In fact, it's now clear that soaring consumer and competitive demand for precious bandwidth may far outstrip the industry's ability to meet that demand, especially in smaller and midsized markets. Due to a volatile mix of legacy analog channels, digital video networks, HDTV channels, video-on-demand (VoD) services, HD VoD programming, DVR applications, broadcast digital must-carry requirements, Internet video downloads, and other services, cable operators will need bigger and bigger chunks of bandwidth for video.
At the same time, the competitive challenges to cable's 60-year rule of the pay-TV market are multiplying and intensifying. In the US, for instance, such prime cable rivals as DirecTV Group Inc. (NYSE: DTV), Dish Network LLC (Nasdaq: DISH), Verizon Communications Inc. (NYSE: VZ) and AT&T Inc. (NYSE: T) are aggressively expanding their digital video, HD, VoD, DVR, mobile video, 3DTV, multi-screen video and other next-gen video offerings.
Moreover, a bevy of popular "over-the-top" (OTT) video providers – including Google (Nasdaq: GOOG), Apple Inc. (Nasdaq: AAPL) TV, Hulu LLC , Netflix Inc. (Nasdaq: NFLX), Roku Inc. , and Boxee – have emerged to lure viewers away from the TV screen altogether. Unlike cable's other rivals, these OTT players are trying to entice cable subscribers to cut the cord not only on their cable video subscriptions, but on all pay-TV subscriptions.
As a result, even the smallest cable operators know they must carry more "bandwidth-hogging" video services to remain competitive. So they are now scrambling for ways to deliver more digital cable networks, HDTV channels, VoD programming, HD VoD choices, advanced time-shifting options, mobile video services, and multi-screen video offerings. Many cable providers are also looking to offer a raft of other advanced video services, including interactive TV (ITV) applications, 3DTV, Internet video, targeted advertising, and even IPTV.
In a new Heavy Reading report, "Exploring Cable Next-Gen Video Services & Strategies," we chronicle the advanced video services that cable operators are seeking to offer. Based on an exclusive worldwide survey of cable providers, the report ranks the video services in order of popularity and outlines the benefits and challenges of each service.
For instance, the survey found that cable operators are more interested in adding new HDTV channels than any other advanced video service. Nearly five sixths of operators said they plan to introduce more HD channels over the next two years. Only one other video service, VoD, comes close to matching HD's appeal.
Large numbers of cable operators also want to offer more ITV and multi-room DVR services. In the survey, slightly more than two thirds of cable providers said they plan to offer more interactive applications to subscribers by mid 2012, while nearly three fifths said they intend to introduce whole-home DVR service.
The report also focuses on the bandwidth-management strategies that cable operators plan to use to create more spectrum for advanced video services. Based on the same worldwide survey of providers, the report ranks the strategies in order of popularity and outlines the benefits and challenges of each strategy.
For example, analog channel reclamation ranks as the leading bandwidth optimization method that cable operators are exploring to expand video capacity. In the survey, nearly three fifths of cable providers said they are considering or pursuing analog reclamation to boost their available bandwidth. Only one other strategy, switched digital video (SDV), drew votes from more than half of the respondents.
— Alan Breznick, Senior Analyst, Heavy Reading
For more information about Heavy Reading's "Exploring Cable Next-Gen Video Services & Strategies," or to request a free executive summary of this report, please contact:
- Dave Williams
Sales Director, Heavy Reading