole, is pursuing multiple options. Of course, each operator is on its own timetable.
Whereas there are only a couple of Comcast systems, for instance, that have yet to deploy digital simulcasting, Mediacom is at the front end of that cycle: currently at 25 percent of its footprint, with the expectation of growing to 50 percent by year end.
Once having deployed digital simulcast, generally regarded as an interim solution in that it consumes rather than reclaims spectrum, an operator is better off either to launch a switched digital solution or drop the analog tier entirely.
That Commisso indicated that some systems were going all digital is also telling. That approach has strong appeal, especially among tier 3 operators. Massillon Cable As reported previously here, all digital was a strong theme at last month’s National Cable Television Cooperative Winter Educational Conference (WEC) in Phoenix. The presentation by Massillon Cable TV President Bob Gessner explicitly ruled out three other bandwidth expansion options: SDV, spectrum overlay and 1 GHz upgrade.
Gessner operates two systems in northeast Ohio that pass about 70,000 homes from a single consolidated headend that transmits, a la simulcast, both analog and all-digital video signals. Massillon has 45,500 video subscribers, a third of whom take digital video.
In a matrix that included capital expenditure, cost of customer premises equipment, operating expenditure, level of disruption, timeframe for completion, amount of spectrum reclaimed or freed up, confidence in success and level of unknowns, the analog elimination option came out on top of Gessner’s analysis.
Gessner emphasized that a key and as yet missing component to this preferred path is a low-cost digital-to-analog (DTA) converter that can serve all TV sets in a subscriber’s home. It may not go missing for long.
At WEC, Brent Smith, CTO of Evolution Canada, held up a model of an NTIA converter with a quadrature amplitude modulation (QAM) tuner. Discussion that Comcast had slipped into hardware developer mode and was specifying such a device followed the MSO’s 4Q 2007 earnings call three weeks ago.
Like others at WEC, Smith emphasized the all-digital approach. "(Switched digital video) is not a solution for independent operators," he said. "Maybe if you’re Time Warner Cable in Manhattan .…" More math Not surprisingly, SDV pioneer BigBand Networks underscores the favorable economics of switching. According to Biren Sood, BigBand VP and Manager of Cable Video, the math works out to $0.90 per QAM channel per home passed for SDV, vs. $3 for all digital.
One cable engineer familiar with this technology roughly confirmed that figure, saying that with some add-ons, it could be closer to $1.00 per QAM signal.
How that translates into homes passed appears to be a matter of headend economics. At least one MSO is pegging that number at $15, which is about half as much as the capex number that Gessner used in his analysis. (Total capex of $2 million divided by 65,500 homes passed = $30.50.)
Another difference in views is estimates in how much spectrum SDV is able to make available. Whereas Gessner put 25 MHz to 50 MHz in his matrix, Sood talks about SDV’s ability to reach enable a "virtually infinite, capacity by demand."
That is a worthy goal, Sood said. "At some point," he said, "you’re always going to hit the wall with a broadcast architecture."
– Jonathan Tombes