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IPTV's High-Def Holdup

Light Reading
News Analysis
Light Reading
9/25/2006

It's been widely reported that IPTV rollouts aren't happening as quickly as hoped, but the root cause of that sluggishness is tough to pin down. Many in the industry say a scarcity of MPEG-4 high-definition (HD) chips for set-top boxes is to blame. However, some say the slow pace is caused by difficulties making IPTV software and networking hardware work well together, then scale to accommodate millions of subscribers. (See Scaling IPTV: Progress at SBC .)

Whatever the cause, at least one of the problems will be on its way to being solved toward the end of this year as AT&T -- arguably the most watched IPTV deployment -- prepares to offer high-definition TV services and set-tops in 15-20 markets.

The chip blip
Meanwhile, carriers are waiting to use set-top boxes that support MPEG-4 compression because that standard is far more bandwidth-efficient than previous methods. That's especially important to carriers relying on copper phone lines to get video to the home.

“Everybody’s waiting for it, the whole market’s been waiting for those boxes,” says SureWest Communications (Nasdaq: SURW) strategic technologies director Carl Murray. “We monitor this pretty closely, and a lot of them are saying that the boxes will be available by the first of the year; but then again we’ve heard that before.”

ThinkEquity LLC analyst Anton Wahlman suggests the middleware integration problems were the first cause. In a recent research note, Wahlman writes that the scarcity of HD chips for IPTV set-tops "is due to numerous reasons primarily involving middleware and operating system integration issues."

Immature, indeed
If central players such as Alcatel (NYSE: ALA; Paris: CGEP:PA) and Microsoft Corp. (Nasdaq: MSFT) are having trouble making IPTV work, why would chip vendors rush high volumes of chips to an immature market? “Yeah, good question,” replies Aidan O'Rourke, VP of IPTV products at chip maker Broadcom Corp. (Nasdaq: BRCM) (See Microsoft, Alcatel Renew Deals.)

"If you were to look at the U-verse deployment, I think everybody knows they are significantly behind schedule for the roll out of the service," O'Rourke says. “It’s not really the availability of the set-top boxes or the chipsets." O'Rourke adds that "system-level issues" are to blame for IPTV delays. (See AT&T Still Has IPTV 'Jitters'.)

“Well, his chip’s not ready,” Microsoft TV CTO Peter Barrett replies. Barrett, credited as the chief architect of Microsoft’s IP video distribution system for telco and cable systems, says he doesn't buy Broadcom's explanation. “If there have been system integration problems, or if the system didn’t run, then what have people been watching in San Antonio for the past ten months?”

A high-def holdup?
STMicroelectronics NV (NYSE: STM) and Sigma Designs Inc. (Nasdaq: SIGM) claim to be the first to ship its MPEG-4 HD "system-on-a-chip" products to set-top box makers. The two companies say they've been shipping their HD MPEG4 chips since early this year, while Broadcom says it will begin shipping its product late this year.

“If deployments continue on the track they’re on we’ll be shipping a million units per quarter into IPTV by the fourth quarter this year,” says Sigma Designs VP of strategic marketing Ken Lowe.

AT&T says the new HD set-top boxes will be available when the U-verse service spreads beyond San Antonio later this year. “We are using them in testing right now,” says AT&T spokesman Wes Warnock. “I’m not going to comment on order volumes or anything like that, but we are testing them today in Houston as we said we would.”

“We said we were going to launch in 15-20 markets, that’s starting late in the fourth quarter, and when we do launch in those markets we’re going to have HD available to customers,” Warnock says. (See Is Lightspeed Slowing?)

But what of all the alleged integration problems holding up IPTV rollouts? Microsoft says it's got a difficult job, but not one that has it beat.

“We’re kind of an easy target,” says Microsoft spokesman Jim Brady. “In the cable world, rollouts take years and years and years, you look at DSL rollouts, DSL took years. We don’t want to come off as defensive, but we feel really good about where we’re at, and the opportunity’s still there.” Barrett says Microsoft has around 200 people working on IPTV right now.

Microsoft says in the next few weeks it will announce that several of its IPTV set-top box partner companies -- namely Philips, Motorola, and Scientific-Atlanta -- have begun shipping the new MPEG-4 HD boxes in quantity to its carrier customers.

— Mark Sullivan, Reporter, Light Reading

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Honestly
Honestly
12/5/2012 | 3:39:44 AM
re: IPTV's High-Def Holdup
Remove all of the competitors FUD and envy and be a bit patient and I think IPTV will blow your mind. The features that I have seen are really dude nirvana.

I hear that San Francisco will have some IPTV trials by years end.

This stuff is real
trzwuip
trzwuip
12/5/2012 | 3:39:43 AM
re: IPTV's High-Def Holdup
In the IOC space there are several carriers that have purchased MPEG-4 IPTV Head Ends and there are DEFINITELY NO Set Top Boxes ready for market. The carriers are getting pissed off as their bills for the infrastructure are coming due and they cannot get any revenue from customers.

The products that are "shipping" are getting daily software updates from the vendors in an attempt to fix the "bugs" but flat out the stuff doesn't work yet.

I am sure that it will, but in the interim you have a lot of frustrated carriers. So, if your are considering MPEG-4 IPTV, get ready for deployment, but don't buy and pay for any equipment until you hear from the carriers waiting to deploy now!
laserboy
laserboy
12/5/2012 | 3:39:43 AM
re: IPTV's High-Def Holdup
Perhaps it is just me but IPTV is the same video content delivered via a new network infrastructure and similar prices albeit with annoying targeted advertising... where's the beef?
issey
issey
12/5/2012 | 3:39:43 AM
re: IPTV's High-Def Holdup
How much are the Encoders required to encode HD content .. what is the amount required to invest in the Headend ready for High Definition Vs the method of sending over a RF overlay solution...
Michael Harris
Michael Harris
12/5/2012 | 3:39:41 AM
re: IPTV's High-Def Holdup
Perhaps it is just me but IPTV is the same video content delivered via a new network infrastructure and similar prices albeit with annoying targeted advertising... where's the beef?

It's true that IPTV generally is still not much more than using an alternate transport scheme for existing broadcast and on-demand digital video services. That said, some of the cool and differentiated features IPTV can enable include faster channel changes, richer picture-in-picture apps and program guides, personalized navigation and channel line-ups, as well as niche video content.

How much are the Encoders required to encode HD content .. what is the amount required to invest in the Headend ready for High Definition Vs the method of sending over a RF overlay solution...

Seems there shouldn't be much difference from an encoder perspective. Though, more video processing capabilities would be required for HD delivery in a switched video environment. Any other thoughts out there on this?
tsat
tsat
12/5/2012 | 3:39:41 AM
re: IPTV's High-Def Holdup
I would love targeted advertising. I mean, if I never have to see a Chevy Truck ad again, I would be a happy man.

-tsat
tmc1
tmc1
12/5/2012 | 3:39:40 AM
re: IPTV's High-Def Holdup
I cannot see people switching in waves from cable/satellite for faster channel changes, picture-in-picture apps and program guides, personalized navigation and channel line-ups, as well as niche video content. That said, most of this is available via the Cable MSOs today! Content is king!
----------------------------------------------

I don't know about you laserboy but my MSO has outages quite frequently and serious dropouts and glitches on HDTV picture that do not appear to be related to signal strength but perhaps some BW problem in their HFC plant. They also only offer about 10 HD channels and charge me through the nose for them. I would love to have another reasonable alternative and I would love someone who could guarantee me far fewer glitches per hour and provide more channels in HD (better quality - less compression would be nice too). I actually missed a key moment in a movie recently and had to rewatch it later to figure out what happened. That is quite unacceptable to me but some of the MSOs have adopted the cellphone version of quality and there is not much you can do except switch to sattelite. I welcome IPTV with open arms.
laserboy
laserboy
12/5/2012 | 3:39:40 AM
re: IPTV's High-Def Holdup
I cannot see people switching in waves from cable/satellite for faster channel changes, picture-in-picture apps and program guides, personalized navigation and channel line-ups, as well as niche video content. That said, most of this is available via the Cable MSOs today! Content is king!
laserboy
laserboy
12/5/2012 | 3:39:38 AM
re: IPTV's High-Def Holdup
tmc1, why would you think that IPTV would be any more reliable than Cable MSO delivery vehicles? Do you think that the complexity of IPTV networks and its many different vendors will make this more reliable than Cable MSO networks? Also, more complex IPTV networks should cost more than Cable MSO networks to build and maintain so why would you think video service will cost less? I welcome competition as well but do not see IPTV as the video delivery panacea. My two cents.
straight shooter
straight shooter
12/5/2012 | 3:39:38 AM
re: IPTV's High-Def Holdup
Look Vonage and Verizon (Voicewing) and their suppliers Cisco, DLink, et. al. can't even get VOIP to work down here in Texas. Don't hold your breath for IPTV delivery and expect tons of problems when it shows up.
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