video on demand

Verizon DirecTV acquisition could ease FiOS video load

Some financial industry speculation is buzzing about the possibility that Verizon might buy DirectTV. While Verizon is clearly committed to FiOS, it’s not clear just how far FiOS could extend toward thin geographic areas or areas where household income is low.

Given that, a satellite offering would give Verizon a way to offer broadcast TV without consuming broadband capacity, which could be critical given cable’s plans to push DOCSIS 3.0 to the 50-to-100 Mbps level. video on demand (VoD) could still be delivered over DSL.

A deal would also tweak AT&T’s nose since that provider relies on DirecTV and is also rumored to be looking at the company.

New cable ad platform — EFIB — set for launch

The cable industry’s advertising consortium, Canoe, is launching its ad exchange and interactivity platform (Enhanced Binary Interchange Format, which it calls EBIF — catchy, huh?) This format will allow TV advertising to be as precise in terms of demographic targeting as in online advertising, and also support viewer interactivity to get more product information or even request contact.

In short, EBIF largely eradicates the difference between what you can get with online ads and what you get with TV ads. This shifts the whole TV/online battle (particularly in video) to the question of who and when you get them. Online video will need to sell itself based on its ability to attract users who aren’t as accessible on TV. On demand is a part of that, but only as long as the cable companies and networks don’t turn more to video on demand (VoD) for the mission. It will take about a year for this to gel, in our view, so there’s some time for the online markets to think up a counterpoint.

Qwest to go for delivery conduit, not content broker

Qwest suggested during its second-quarter earnings call that the company would be pursuing a video strategy that would make it less a content broker and more a delivery conduit. Just what the technology might be like is still up in the air.

We’re hearing that there are two approaches being considered. One would rely on a partnership with a satellite player (Qwest has a DirecTV deal now) for broadcast channels and use the Qwest network for video on demand (VoD). The other would be a pure play on OTT-like video based on Qwest CDN assets and local priority content distribution to the access network. We don’t think these two options are very far apart, and thus we believe something CDN-ish is going to happen at Qwest.

Cable companies look at RF over Glass for video delivery

In yet another sign of stress for the IPTV camp, cable companies are looking hard at their own RFoG or linear RF over glass approach, as more telco experience is showing that to be the best way to deliver broadcast channels and (some say) even some video on demand.

A cable shift to fiber to the home has been a possibility for years as the potential of FiOS becomes clear, but the timing of the shift depends on more effective RFoG architectures, which are now emerging.

Our models suggest that there is a narrow range at present where any FTTH approach is too expensive to support and DSL-IPTV is still cost effective.  Below a certain economic density, DSL-IPTV can’t produce decent ROI. RFoG could lower the minimum density for FTTH and so threaten IPTV-DSL as a strategy for telcos, which are likely to adopt some of the principles of RFoG themselves for areas othin in demand to be served by PON. So far, cable appears to be looking at the technology for greenfield builds.

AT&T’s U-verse: The beginning of the end?

AT&T’s new deal with DirecTV may be the beginning of a shift away from U-verse toward the “Homezone” satellite-and-IP/VoD hybrid model, according to rumors we’ve heard.

The problems with U-verse are that the service has an extremely high pass cost—on the order of 4 to 6 times that of cable—and that the limits of DSL in delivery of both content and Internet make U-verse very vulnerable to DOCSIS 3.0 competition. The IPTV model has become more complex and costly over time, and faces its greatest challenges in conjunction with interactivity and HD programming.

We’re also hearing that more EU operators are looking at the linear RF broadcast model of FiOS. Cable has a parallel channel for TV, and competing with cable without that capability is likely to be increasingly difficult no matter where you are in the world. Some cable operators, like Time-Warner, are also now looking at the linear RF FTTH model for green fields, which would be a blow to IPTV supporters.