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Cable Technology Feature Article

April 05, 2014

Cable Technology Week in Review

By Tara Seals, TMCnet Contributor

The top news this week was undoubtedly the fact that Amazon has finally gone to market with its hotly anticipated over-the-top (OTT) set-top box, dubbed the Fire TV. At $99, the tiny box directly takes on both Apple TV and the Roku 3, but it packs in a series of differentiators that Amazon is banking will be enough to make the gambit a success. But analysts were mixed on the outlook for the device, to say the least. In fact, some were downright negative. As Stock Trader Daily analysts put it rather bluntly, “The introduction of a set-top box by Amazon is a huge disappointment.” Investment firm Alcaraz on the other hand said that Amazon could have a winner on its hands: “The Fire TV offers more features than other existing streaming devices. It has the same price that of the Apple TV, but Amazon's product has better technical specs and offers more features.” Which will be the right assessment? The answer likely falls somewhere in the middle, given the level of thirst for streaming.

Amazon was rumored to be offering live TV with the STB, but instead, Fire TV is video-on-demand (VOD)-oriented. Content fragmentation caused by content rights agreements and release windows is among the non-technical reasons why widespread video streaming replicating linear video content offerings is taking so long to reach commercial status. But rapid and continuing content rights fees are putting increasing strain on the ecosystem. Of course, one might argue, that has been the case for 20 years, as sports content rights were cited as a growing problem in the 1990s, with annual prices for sports content growing at double-digit rates for the major leagues in basketball, baseball, football and ice hockey.  Nothing much has changed, in that regard, over the past couple of decades. At least so far, the threat of alternative distribution, now a reality for movie and TV series pre-recorded content, has not affected real-time video content such as news or sports. Our analysis breaks down why.

VOD or not, content will play a large part in success or failure of course. And as Netflix’ Emmy-winning success with House of Cards has shown, OTT services can do well when it comes to original fare, even without a linear element. To that end, AOL has commissioned its first long-form video series, "Connected," for inclusion in the AOL On Networks, AOL's premium video platform. The show revolves around the life of five seemingly disconnected New Yorkers as they explore the concept of family in New York City. The five parallel stories unfold and eventually come together in cohesive storyline. "Connected” has experienced success in international markets and will now be adapted for U.S. audiences for AOL. While Connected includes a successful slate of fifteen original series that launched in 2013, it’s AOL’s first acquisition and adaptation of new storytelling format which sees the participants’ film themselves.

With content comes advertising, of course. On that front, media and ratings insight provider Nielsen and Integral Ad Science have announced their intention to broaden their partnership into international markets. In 2012 the two companies partnered up to measure and analyze online advertising in the US within Nielsen’s Online Campaign Ratings, looking at who sees what and where. Now they are taking the venture international, measuring online ads in Australia, Brazil, Canada, France, Germany, Italy and the UK. Nielsen and Integral Ad Science deliver high-quality multi-screen metrics that “enable fair play in advertising,” according to Nielsen EVP and global product leader, Megan Clarken. “When combined, these two solutions represent the only offering in the marketplace to be MRC accredited in the US for both demo-based audience measurement and viewability — a great testament to the value delivered to our clients,” she said.

Speaking of streaming, Level 3 Communications (News - Alert) has teamed up with Elemental Technologies to demo a real-time 4K UltraHD video stream using MPEG-DASH and high-efficiency video coding (HEVC) at the upcoming National Association of Broadcasters (NAB) event next week. Level 3's content delivery network (CDN) will handle the delivery of the 4K video, which will be encoded and packaged by Elemental. The move is timey: with four times the resolution of 1080p HD, 4K video content presents a challenge to traditional compression approaches such as MPEG-2 and advanced video coding (AVC / H.264) in terms of the bandwidth required to deliver it. But that hasn’t stopped companies from working on the content. Parks Associates analysts noted 4K will initially be delivered over-the-top (OTT), with companies like Netflix, Comcast (News - Alert) and Amazon already working on 4K-based offerings.

Not to be outdone, ViXS Systems, a player in media processing solutions, has partnered with satellite giant SES for the world's first end-to-end satellite broadcast of UltraHD 4Kp60 using 10-Bit High Efficiency Video Coding (HEVC). Officials with ViXS Systems said that the ViXS XCode 6400 decoder is a key technology component of SES' end-to-end satellite broadcast of UHD 4Kp60 content encoded in the HEVC Main10 standard and demonstrated during the 7th SES Industry Days in Luxembourg. Company officials claimed that ViXS XCode 6400 is the first and only commercially available real-time decoder for UltraHD 4K content encoded with HEVC main10 profile.

Meanwhile, in subscriber news, the global IPTV subscriber market will see more than 100 million subscribers by the first half of 2014, climbing to around 128 million by the end of 2014. According to the Taipei-based Market Intelligence and Consulting Institute, Asia leads growth in the worldwide IPTV subscriber base, which totaled around 92.7 million in the first quarter of the year, up 23.7 percent year-on-year. In North America, with AT&T (News - Alert) U-verse and Verizon FiOS are actively promoting IPTV services, the North American IPTV subscriber base has arrived at 11.7 million, or 12.7 percent of the global market. Looking forward, MIC said that in Latin America and Southeast Asia, although IPTV services are only in the introduction stage, the fast deployment of domestic fiber networks in both regions is expected to boost IPTV subscribers in the near future.

Speaking of numbers, Comcast has been expected to divest about 3 million cable subscribers as part of its $45 billion takeover of No. 2 cable company MSO Time Warner and more details are now emerging as to how it may do that: it may sell the base to another pay-TV company; or it may spin off the assets into a separate, publicly traded entity. A source has told Reuters that Comcast has already been fielding “strong interest” from potential buyers; and will ask for about $18 billion (valuing each subscriber at $6,000). It should be noted that even post-divestiture, with 30 to 31 million, it would still be a juggernaut in the market: If the deal wins the approval of regulators, AT&T would be the next largest broadband provider, with about 16.5 million customers, followed by Verizon with 9 million subscribers. For pay-TV, DirecTV is No. 2 with about 20 million subscribers, followed by Verizon FiOS (News - Alert) at about 16 million.

Latin America was in the news this week as well. With more than 20 million Facebook accounts and one of the highest pay-TV penetration rates in Latin America, Colombia seems like a good place to launch a social TV solution. Millicom Digital Ventures, a telecommunication and media company, has introduced a free social TV application for finding favorite programs, keeping track of them and sharing them with friends, dubbed mi.tv. Based on users’ preferences, mi.tv will put an end to browsing and flicking across channels by gently guiding users to popular content. It will also encourage viewers to faithfully follow those shows by reminding them when those are being aired, nudging them into sharing their experience with friends. Viewers can also tailor the service to suit their individual tastes.

And then there’s broadband. The growing complexity of data networks, combined with the proliferation of Internet security threats, has required businesses to spend increasing amounts of time managing their networks. Into the breach is Time Warner Cable Business Class (TWCBC), which is adding to its managed services portfolio with the launch of a turnkey solution for the provisioning, configuration, change management, monitoring and remote operations of a customer’s Internet and wide area network services. The appropriately named Managed Router Services (MRS) is being offered in partnership with Cisco (News - Alert) and is aimed at businesses with complex LAN and WAN landscapes, like multi-site organizations.

To check out more details on all of this and more, visit our homepage. And have a great weekend!

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