U.S. MSO Triple Play Service & Infrastructure Report – 2005-2008
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Introduction – Executive Overview
The purpose of this survey is to determine the priorities and plans for new services and support infrastructure among eight major cable MSOs (Multi Systems Operators) in the U.S. representing over 60% of the U.S. cable market.
Based on direct structured interviews with over thirty (30) technical, marketing, strategy and operations MSO managers, and with relevant vendors, the report examines near-term and long-term priorities for new services and for IP upgrades. Research was conducted in Q4, 2004, and a summary of the findings is included in this Executive Overview. The actual names of the participating MSOs are not revealed due to the confidentiality agreement prior to the survey.
Section 1: IP Upgrades
One of the main issues for the eight major US cable operators (MSOs) is the increased use of IP (Internet Protocol) to support the new services. Survey participants reveal that the road to total 2-way IP (Internet Protocol) network could be a long road, and one with many branches and routes. There is no best way to achieve a 2-way IP system, although all of the surveyed MSOs believe that 2-way IP using the best of GBE (Gigabit Ethernet) and fiber holds high promise of improved efficiency and less complexity. Getting to that end point depends on budget, on which applications get first priority, and on the decision of whether to go step-by-step or take a big leap early in going to switched IP.
Table 1-1 above reveals that virtually all U.S. cable systems are IP enabled to support HSD (High Speed Data).
Table 1-2 shows the highest ranking of the IP upgrade goals (with 5 as the highest ranking goal). Unified switching and VHE (Video Headend) consolidation appear the most frequently. (See the full report for details)
Table 1-3 shows the sequence for introducing new services, using examples from MSO #1, #2 and #3.
Section 2: DVR and Related Services
The purpose of this section is to analyze the strategic importance, relevance, and revenue generated by DVRs (Digital Video Recorders) being leased to consumers by major MSOs. This section also captures the importance of various DVR-related features and functions as part of the overall strategy of the MSOs.
Table 2-1 above summarizes the averages of all the eight MSOs in each of the categories listed. For Service Category #1, DVR as Revenue Generator/Churn Inhibitor, all eight of the MSOs are in the stages of deploying (D) it. The total number of subs with DVRs is 2.4 million, with a rating importance of 4 now and 4.7 in the future (5 = highest). For Category #2 the impact of HDTV on DVR Usage, seven MSOs are currently deploying HD and only 1 MSO is in trial (T). The overall rating of importance for this category is 3.5 now and 4 in the future, meaning HD will have increasing importance to DVR usage (and to the overall strategy). For the impact of music on DVR or DVR on music service (#3), the importance of it for now and for the future carries a low rating of 1. Half of the major MSOs are deploying it and the other half are not offering it (N). Outtakes and Trailers for Movie/TV shows on DVRs (#4) also has an average low rating of 1.5 for now and the future. Only one MSO is deploying it and all the other seven MSOs are not participating in offering movie trailers on DVR (but will place trailers on the VOD server instead). Photo Album (#5) and Full Movie Downloads to the DVRs (#6), are also relatively low in importance as DVR features, with an importance rating of 2 for now and 2.22 for the future. Half of the MSOs are studying (S) the Photo Album functions while the other half are not pursuing it; and for the Full Movie Download (#6), only 2 are studying it while the rest are simply not pursuing it. Below is an example of the tables included for each category explaining why it is of high or low of importance.
Section 3: DVR with Advertising Services
This section focuses on the DVR with built in Advertising Services that go beyond movie trailers and music samples (discussed in Section 2). Each of these services requires some degree of interaction with the headend billing system in order to track usage. The Data Tracking activities associated with DVRs in US cable operations are unquestionably the newest, least developed and most controversial of all the categories surveyed in this project. It is new because the technology for doing it is still under discussion and un-standardized. It also is an undeveloped area because the methods for interpreting and standardizing its use have not been agreed upon. It is controversial due to the heightened concern (by consumers) about loss of privacy in the North American market in the past several years. Yet, there is a pressing need for MSOs to come up with innovative ways to replace advertising revenue due to the tendency of DVR users to skip or fast-forward through most ads. So it is important for MSOs to progress as quickly as possible in this area, while being careful not to create public backlash.
Section 4: ITV Services
This section captures the use and prioritization of eleven of the most popular of all ITV (interactive or 2-way) services (excluding DVRs) which cable has developed over the past five years. It also helps identify reasons for high ratings, and identifies which services have the strongest chance of growing stronger in the next 2-4 years.
Table 4-1 lists the ITV Services (Non-DVR) that are analyzed
Sample Table 4-3 shows the top reasons for continued high ratings for VOD. All eleven ITV-categories (shown in Table 4-1) are broken down by MSO in the Full Report.
Section 5
This section provides a summary of opportunities and risks for the top DVR and non-DVR services covered in this survey, and rates the opportunity – level and risk – level for each of the main new or expanded services being planned by MSOs.
It also estimates the relative benefits to users and the role played by IP for each new service. The main findings, as shown earlier, include why and how the DVR came to be a central strategy for the MSOs; what related features and consumer benefits can be turned on with the DVR; and what related on-demand services will generate the best revenue and the greatest competitive advantage against satellite triple-play in the U.S. market. Also covered is why Advertising is one of the most under-rated and mis-understood revenue areas in the U.S. cable business today, and what MSOs can do to address this opportunity.
PDF Single-Departmental License $2,995.00 USD
PDF Corporate-Wide License Ask for a Quote
Introduction – Executive Overview
The purpose of this survey is to determine the priorities and plans for new services and support infrastructure among eight major cable MSOs (Multi Systems Operators) in the U.S. representing over 60% of the U.S. cable market.
Based on direct structured interviews with over thirty (30) technical, marketing, strategy and operations MSO managers, and with relevant vendors, the report examines near-term and long-term priorities for new services and for IP upgrades. Research was conducted in Q4, 2004, and a summary of the findings is included in this Executive Overview. The actual names of the participating MSOs are not revealed due to the confidentiality agreement prior to the survey.
Section 1: IP Upgrades
One of the main issues for the eight major US cable operators (MSOs) is the increased use of IP (Internet Protocol) to support the new services. Survey participants reveal that the road to total 2-way IP (Internet Protocol) network could be a long road, and one with many branches and routes. There is no best way to achieve a 2-way IP system, although all of the surveyed MSOs believe that 2-way IP using the best of GBE (Gigabit Ethernet) and fiber holds high promise of improved efficiency and less complexity. Getting to that end point depends on budget, on which applications get first priority, and on the decision of whether to go step-by-step or take a big leap early in going to switched IP.
Table 1-1 above reveals that virtually all U.S. cable systems are IP enabled to support HSD (High Speed Data).
Table 1-2 shows the highest ranking of the IP upgrade goals (with 5 as the highest ranking goal). Unified switching and VHE (Video Headend) consolidation appear the most frequently. (See the full report for details)
Table 1-3 shows the sequence for introducing new services, using examples from MSO #1, #2 and #3.
Section 2: DVR and Related Services
The purpose of this section is to analyze the strategic importance, relevance, and revenue generated by DVRs (Digital Video Recorders) being leased to consumers by major MSOs. This section also captures the importance of various DVR-related features and functions as part of the overall strategy of the MSOs.
Table 2-1 above summarizes the averages of all the eight MSOs in each of the categories listed. For Service Category #1, DVR as Revenue Generator/Churn Inhibitor, all eight of the MSOs are in the stages of deploying (D) it. The total number of subs with DVRs is 2.4 million, with a rating importance of 4 now and 4.7 in the future (5 = highest). For Category #2 the impact of HDTV on DVR Usage, seven MSOs are currently deploying HD and only 1 MSO is in trial (T). The overall rating of importance for this category is 3.5 now and 4 in the future, meaning HD will have increasing importance to DVR usage (and to the overall strategy). For the impact of music on DVR or DVR on music service (#3), the importance of it for now and for the future carries a low rating of 1. Half of the major MSOs are deploying it and the other half are not offering it (N). Outtakes and Trailers for Movie/TV shows on DVRs (#4) also has an average low rating of 1.5 for now and the future. Only one MSO is deploying it and all the other seven MSOs are not participating in offering movie trailers on DVR (but will place trailers on the VOD server instead). Photo Album (#5) and Full Movie Downloads to the DVRs (#6), are also relatively low in importance as DVR features, with an importance rating of 2 for now and 2.22 for the future. Half of the MSOs are studying (S) the Photo Album functions while the other half are not pursuing it; and for the Full Movie Download (#6), only 2 are studying it while the rest are simply not pursuing it. Below is an example of the tables included for each category explaining why it is of high or low of importance.
Section 3: DVR with Advertising Services
This section focuses on the DVR with built in Advertising Services that go beyond movie trailers and music samples (discussed in Section 2). Each of these services requires some degree of interaction with the headend billing system in order to track usage. The Data Tracking activities associated with DVRs in US cable operations are unquestionably the newest, least developed and most controversial of all the categories surveyed in this project. It is new because the technology for doing it is still under discussion and un-standardized. It also is an undeveloped area because the methods for interpreting and standardizing its use have not been agreed upon. It is controversial due to the heightened concern (by consumers) about loss of privacy in the North American market in the past several years. Yet, there is a pressing need for MSOs to come up with innovative ways to replace advertising revenue due to the tendency of DVR users to skip or fast-forward through most ads. So it is important for MSOs to progress as quickly as possible in this area, while being careful not to create public backlash.
Section 4: ITV Services
This section captures the use and prioritization of eleven of the most popular of all ITV (interactive or 2-way) services (excluding DVRs) which cable has developed over the past five years. It also helps identify reasons for high ratings, and identifies which services have the strongest chance of growing stronger in the next 2-4 years.
Table 4-1 lists the ITV Services (Non-DVR) that are analyzed
Sample Table 4-3 shows the top reasons for continued high ratings for VOD. All eleven ITV-categories (shown in Table 4-1) are broken down by MSO in the Full Report.
Section 5
This section provides a summary of opportunities and risks for the top DVR and non-DVR services covered in this survey, and rates the opportunity – level and risk – level for each of the main new or expanded services being planned by MSOs.
It also estimates the relative benefits to users and the role played by IP for each new service. The main findings, as shown earlier, include why and how the DVR came to be a central strategy for the MSOs; what related features and consumer benefits can be turned on with the DVR; and what related on-demand services will generate the best revenue and the greatest competitive advantage against satellite triple-play in the U.S. market. Also covered is why Advertising is one of the most under-rated and mis-understood revenue areas in the U.S. cable business today, and what MSOs can do to address this opportunity.
Contents
INTRODUCTION: SOURCES & RESEARCH METHODOLOGY-MSOTable I-1: Interview Sources
SECTION 1: IP/GIGE INFRASTRUCTURE
1.1.1 MSO-CATV Infrastructure – HFS Systems + IP Base System Upgrades
1.1.2 Research Focus
Section 1: IP Upgrades
Table 1-1: Average bandwidth allocation by service
Table 1-2 MSOs using QAM for downstream and IP for Upstream (Video)
OCAP May Drive DOCSIS/IP installations for video control
Table 1-3: Status of MSO HSD, 2-way Video &VOIP—2004-2008
Table 1-4: Future IP Plans (by 2008) – Ranked by Importance
Figure 1-1: Upstream Latency Comparison-Aloha vs. DOCSIS
Table 1-5: The anvil of legacy video systems
Figure 1-2: The Silo Problem with IP Control
MPLS in an all IP/GigE MAN Backbone
Table 1-6: MPLS Overview
Figure 1-3: Use of MPLS in Unified IP Cable Service Environment
Figure 1-4: VOD/Video Streaming on GigE/IP Backbone
Table 1-7: VOD Streaming on a Cable IP Network
GIGE Backbone Installs 2004-2008
Table 1-8: MSO GIGE/IP Backbone Networks 2004-2008
Table 1-6:Specific Network Upgrade Plans
Table 1-7: Ranking of IP upgrade Goals (5=Highest)
New IP-Based Services Planned
Table 1-8: Sequence of New IP-based Services
Table 1-9: Priorities for New IP Services (Percentage)
Table 1-10: DOCSIS Version 1 to 3—Functions Enabled
SECTION 2: DVR AND RELATED SERVICES
1.1.3 Analysis/Comments for All Review
Section 2: DVR and Related Services
Introduction and Overview—DVR Myth and Reality
Basic Findings—DVR & Related Services
2.a: Use of DVR as Revenue-Generator/ Churn Inhibitor
Table 2-1: Use of DVR as Revenue-Generator/Churn Inhibitor
Table 2-2: Ranking of Reason for High Importance of DVR (5=Highest)
2.b: Use of DVRs with PPV (Pay Per View)
2.c: Use of DVRs with HDTV (High Definition TV)
Table 2-3: Impact of HDTV on DVR usage
Table 2-4: High Importance of DVR on HD service (5=Highest)
2.d: Importance of Music on DVR
Table: 2-5: Impact of Music on DVR or DVR on Music service
Table 2-6: Why Music Has Low import on DVR Service
2e: Use of Outtakes & Trailers with DVR
Table 2-7: Use of Outtakes & Trailers for Movie/TV Show Promotion
Table 2-8: Why Movie Excerpts Have Low impact on DVR Service
2f: Photo Album Management on DVR
Table 2-9: Photo Album Management of DVR—Importance of Feature
Table 2-10: Why Photo Album Can Impact DVR Service Sales
2.g: Full movie download
Table 2-11: Full movie download service to DVRs—Level of Importance
Table 2-12: Full Movie Download Importance to DVR Service
2.h: VOD/SVOD/FOD on DVR
2.i: Other DVR-related Functions of Importance
Table 2-13: Other DVR-Related Issues & Opportunities
SECTION 3: DVR DATA TRACKING FUNCTIONS
3-a: Collection of Anonymized data from DVR usage
Table 3-1: General Collection of Anonymous Data from DVR
Table 3-2: Reasons for Slow Response to DVR Data Collection
3-b: Commercials watched or re-watched
Table 3-3: Importance of data collection of Ads watched
Table 3-4:Why the Delay on Analysis of DVR Ads Watched
Table 3-5: Importance of DVR Data about Programs Recorded
Table 3-6:Why High Importance of DVR Programs Recorded
SECTION 4: ITV SERVICES (NEWS & UPGRADED)
Section 4-a: OCAP Related Applications
Table 4-1: OCAP Related Applications
Table 4-2 OCAP: Reasons for High/Low Ratings
Section 4-b: VOD Usage
Table 4-2.VOD Priority & Revenue
Table 4-2: VOD Priority & Revenue (Continued)
Table 4-3 VOD: Reasons for Highest Ratings
Table 4-4: VOD Deployment Markets (Q1/04)
Section 4-c: SVOD Usage
Table 4-5: SVOD-Ratings for SVOD
Table 4-6: SVOD-Reasons for Highest Ratings
Section 4-d: FOD Usage
Table 4-7: FOD Usage
Table 4-7: FOD Usage (Continued)
Table 4-8: FOD-Reasons for Highest Ratings
Section 4-e: N-PVR/N-DVR Usage
Table 4-9: N-PVR/N-DVR Usage
Table 4.10: N-PVR/D-PVR-Reasons for Ratings
Section 4-f: AOD (Advertising on Demand) Usage
Table 4-11: Advertising on Demand (AOD)
Table 4-11: 4E. Advertising on Demand (AOD) (Continued)
Table 4.12: Advertising on Demand (AOD)--Reasons for Ratings
Section 4-g: Games on Demand Usage
Table 4-13: Games on Demand
Table 4-14: Games on Demand --Reasons for Ratings
Section 4-h: Gambling on Demand Usage
Table 4-15: Gambling on Demand
Table 4-14: Gambling on Demand --Reasons for Ratings
Section 4-i: Electronic Commerce Usage
Table 4-16: E-Com on the TV Set
Table 4-17: Electronic Commerce --Reasons for Ratings
Section 4-j: Camera Angles Usage
Table 4-18: Camera Angles Usage & Ratings
Table 4-19: Camera Angles --Reasons for Ratings
Section 4-k: Internet Services on TV
Table 4-20: Internet Services on TV
Table 4-21: Internet Service on TV --Reasons for Ratings
SECTION 5: CONCLUSION, OPPORTUNITY & RISK
Analysis—Opportunity and Risk
Table 5-1: Opportunity Risk Analysis—ITV Services
VOD/MOD
1.1.4 Opportunity [5]
1.1.5 Risk [2]
1.1.6 Benefit to consumers
1.1.7 Role of IP
SVOD
1.1.8 Opportunity [5]
1.1.9 Risk [2]
1.1.10 Benefit to consumers
1.1.11 Role of IP
FOD/ N-PVR
1.1.12 Opportunity [3.5]
1.1.13 Risk [2]
1.1.14 Benefit to consumers
1.1.15 Role of IP
Table 5-2: Opportunity Risk Analysis—ITV Services (Continued)
Advertising on Demand
1.1.16 Opportunity [4.5]
1.1.17 Risk [1.5]
1.1.18 Benefit to consumers
Games on Demand
1.1.19 Opportunity [1.5]
1.1.20 Risk [4]
1.1.21 Benefit to consumers
1.1.22 Role of IP
Gambling
1.1.23 Opportunity [1]
1.1.24 Risk [4]
1.1.25 Benefit to consumers
1.1.26 Role of IP
Table 5-3: Opportunity Risk Analysis—ITV Services (Continued)
E-commerce
1.1.27 Opportunity [3.5]
1.1.28 Risk [1.5]
1.1.29 Benefit to consumers
1.1.30 Role of IP
DVR
1.1.31 Opportunity [4]
1.1.32 Risk [1[
1.1.33 Benefit to consumers
1.1.34 Role of IP
Conclusion
Figure 5-1: Common Elements of Integrated IP On-Demand System Skip to top