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Has Cable SDV Peaked?

11:40 AM -- Jefferies & Co. Inc. analyst George Notter continues to wonder if the switched digital video (SDV) deployment wave has "peaked" amid recent growth trends at the technology's big champion, BigBand Networks Inc. (Nasdaq: BBND), and growing MSO interest in analog reclamation strategies fueled by the Digital Terminal Adapter (DTA) and other inexpensive digital set-tops. Yesterday, BigBand reported that its SDV platform is deployed, or in the process of being deployed, in systems serving 25 million homes. (See BigBand Dives on Soft Q3 Warning.) That's a nice number, but Notter notes today that it marks just a 1 million home increase quarter-to-quarter. That doesn't stack up so well, considering BigBand's SDV universe expanded by 4 million homes in the fourth quarter of 2008 and 3 million in the first quarter of 2009. Despite that shrinking trend, BigBand remains a big believer in SDV, hopeful that deployment activity will pick up again after the Federal Communications Commission (FCC) vacated an earlier ruling that could've spelled doom for the technology's future. (See FCC Reverses SDV Ruling.) Yesterday, the company indicated it had won a big order in the second quarter, but the purchase order slipped into the following period. BigBand chief Amir Bassan-Eskanazi also offered that SDV growth could jump by high-single digital to double-digit millions (in terms of new homes passed) in the next nine months to a year. But Notter isn't buying into all that optimism, writing that it really could mean that the vendor's SDV biz "will be flat-to-down" over that period, recalling that BigBand saw SDV growth jump by 11 million homes in the past year and 8 million homes in the past three quarters. The analyst is also wary of the negative effect analog reclamation strategies could have on near-term SDV growth. Comcast Corp. (Nasdaq: CMCSA, CMCSK), the prime example, is trying to gain back analog spectrum with its all-digital "Project Cavalry" project, and has all but backburned any further SDV activities. (See Comcast's $1B Bandwidth Plan and Comcast Expands SDV Test Pool.) Notter also points to an "imminent" digital offering from the Comcast Media Center (CMC) targeted to small and mid-sized cable operators that use DTAs from Motorola Inc. (NYSE: MOT) and other suppliers, likely rendering SDV a "less attractive option" for those MSOs. CMC COO Gary Traver recently told Cable Digital News that the DTA offering is nearing the trial stage. (See Small Cablecos Weigh Digital Options .) The analog reclamation topic wasn't a hot one on yesterday's call (BigBand spent most of it explaining why it had to trim its third-quarter guidance), but BigBand has previously argued that MSOs, even those that are getting aggressive with analog reclaim today, will eventually have to do SDV to take advantage of more personal, targeted video services. — Jeff Baumgartner, Site Editor, Cable Digital News

paolo.franzoi 12/5/2012 | 3:59:16 PM
re: Has Cable SDV Peaked?

 


So, BigBand can switch low take rate video channels out and coordinate the activity.  I am just wondering if building a second set of DOCSIS modems for an IP video and STB comms capability might be more effective in the long run.  Cable is going to have to face the ongoing pressure from IP video at some point.  It might be able to short circuit this and bring it to its own domain by deploying IP enabled STBs and using DOCSIS to access them.


seven


 

Jeff Baumgartner 12/5/2012 | 3:59:07 PM
re: Has Cable SDV Peaked? Seems like BBND and you are thinking alike. Their vIP PASS cable IPTV idea and the converged video exchange system anticipate cable doing a lot more ip video down the road. also, Comcast gave SDV some love (though nothing new in terms of deployments) on today's Q2 call. I'll have something on that shortly.
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