John Hartung, Ph.D., is CTO of EGT.

What products or services are you developing over the next few years, and why are they important to cable?

EGT’s Head End Micro (HEMi), our newest product line, provides all the functionality necessary to efficiently include analog services in an existing digital lineup, by essentially having a “headend in a box.” The unit includes encoding, add/drop multiplexing, QAM and upconversion in a platform designed for uncontrolled environments. Additional features in the HEMi include video store and forward and overlay generation. This product addresses the requirement for cable operators to provide local analog services in digital networks. An example of this is security cameras in MDUs and closed communities such as condominium complexes. HEMi allows cable operators to transition to an all-digital network, and it also provides a platform for new revenue generation services such as highly localized advertising.

In transcoding, cable operators are faced with content coming in different formats and then distributing content to subscribers on different platforms like traditional TV, cell phones or iPods. Software is being developed for EGT encoding platforms to allow transcoding between MPEG-2 and advanced encoding standards such as H.264, and between encoding rates and resolutions. This flexibility will enable content to be delivered via various networks including wireless, broadband, mobile and cable. As HD services continue to expand, it will allow these services to be converted from MPEG-2 distribution to more efficient encoding standards.

In universal transcoding, EGT is developing a platform to allow efficient session-based transcoding tailored to the demands of the network bandwidth manager and terminal device capabilities. The platform optimizes storage, management and transcoding cost. This capability will be important to cable operators as the amount of on-demand content increases and as content is delivered over many networks and to many types of terminal devices.

During your meetings with cable operators, what areas of concern do they mention most frequently?

The area of most concern is their ability to manage access bandwidth and video quality in the transition from SD broadcast services to HD on-demand services. The first step in this transition is the ongoing conversion of analog content to digital. Initially, this poses a problem because duplicate analog and digital services are being carried, requiring highly efficient encoding to provide high quality within bandwidth constraints. The next step, switched digital broadcast, provides relief; however, bandwidth utilization will again become a challenge as more on-demand and HD content is carried. At that time, it is anticipated that HD content will be converted to the more efficient H.264 encoding format.

Do the smaller, independent operators have different agendas or technical requirements from the large MSOs?

The smaller operators are also involved in digital conversion; however, they often obtain digital content through satellite providers rather than encode themselves. In order to meet their franchise requirements, however, they are still required to digitize and carry PEG (public access, educational and government) channels.

Do you have an international presence? If so, what’s your strategy?

EGT products support international standards and are on the air in 10 countries. The strategy has been to capture prominent customers and to expand through distribution and technical partnerships.

If you had to pick one area for the cable industry to become more focused on, what is it and why?

EGT has focused on one niche area, and that’s video processing. EGT takes encoding several steps further by offering more functionality in one box than any other manufacturer while providing the highest quality video output.

Which is the biggest threat to the cable industry: telcos, satellite or over-the-top providers?

It’s a mixed bag. The satellite operators have been aggressive at rolling out HD services, but they lack an all-important two-way capability in their platform. The telcos are developing high bandwidth, two-way networks that will have interactive services, but the buildout costs are high, and there are scaling issues to be overcome. The over-the-top providers are focused mostly on high value, on-demand content like movies. Cable MSOs really have it all: high bandwidth connections to the home, interactive applications like VOD, and HDTV. They are well-positioned to compete with each of these platforms, now and well into the future.

What service or product will have the biggest impact on cable subscribers over the next five years?

From a subscriber’s viewpoint, I think it will be the increasing amount of HD content. The sales of HDTV sets have dramatically increased recently and will result in a greater demand for video quality, both SD and HD, when viewed on these large sets.

What is the defining moment for your company over the past five years?

EGT literally changed the encoding industry when we introduced our first product in September 2003: a very dense, high quality, feature-rich encoder at an affordable price point. We changed the industry again when we launched our headend micro product, HEMi. No one else has a product like it.

Any horror stories and/or shining examples from the field you’d care to relate?

The shining example for me is our history with our largest and oldest customers. They have continued to purchase EGT encoders every quarter for the last three years and have increased the efficiency and features of these encoders through software upgrades.

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