Video services

Verimatrix Cuddles With Cable

Conditional access and digital watermarking specialist Verimatrix Inc. says it aims to address an MSO migration toward IP-based video services with a content security platform called VCAS for Cable IPTV, along with gear from GoBackTV Inc. , an edge QAM and cable modem termination system (CMTS) startup.

Under a deal announced today, Verimatrix will market its market its software-based Video Content Authority System (VCAS) to cable operators in tandem with a GoBackTV's CMTS Bypass solution, which enables cable operators to pipe IP-based video services using their standing hybrid fiber/coax (HFC) plants and the underlying Docsis architecture.

Using the bypass approach, multicast and unicast IPTV streams sidestep the "core" CMTS by funneling video through GoBackTV's GigaQAM 3000 edge QAM, which encapsulates the IPTV traffic. Those video signals are then delivered to homes via Docsis cable modems that are linked to off-the-shelf IP-based set-tops

Verimatrix, which is demonstrating the platform this week at the IBC conference in Amsterdam, is marketing the integrated system under its own brand, and is on the hook for installations, training, and general customer support.

This approach, the company claims, will allow some MSOs to migrate to digital at a fraction of what it might cost using more traditional methods. Much of those savings, they believe, will come at the set-top level. While most digital cable boxes cost in the $200 range, IPTV set-tops average about $80 each. Verimatrix has completed integrations with about 70 different models from vendors that include Motorola Inc. (NYSE: MOT), Scientific Atlanta , Amino Communications Ltd. , Entone Inc. , and i3 Micro Technology AB .

Taking the set-top -- the most expensive component -- out of the equation, the switchover to the Verimatrix-GoBackTV architecture will cost operators a one-time capital expense of about $30 per subscriber, estimates Steve Oetegenn, Verimatrix's chief sales and marketing officer.

Because VCAS is software-based, Verimatrix believes it also meets U.S. cable's separable set-top security requirements, which went in to effect July 1, 2007. Although most cable operators are currently meeting the mandate with removable CableCARDs, the Federal Communications Commission (FCC) has ruled that downloadable conditional access systems would also fit the bill. (See Countdown to 'Seven-Oh-Seven'.)

Currently, the Verimatrix-GoBackTV combo is designed to work on Docsis 1.1 and 2.0 and EuroDocsis networks. They also plan to support Docsis 3.0, a new CableLabs spec that supports IPv6 and enlists channel bonding techniques to produce shared speeds in excess of 100 Mbit/s.

Verimatrix, a seven-year-old company, began specializing in IPTV content protection in 2002, and launched the first product in that portfolio in 2003. KT Corp. was its first IPTV customer. It has since added customers including NTT Communications Corp. (NYSE: NTT), Belgacom SA (Euronext: BELG), and Telecom Italia (TIM) . Today, it claims to have installations on 80 IPTV networks and secured north of 2.5 million licenses on IPTV set-tops. It expects that figure to jump to 3 million by the end of 2007.

But penetrating the cable market has its special challenges. While most MSOs don't yet use IPTV, cable's conditional access landscape, particularly in North America, is dominated by the duopoly of Motorola and Scientific Atlanta.

But Verimatrix, Oetegenn acknowledges, won't be competing directly with that duopoly or targeting major MSOs like Comcast Corp. (Nasdaq: CMCSA, CMCSK) and Time Warner Cable Inc. (NYSE: TWC). Instead, it will seek out situations in which cable operators are looking to migrate from analog video delivery to an IP-based services structure that leverages the existing Docsis architecture, coupled with CMTS bypass techniques.

"Operators can use Verimatrix for IPTV in a modified form in the cable space. That's where we see our market opportunities," Oetegenn says.

And those opportunities are just beginning to take root. Oetegenn notes that two of Verimatrix's telephony customers in North American have agreed to trial the new product. Among them is a local phone company that also operates some cable plant and uses the Docsis architecture to deliver high-speed Internet services.

He says the solution is developing some inroads in Latin America, where it has teamed up with IPTV Americas , which specializes in delivering IP video technologies to telcos in the region.

GoBackTV, meanwhile, has some CMTS and edge QAM activity happening in Europe, including some work with French MSO Numericable-SFR and a CMTS bypass deployment with BKG-Neuruppin of Brandenburg, Germany. (See MSO Tests CMTS Bypass.)

GoBackTV is made up of several former execs of Com21 Inc., a cable modem and CMTS vendor that went bankrupt in 2003. GoBackTV purchased the digital video assets of Com21 in the fall of 2003 for an undisclosed sum.

— Jeff Baumgartner, Site Editor, Cable Digital News

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