Large Cable Operators Gear up for Switched Digital Video Rollouts
After years of tire-kicking, most large U.S. and Canadian cable operators finally are rolling out, or preparing to roll out, switched digital video technology to save digital spectrum for more profitable uses. The biggest North American cable companies -- Comcast, Time Warner Cable, Charter, Cox and Cablevision Systems -- are deploying or preparing to deploy switched digital video, trying to bolster their competitive positions against DirecTV, Verizon and other multichannel video rivals.
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With DirecTV and Verizon each planning within months to offer more than 100 national HD channels, cable operators want to increase their high-def offerings from an average of about 25 to 30 channels to as many as 100 the next few years. In recent months, Cox, Charter and Cablevision executives have spelled out plans to offer more HD channels.
Cable operators also are embracing switched digital as a way to make room for time-shifting applications, faster broadband services, advanced voice products and addressable advertising, and other future developments. By switching up to 200 standard digital channels, they can clear enough spectrum for 100 more standard digital channels, up to 30 HD channels or far greater broadband and VoIP capacity.
Time Warner has been the most assertive. By November, it had deployed switched digital video in nearly 20 markets nationwide, including Milwaukee, San Diego, Kansas City, Hawaii and several cities each in North Carolina and Ohio. Plans call for expanding the technology to as many as 75 percent of homes passed by year-end and throughout Time Warner markets in 2008.
Besides saving bandwidth by switching as many as 175 channels per cable system, Time Warner has relied in many markets on its new switched digital video architecture to launch a popular new service, “Start Over.” A PVR-style service viewers can use to pause and rewind programs after they've begun, Start Over had served up replays of as many as 22,000 broadcast and cable shows in a month. TW, which was offering the service in six regional divisions at the start of 2007, aims to have it in 12 more markets by January.
Time Warner pioneered switched digital with vendor BigBand Networks earlier in the decade. But now it has plenty of company. At the beginning of the year, Cablevision installed the technology throughout its sprawling New York metro system to handle a new 60-channel package of ethnic and international programming. Since then Cablevision has raised the number of switched channels to 70 standard digital networks and begun adding HD channels.
Cablevision, which carries 42 HD channels, plans to add more high-def networks as soon as possible. “We have the capacity to carry as many HD channels as can be launched,” Cablevision COO Tom Rutledge told analysts during the company’s third quarter earnings call last month. “We are prepared to launch additional HD channels as they become available to us.”
The past few months, Cox and Charter have followed suit, running extensive field trials followed by pilot deployments. In late September, for example, Cox launched commercial switched digital video service in its 242,000-subscriber system in northern Virginia. Plans call for putting the technology in two more big markets -- Orange County, Cal., and Phoenix -- by early next year and other markets selectively after that.
As often happens, Comcast has lagged somewhat. But now Comcast, which was focusing on video-on-demand rollouts, is trying to catch up. Having budgeted $150 million in capital spending for switched digital video deployments this year, Comcast is running extensive field trials of the technology in Cherry Hill, N.J., and Denver. If all goes well, the company hopes to roll out switched digital in several undisclosed systems by early next year and most of its other markets before 2009.
With the five biggest cable operators on board with switched digital video, other sizable cable operators are expected to follow. Sources in industry say such major operators as Bright House, Rogers, Shaw, Cogeco Cable and Videotron are eyeing switched digital launches in 2008. Others, like Suddenlink Communications, are preparing for field trials by next summer. “It is on our radar screen,” said a Bright House spokeswoman.