x

Getting Back to Video



Now here's what sounds like a real no-brainer: Cable operators, long the kings of the residential pay-TV market, are starting to explore ways to sell advanced video services to commercial subscribers.

After years of focusing first on first high-speed data and then on new voice services for business customers, several large MSOs are finally beginning to train their sights on the promising commercial video market. They are gearing up to roll out customized TV offerings for both small to mid-sized businesses (SMBs) and large enterprises, including banks, medical offices, TV stations, content distributors, TV producers, bars, restaurants, hospitals, auto dealers, hotels, schools, health clubs, and other companies and institutions.

Up to now, it has been loosely estimated that about 2 million SMBs across the nation subscribe to some type of cable-delivered TV service, along with a number of bigger firms. Yet the cable industry, more attuned to residential rhythms, has never really gone after the commercial video market in a systematic way. Nor does anyone really seem to know just how big the commercial video opportunity is.

This situation is starting to change. For one thing, one large North American MSO, whose name we can't disclose quite yet, has identified a $2 billion market for commercial video services in its territories. It plans to pursue this market by developing specially targeted video products, such as health programs for doctor and dentist office waiting rooms or auto-safety shows for car-dealer service areas.

At the same time, Cablevision Systems Corp. (NYSE: CVC)'s Optimum Lightpath commercial unit has just launched an Ethernet-based managed video service for media firms in the New York area, including broadcasters, production facilities, TV stations, and content distributors. Known as Lightpath Managed Video, the carrier-class service is designed to provide connectivity as well as encoding and decoding of digital video.

Optimum Lightpath executives estimate that there's about a $100 million market nationally for this type of niche video service. Given New York's status as the nation's media capital, this means that Cablevision's opportunity probably amounts to about $30 million to $40 million.

One New York production studio, Ascent Media Group LLC , has already signed up for the managed video service. Optimum Lightpath officials expect to sign up several other commercial customers by the end of the year.

In one more sign of surging cable interest in the commercial video space, Cable & Telecommunications Association for Marketing (CTAM) is now looking for a way to size up the market for its MSO members. The cable marketing organization particularly plans to analyze the SMB sector, examining which segments of the sector would be the most promising.

So it looks like cable may have finally discovered business video. Good thing it only took the industry about 60 years.

— Alan Breznick, Senior Analyst, Heavy Reading

Be the first to post a comment regarding this story.
HOME
Sign In
SEARCH
CLOSE
MORE
CLOSE