Verismo Gives Cable an OTT Weapon of Its Own

Netflix Inc. (Nasdaq: NFLX) is generally considered one of cable's chief "over-the-top" video threats, but what if those threats were extended to include other cable MSOs? According to Verismo Networks Inc. it's not just a likely scenario, but one that's already starting to happen.

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

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paolo.franzoi 12/5/2012 | 4:20:12 PM
re: Verismo Gives Cable an OTT Weapon of Its Own

I think its more complicated because as long as you have competition for the Broadband Access then the ability to raise prices for that is not really there.&nbsp; If we TRULY move to an OTT model, then you can do things like background downloads and enable for subscriptions.&nbsp; Then the only actual real time you have is VOD.&nbsp; So you can trade off storage (which is really cheap) for bandwidth for lots of things.

Bandwidth caps might help more than throttling will if you time shift.


Edit:&nbsp; Jeff - I was thinking more like this....http://www.skyangel.com/



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