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Starz Aligns on MPEG-4

Jeff Baumgartner
LR Cable News Analysis
Jeff Baumgartner
6/3/2008
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Faced with a satellite bandwidth crunch amid the launch of new linear hi-def networks and an expanded menu of HD-VOD content, Starz Entertainment LLC is giving the vote to MPEG-4.

But the premium programmer won't go to MPEG-4 across the board right away. Initially it will use the advanced compression scheme, which promises to boost bandwidth efficiency by as much as 50 percent, on its HD channels -- Starz, Starz Kids and Family HD, Starz Edge HD, and Starz Comedy HD. Encore HD will also be delivered in MPEG-4 when it launches later this summer. (See Starz Lights MPEG-4 Plan and Encore HD Set for July.)

Starz expects to start the transition in mid-July and complete it about a month later. The MPEG-4 migration "is only for the affiliates that have signed on for our new HD services," notes Ray Milius, Starz's SVP of programming operations and IT. Starz will continue to offer east and west feeds of the flagship Starz service in MPEG-2. "Over time we'll migrate people over to the MPEG-4 service," he adds.

Starz delivers HD channels in MPEG-2 today at about 19 Mbit/s but anticipates delivering hi-definition networks in MPEG-4 in the range of 9 Mbit/s to 10 Mbit/s.

That's all fine, but most, if not all, deployed set-tops can decode only MPEG-2 signals. What happens to them?

To ensure that the new signals can be viewed through those boxes, Motorola Inc. (NYSE: MOT) is supplying the DSR-6050, a digital satellite receiver/transcoder that supports both MPEG-4 and MPEG-2 outputs. Those receivers also support DVB-S2, a satellite modulation that boosts satellite transponder output by 50 percent. The latter upgrade will allow Starz to pitch video on demand, including HD titles, more efficiently in MPEG-2.

DSR-6050

Today, Starz serves up to 126 hours of HD-VOD content to affiliates such as Comcast Corp. (Nasdaq: CMCSA, CMCSK), which now claims to offer 500 HD choices.

Under most circumstances, it's up to the cable affiliates to purchase receivers. However, to help with this transition, Starz is picking up a portion of the costs for the new transcoders for operators that opted to launch the programmer's expanded HD package early on.

Starz is gaining carriage for its broader HD package, but "one of the reasons we want to migrate now is that the universe is not huge yet," Milius says. Starz does not break down how many subscribers take its hi-def services, but, overall, Starz has 16.8 million subscribers and Encore has 31.4 million.

Demand and necessity
Although not every Starz affiliate will be ready to roll out these new networks right away, Milius says the time was right to start the MPEG-4 transition, based on demand and necessity. Operators are requesting Starz's beefier HD package, while Starz is cramming everything into limited satellite capacity.

"We were frankly out of bandwidth on the satellite," Milius says.

Starz transmits programming via five transponders on three different Intelsat Ltd. satellites. For the moment, Starz pipes in all of its HD content via the Galaxy 13 bird.

Among premium programmers, Starz isn't the only one pitching a tent in the MPEG-4 camp. Last year, HBO announced plans to deliver all 26 of its HBO and Cinemax channels in hi-def and in MPEG-4 by the third quarter of 2008. (See HBO Bets Big on MPEG-4 .)

Starz may do the same for its 41 feeds, but it's not ready to pinpoint when that might happen.

"At some point I think we will have everything... in HD. I think the marketplace will force that," Milius says. "We're cautiously moving forward based on the demand for distribution because it doesn't do me any good to put all 41 of our feeds up in HD just to have nobody take them."

MPEG-4 usage should grow as operators deploy more set-tops with dual MPEG-2 and MPEG-4 support. Operators are likewise expected to spur demand for the new boxes by marketing MPEG-4-only HD tiers.

For its part in the consumer transition, Motorola has introduced a line of "DCX" cable boxes that support both codecs. (See Moto Plants Seeds for MPEG-4 .) Cisco Systems Inc. (Nasdaq: CSCO) and Pace Micro Technology , two other significant cable suppliers, also have new set-tops with MPEG-4 baked in. (See Pace Adds MPEG-4.)

By July, Motorola expects the "mainstream" of box shipments to include models with larger hard drives and MPEG-4, according to Marty Stein, senior marketing director for Motorola's IP video services unit.

— Jeff Baumgartner, Site Editor, Cable Digital News

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