Cable Industry

Spotlight: Time Warner Cable eyeing web video

Dan O'Shea — Tue, 03 Jun 2008 10:20:21 -0400

Time Warner Cable has given indications recently that it is exploring whole-home networking solutions. It joined the Multimedia over Coax Alliance, and company CEO Glenn Britt told attendees at an investor conference last week that the cable firm was looking at a possible wireless home networking solution, one that also would bring Internet video to TV screens. It's not clear what TWC is thinking about, or whether it will use both MoCA and wireless in some fashion, but according to Britt, we'll see something from the provider within the next couple years. Read the story at Light Reading's Contentinople

Related article:
Time Warner Cable recently became MoCA's largest cable industry member Time Warner Cable report

Cablevision adds video subs, strikes Newsday deal

Tue, 13 May 2008 06:59:40 -0400

While some cable TV companies are taking an obvious hit from telco IPTV competition (see Comcast), others may not be seeing much of an impact. Cablevision Systems last week said it added 41,000 digital-video subscribers and 2,000 basic-video customers to its current 3.1 million video subscribers during the first quarter of this year, adding that it has seen little impact from Verizon Communications' FiOS service. The company also has moved aggressively into Verizon's traditional segments with its Optimum Lightpath data and voice services. In addition, the company said it will spend more than $300 million on rolling out Wi-Fi technology in the New York metro area and on Long Island over the next two years.

This week, Cablevision made another intriguing, though somewhat puzzling move, saying it will pay $650 million to acquire most of suburban newspaper Newsday. Arguably, Newsday could help Cablevision competitively by giving it more promotional heft for its offerings against whatever marketing blitz competitor Verizon may muster. It could also create cross-selling opportunities for advertisers that might be thinking of moving more money over to IPTV platforms. Still, newspapers as medium are weakening by the hour, so the benefits could be short-term at best.

For more:
- See this story about earnings and another about the Newsday deal at The Wall Street Journal
- and Cablevision's quarterly results

Related articles:
- Cablevision's Newsday deal seems unlikely to start a trend. Cablevision report
- Cablevision to rollout WiFi network. Cablevision WiFi report

Top European IPTV drivers

Tom Burton — Tue, 11 Mar 2008 11:04:24 -0400

Western Europe leads the world in IPTV deployment, but big differences between country take-up rates reveal the key drivers and impediments critical to IPTV growth.

Just seven of 17 Western European countries account for 94 percent of all IPTV customers, according to the latest edition of TV Markets Quarterly Monitoring from InfoCom. The seven leading IPTV players, France, Belgium, Italy, Netherlands, Norway, Spain and Sweden had an estimated 6 million IPTV subscribers as of December 2007. France dominates that group with 4.3 million households watching IPTV.

The concentration of IPTV growth within a handful of markets reflects strong national differences in communications infrastructure, competition, pricing, regulation and broadcasting and pay-TV cultures. Cesar Bachelet, ABI Research’s senior analyst for multi-channel Video says much of France’s leadership in the IPTV market stems from its regulator strongly policing the unbundling of the local loop from an early stage.

This gave alternative operators more control over the services they offer and the ability to deploy technologies such as ADSL2+ without relying upon the incumbent telco. This in turn has spurred strong competition in the fixed telecommunications arena, resulting in attractively priced triple-play packages.

At the same time, the cable industry had until recently been fragmented and faced stiff planning restrictions on the placement of satellite dishes. This forced leading content owner and DTH operator Canal Plus France to cooperate with IPTV operators to deliver its premium channel packages through IPTV infrastructure.

Bachelet has just published a Global IPTV report for ABI covering all the major markets. Bachelet says France’s strong “practical” enforcement of local loop unbundling (LLU) early on is in contrast to many other European countries, where LLU was not so effectively enforced at the beginning.

In France, the emergence of three major providers--Orange (France Telecom), Iliad’s Free and Neuf Cegetel--has seen a strong head-to-head battle for market share. All major operators offer basic triple play packages priced around 30 euros (about $45.60) a month. Bachelet says this makes the actual incremental cost of getting IPTV only about five euros ($7.60): “Consumers who have signed up for broadband access and fixed voice and can therefore get digital TV at little additional cost.”

Iliad, which trades under the name Free, is easily the largest IPTV deployment in the world with 2.4 million IPTV-enabled customers as of end 2007. FT reported 1.2 million IPTV subscribers and Neuf 750,000 subscribers. All carriers enjoyed rapid growth in the final quarter of 2007.

The dynamic take up of IPTV in France contrasts with Germany where Deutsche Telecom has had to drop its prices twice in an attempt to kick start demand. Bachelet says the German market is very price sensitive with low average TV ARPU rates. But with the local cable system still very much analog he says DT has a “window of opportunity” to grow its market. DT cut the subscription price by 25 percent last year and re-branded the service to Entertain IPTV.

Late January it announced an aggressive target of 500,000 IPTV subscribers by the end of the year, a 350,000 growth over the year. And at CeBit, the big telco this month surprised the market again with another 17 percent price cut to bring the basic package down to 49.95 euros ($75.92) a month. As with France the basic triple play price--including IPTV--is now only moderately higher (10 euros—or $15.20--per month) than the double play--internet and voice—price.

The use of discounting to grow the market has been most aggressive in Sweden where Bachelet says the local telco, TeliaSonera, has offered basic IPTV for free as part of a triple play bundle. TeliaSonera has expanded in Estonia and Lithuania and late last year said it would move into Finland where it already has a cable television service. It had 300,000 Swedish customers at the end of the year and 50,000 in Estonia and Lithuania and recently began a Video on Demand program in association with Disney and Discovery.

According to InfoChoice, it is in those markets, where carriers have faced well-organized cable operators, where IPTV has struggled to gain significant traction. A combination of satellite and cable TV are the preferred platforms in Austria, Germany, Switzerland and Luxembourg. Cable is often bundled into a set fee for town houses and other multi-apartment developments. Cable is frequently delivered as a utility service, like gas or electricity, to tenants who have little say over which services they receive.

IPTV has similarly struggled in the U.K. where the presence of a strong pay-TV operator, News Corporation’s Sky Television, has made it difficult for BT or any other player to gain a significant market position. But unlike parts of mainland Europe, SkyTV is not considered a utility service and has had to win market share off its own back.

In the late 1980s it was launched into a market with a limited number of free to air channels and no pay-TV and gained its market strength through the 1990’s by securing key football rights. “Sky is a smart operator, having acquired ISP Easynet to deliver a triple-play package to its customers, featuring free entry-level broadband access,” says Bachelet.

Other ISPs are also offering free or heavily discounted broadband access, which lessens the appeal of BT’s triple play package. In the U.S., Verizon executives have confirmed it is the attraction of high-speed internet rather than multi-channel television that is selling subscribers to its FiOS service.

Another key handicap for IPTV in the U.K. is the low access speeds on its core networks. BT currently uses R-ADSL, which delivers maximum download speeds of up to 8 Mbs. Although there are now plans to upgrade to ADSL2+ in France, ADSL2+ infrastructure has already been widely deployed and major operators are starting to roll-out fiber in the major cities.

The use of smart programming offers has also been behind the success of Belgacom’s IPTV service, which had more than 250,000 subscribers at the end of 2007. Not only did it secure the Jupiler League soccer rights for three years prior to its launch in 2005, Belgacom has also been able to secure a deal with Warner Bros. to provide selected feature film titles on demand at the same time as they are released to DVD. This has proved to be a key driver in its take-up rates in Belgum.

Belgacom has had more success in the southern French-speaking Walloon region because of the lack of a strong cable operator. In the north, there is one dominant cable operator that is digitalising its service. “As in some areas of the U.S., the presence of a digital cable operator has meant consumers can get many of the services IPTV can offer such as DVRs and true VOD,” says Bachelet. But, in markets where the cable operator is still largely analog, telcos have seen an opportunity. This is the case in Germany and most of Central and Eastern Europe, where the incumbent telco has faced largely analog cable networks.

Spanish cable operator ONO has a predominantly digital subscriber base but this has not stopped Telefonica from emerging as one of the most successful incumbents in the European market. With more than 500,000 subscribers, it is the second-biggest incumbent player in Europe. Unlike DT which delayed its IPTV investment, Telefonica launched its Imagenio IPTV service back in 2004 and got early success in a country where there was not significant pay-TV penetration.

In Italy, despite the lack of a cable industry, IPTV has struggled. Competitor carrier Fastweb was one of the first players to offer IPTV, but until recently it was held back by its limited reach and Italy’s low propensity for pay-TV services. It has only 170,000 subscribers to show for the six-year-old service. Indeed, DTT (digital terrestrial TV), which combines free-to-air television with an option to pre-pay for premium content, notably Serie A soccer , has been much more successful to date.

Lack of competition also reflected inflexibility in the triple-play offering, but this has recently changed as competitors Telecom Italia, Wind, and Tiscali started to roll out their services. Bachelet believes there may also be a cultural issue at play with the climate and social habits creating a lifestyle not conducive to increase television watching.

Looking out, the biggest change is likely to be regulatory, with the EU pushing for greater and more consistent access to the local loop, as well as incumbent NGNs (next-generation networks). The EU and Germany are at loggerheads, and backed by new local legislation DT has been reluctant to open up its new high-speed VDSL exchanges for wholesale access by competitors. It last week filed a proposed wholesale pricing agreement with the local network regulator.

It has been the ability for multiple providers to access the local exchanges that has driven France’s rapid deployment of IPTV. How the EU manages this issue will determine if Europe is able to maintain IPTV leadership. Alternatively there is a risk of being left in a regulatory stalemate, with providers and carriers unable to roll out new services. This will be especially so in markets where IPTV take-up remains relatively low, such as the U.K. and Germany.

Other growth opportunities center around the next generation of services. Several carriers are now promoting media streaming services, enabling subscribers to access PC-based video content on their TV set, and a variety of blended services, such as caller display on the TV.

Bachelet also points to the impending upgrade to MPEG-4 compression standard so as to enable HD television as an opportunity for vendors. Broadly the drivers that have created the favourable conditions are expected to continue and, if anything, improve. With the impending analog switch-off of terrestrial TV--which will occur at different times throughout Europe--IPTV operators are positioning themselves as one of the possible choices for digital TV.

ABI estimates there are currently 7.2 million IPTV households across both west and east Europe. It predicts this market will quadruple over the next five years to 30.3 million subscribers.

Sewer pipes to deliver fiber cables

Tom Burton — Tue, 29 Jan 2008 06:59:30 -0500

Many have dreamed of using the sewer lines to run high-speed cable networks into neighborhoods. No digging , easy access, protected from weather and, apart from the smell, far less problematic than running cable down power poles. Now a British company is giving it a go: Merseyside-based H2O Networks is rolling out a fiber network using sewer pipes to bring network cables to homes in three proposed FiberCity proposals.

The plan has been six months in the making and is expected to see physical work begin in September with the roll out likely to take around 18 months for what is expected to a 100Mbps network. The Register reports an engineer saying running the (submarine) cable down the main sewer line is relatively easy, but bringing it into the home is more problematic.

H20 is a retailer but is also going to wholesale the fiber to others who want to access the network. Not sure if this is going to catch on everywhere, but it makes sense in any post-World War II development. Installation is by robot and during the dot-com boom a number of cities--including Indianapolis and Albuquerque--completed some fiber roll outs using the storm water drain rather than the sanitary drains.

For More:
- 100Mbps sewer broadband roll out coming your way Article
- Portland had a consultant do a study on fiber down the sewer Report

Related articles:
Verizon hits hurdles over fiber network Report
Simplicity, not price, is key to IPTV adoption Report

HBO makes online video hard

Tom Burton — Tue, 22 Jan 2008 06:59:20 -0500

What is it about media companies? Time Warner may own one of the big internet portals, AOL, but when its subsidiary HBO released its new download product for HBO's widely acclaimed drama series, many wondered why they had bothered.

To get it you have to pay a monthly fee, live in Wisconsin, have a PC, apply for a CD (yes CD!), subscribe to a Time Warner cable company and subscribe to HBO. Even then you only get it at your home because the service is tied to your cable footprint. Bad luck if you are an HBO satellite subscriber, and, no, you can't get it in HD! About six episodes will be available and each download will have a shelf life of a month.

Yes, it's a trial, but with so many old media conditions to navigate and protective hoops to jump through, how many are going to sign up for the service? HBO is a premium brand and has been very tentative in its online play, fearing widespread copying and cannibalization of its existing channels through pay TV.

Trying to create an exclusive software portal for your own content is about as old as AOL's walled garden business model, and suggests Time Warner is only making the move online with HBO as a defensive measure rather than using its strong media brands to spearhead its strategy.

Meanwhile, I defy anyone to find a college-aged male who has not watched a copy of HBO's male version of Sex in the City Entourage from the Internet, though Limewire or the other dozen P2P services offering copies.

For More:
- HBO on Demand Site
- HBO's Baffling Broadband plan Article

Related articles:
Time Warner needs a visionary Report
Time Warner launches B2B IPTV Report

FCC's Martin looking lonely

Tue, 27 Nov 2007 06:59:40 -0500

Just two weeks after FCC chief Kevin Martin floated his re-regulation of big cable idea, he looks decidedly isolated with fellow commissioners and congressional members of both flavors seriously questioning the move. In Washington, the Cable lobby wasted little time pulling in favors owed and in the days ahead of Tuesday's meeting there has been report after report suggesting Martin is not going to be able to deliver his proposal.

An editorial Monday in the conservative Wall Street Journal featured a long piece denouncing both the methodology and intent of Martin's re-regulation proposal. It began: "With all due respect to Kevin Martin, we're beginning to wonder if the head of the Federal Communications Commission knows the first thing about the cable industry he regulates."

Even the broadcasters--traditionally not a close friend of the cable industry--offered their protest. Ahead of the meeting Martin was trying to salvage something of his plan and how it impacts on both current and new players in the broader video market place was unknown. But having fired both barrels and being forced to back off, Martin now risks joining his president in what could be a long and not productive run up to next year's election.

More Reports:
- FCC plays monopoly Wall Street Journal editorial
- FCC plan at Risk Wall Street Journal Report
- New York Times reports Martin is struggling to get the votes

Related articles:
- Kremlin media regulation Report
- FCC, cable TV debate '70/70' Report

TiVo and cable team up

Tue, 27 Nov 2007 06:59:30 -0500

Switched video remains cable TV's principle weapon against telco and satellite incursions and for many is the reason why IPTV will struggle to make inroads in the U.S. market. Hence, why everyone should take note of the alliance this week between TiVo and the cable lobby the National Cable and Telecommunications Association.

Tivo of course is the brand behind the box which records TV to a hard drive and then replays it--sans ads if you like. The announcement was for an adapter that enables TiVo's CableCARD-enabled DVRs to view switched digital channels--no extra set top box required.

"We are gratified that the cable industry has agreed to work quickly to develop a solution that will enable existing TiVo CableCARD DVRs to directly access switched digital cable channels and ensure the adapter is part of an easy installation process for cable subscribers," said TiVo CEO Tom Rogers. Cable operators will make the new adapters available for TiVo customers in the second quarter of 2008. Cable operators and TiVo will work cooperatively to alert TiVo customers about availability of the new adapter.

Switched digital enables cable operators to transmit channels to customers on an as-needed basis, and provides flexibility to deliver interactive digital services, HDTV, broadband Internet and digital phone services down one pipe.

Which is what IPTV is also promising.

More Reports:
- TiVo and NCTA alliance Release
- NBC to use TiVo's TV Viewership Data Wall Street Journal Story

Related articles:
- Analyst: IPTV will kill TiVo Report
- BigBand demos IPTV delivery technology for cable Report

FCC cable numbers disputed

Tue, 20 Nov 2007 06:59:40 -0500

Federal Communications Commission chair Kevin Martin has a habit of detailing how the FCC will vote ahead of its actual meetings. But his plan to hit big cable with new regulations seems to have his fellow Republican Commissioners offside. Martin claimed cable now had a market share in excess of the 70 percent needed to invoke regulations--a figure hotly disputed by the cable lobby, the National Cable and Telecommunications Association. The NCTA let lose at Martin accusing him of trying to "hurt the cable industry" and declaring the FCC "broken."

What exactly Martin wants to do was unclear as by week's end he seemed to be walking away from any plan to break up bundled content offerings and force the cable companies to allow customers to pick whatever programming they wanted.

Meanwhile over at the FCC, commissioners Deborah Tate and Robert McDowell expressed reservations about the data Martin was using. They released a letter asking the Warren Communications News--which compiles the data for the FCC-- to send them "all information" regarding the market data, including any "caveats" or "footnotes" to the statistics.

Tate and McDowell wrote: "As you are aware, over the past three years, our Report has found cable subscribership hovers around 60 percent. With the increase in competition from satellite and phone companies, most large cable operators report a decline in subscribership. Thus, it was surprising to learn that Warren Communications reported a 71.4 percent subscribership rate this year, especially considering the two other major independent research outlets found rates at 61.1 percent (Nielsen) and 58.1 percent (Kagan)."

So much for the consensus Martin was trying to create; it also leaves his cross media deregulation plans vulnerable as opponents seek to exploit Martin's apparent lack of support.

More Reports:
- FCC Chair Martin looking lonely on anti-cable crusade Report
- MSNBC Report

Related articles:
- Kremlin rules Report
- FCC, cable TV dispute "70/70" Report

U-verse given the green light in Connecticut

Tue, 06 Nov 2007 06:59:50 -0500

AT&T has been granted a franchise for its IPTV U-verse service in Connecticut after a state court overturned a decision by the local utility regulator which required U-verse to have to get a franchise in each area in which it wanted to operate. The decision is an important precedent and clears the way for similar state-level clearance to facilitate the rapid roll out of the broadband infrastructure necessary to support IPTV and other high access services. AT&T becomes the first competitor to offer television services under a new state law designed to increase competition with the cable industry.

The decision was a blow for Comcast and Cablevision who now face an aggressive roll out of a high profile competitive service. AT&T was of course chuffed: "We are pleased that the DPUC has taken this step on behalf of Connecticut consumers who have long desired more choice in the video marketplace. Credit also goes to our state's legislators and Governor Rell, who passed a forward-thinking new law that encourages competition," AT&T Connecticut President Ramona Carolow said.

Also happy were the unions, with 1,300 workers idol since the mid-October decision that stopped the roll out. Union chief Bill Henderson, said the court made the right decision and union members, who have been working since Dec. 16, 2006 installing the service, can get back to creating a new fiber-optic system to serve customers.

For More:
- AT&T wins statewide Connecticut franchise Report
- DPUC Issues Certificate For U-Verse Report

Related Articles:
Connecticut franchise battle continues Report
U-verse avoids Connecticut regulators Report

Connecticut franchise battle continues

Tue, 09 Oct 2007 06:59:10 -0400

The attorney general in Connecticut is not backing down in his quest to make sure AT&T's U-verse is subject to the same requirements as cable TV operations. Attorney General Richard Blumenthal's latest volley is a public request that AT&T's franchise application be rejected, which seems counterintuitive on its face. Blumenthal fought to make AT&T obtain a franchise license from the Connecticut Department of Public Utility Control in August. The PUC was all about letting AT&T slide, but a federal judge suggested otherwise.

The PUC later denied Blumenthal's petition to make AT&T get a franchise license, but it appears that the resurrected Bell did so anyway, because Blumenthal issued statement urging its denial.

"This new application by AT&T seems to accept that they must seek a franchise, but makes a sham of meeting the franchise requirements," he said. Blumenthal wants AT&T to have build-out requirements typical of cable franchise agreements.

"I will continue to vigorously fight to assure that all Connecticut consumers enjoy the full benefits of competition and choice," he said. "All citizens should have access--not just residents of wealthy or readily served areas. AT&T cannot be allowed to cherry pick customers and deny others the same right."

Opposing Blumenthal are an army of lawyers, lobbyists and accountants who have carefully calculated the areal penetration return-on-investment for U-verse and determined that hired guns are cheaper than building out across the tracks. It's really that simple.

For More:
- Blumenthal's statement is posted here

Related Articles:
U-verse avoids Connecticut regulators Report
Connecticut franchise fight continues Report