Video Competition Seeks to Trump Cable

MSOs continue to tout the notion that 'only cable can' can offer advanced interactive television services like video on demand (VOD), as telcos are limited by bandwidth and satellite players lack two-way capabilities. This is complete nonsense, of course. Yes, cable HFC networks provide more capacity and robust interactive capabilities than any network but FTTP, but other solutions can deliver compelling consumer video services. And they were on display at CES last week. At the top of the list is the much ballyhooed 2Wire-SBC-Yahoo!-DISH integrated satellite DVR (digital video recorder) set-top and broadband home networking gateway. Forget the FTTP and FTTN hype from U.S. telcos, hybrid satellite/DSL solutions like this SBC-DISH combo are actually cable's greatest threat. DISH delivers a world-class broadcast digital video product (as does DIRECTV), and by adding broadband to the satellite DVR box via DSL, they can easily support either streamed or download and play VOD services off the disk. From the consumer's perspective, it will appear comparable to what MSOs offer, and it can be turned on almost immediately nationwide without the time delay or cost penalty of rolling out backhoes to upgrade a telco's network. SBC aside, DISH demoed its own PVR solution with an expanded hard disk that can store up to 30 movies pushed down to the drive by the satellite provider. And DIRECTV demoed its new home media center, which uses whole-house DVR software from Ucentric Systems, raising the bar on cable's offerings. Broadcom also unveiled its new low-cost IP set-top design at CES, providing more ammunition to cable's foes. Serious video competition is knocking at the door. Cable cannot afford to be complacent.
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