The Mountain View, Calif.-based company launched its latest, greatest "VuNow" Internet TV platform today, and one of its more interesting, potential applications is one Light Reading Cable's been tracking for a while -- the idea of an MSO going "over the top" to deliver on-demand and subscription linear programming outside its traditional service areas. (See Verismo Debuts TV Platform.)
Having an MSO attack another in its own backyard is intriguing on several levels. It would certainly put a severe strain on the traditionally chummy and collegial cable industry while giving the operator that's doing it a new revenue stream to pursue. This could be crucial at a time in which cable's losing video subs by the tens of thousands to the telcos and satellite-TV operators, while also being pressed by Netflix and other OTT competition.
Verismo EVP Dhaval Ajmera outlined such a usage case for his company's new platform, claiming it could let MSOs expand services, including linear TV networks (if the operator happened to have such rights) outside their regular geographic areas by riding atop the access networks of others.
The idea sounds a bit nutty, because cable's historically been this big, happy family that would rather stick its head in a vat of boiling oil before inflicting damage on one of its own. But it's also an idea that's been percolating for more than a year. Of relatively recent note, there's that persistent rumor that none other than Comcast Corp. (Nasdaq: CMCSA, CMCSK) is working on such a strategy that would involve the use a small, broadband-connected box to deliver video over the top in non-franchised markets. (See Rumor: Comcast Plots OTT Stealth Attack and Comcast Forges 'Excalibur' for IPTV.)
Interestingly enough, Verismo makes boxes and software (which also can be ported to cable boxes) that at least sound like a reasonable fit. And it wasn't all that long ago when cable engineers were singing Verismo's praises at a CableLabs conference. (See Verismo Gets Cable's Vote .)
And let's not forget that Comcast just took its Web-fed Xfinity TV service out of beta, though it's only for the MSO's current crop of video subs (for now). Oh, and it's working on a national, video-optimized content delivery network (CDN) that could fit nicely with an OTT video strategy. (See Comcast's TV Everywhere Play Breaks Out of Beta and Comcast's 'Project Infinity' Takes Flight .)
So it would appear that most of the ingredients to this recipe are there, or will be soon, for Comcast or Charter Communications Inc. to offer OTT subscription video services in, say, a Cox Communications Inc. or Time Warner Cable Inc. (NYSE: TWC) market. Comcast would not exactly have to move mountains at this point to add in DRM and adaptive streaming to help make it go.
That strategy would end up treating other MSOs as "dumb pipes," but some smaller cable operators aren't exactly all that scared and bothered about the concept -- why not let the heft and sway of a Comcast deal with those tricky programming carriage and retransmission deals? (See Indie MSOs Plug ‘Dumb Pipe’ Video Model.)
Ajmera won't name names, of course, but says Verismo is already working with "seven or eight" cable operators.
Verismo is also targeting its product at regular ISPs that want to add video to their quiver and become "virtual MSOs" by feeding services over broadband, with Net2Vu, a Caribbean-based company, already on board. He claims that Verismo, which mostly uses H.264 encoding, needs about 1 Mbit/s to deliver video in decent quality, and perhaps 1.5 Mbit/s to 2 Mbit/s to deliver something in the neighborhood of HD.
— Jeff Baumgartner, Site Editor, Light Reading Cable
Six years ago? Yep, you were ahead of this one. But it's interesting to see these stars begin to align. Comcast is using this new Xfinity brand to the hilt, obviously an attempt to disassociate the MSO from the traditional cable service, since many people outside of Comcast's cable markets might not know who Comcast is. Some will, but they are definitely going with a brand that attempts to transcend olde style cable.
But I get your well stated point… faster access speeds enable MSOs to attack other MSOs (and telcos, too) in non-franchised areas, just as those same speeds have enabled Netflix, Apple, ivi etc. to move with OTT services of their own. But how soon do you think this will start to happen (msos going all OTT on each other)?
It will change the way the entire industry has done business and turn old friends into new enemies. JB