Video Breakthroughs

Although Ultra HD was the visible headline story from IBC2013, with demonstrations of the new format everywhere, the serious business, when you scratched beneath the surface, revolved around multiscreen TV yet again. The technologies to get multiscreen deployed and then make it a compelling user experience have dominated the last five shows, with only 3DTV offering any serious challenge for the crown before disappearing off our radar. This year the focus was on personalizing and monetizing multiscreen TV more effectively, while there is also a trend towards end-to-end multiscreen solutions (including multi-vendor pre-integrations) and managed services. A key driver for these last two trends is the need to help smaller operators into the multiscreen market.

With all the excitement around HEVC and all the reports we have put out at Frost & Sullivan on the topic, we get asked all the time if MSOs should skip AVC and directly switch from MPEG-2 to HEVC. Why is this such an enticing notion and does the idea actually bear merit? To answer that question, first, some history is in order.

Back in the nineties as North America transitioned to digital cable, MPEG-2 was the state of the art compression technology at the time. North America was ahead of the game even with HD and thus nearly all cable applications relied on MPEG-2 for SD and HD alike. But the industry paid a price for that early innovation – no sooner were they done with HD deployment than AVC broke onto the scene and fundamentally disrupted the video compression equation. Faced with a weak economical outlook (remember the dot com crash of 2002, anyone?), and having just made major investments in HD rollouts, the cable industry was unable to take advantage, in a meaningful way, the benefits offered by AVC. In contrast, as Europe began to transition somewhat later in the game, they did use MPEG-2 for SD digital cable but predominantly use AVC for HD.

Fast forward to 2013, when the growth of North American cable subscribers slows and IPTV is surging in popularity with its vast array of content and the lure of rich applications enabled by bi-directional connectivity. The writing on the wall is clear to MSOs –they can transition their primary business to broadband services, or they must dramatically reinvent themselves and the user experience they offer to remain relevant as mainstream Pay TV service providers. Wherein lies the rub – how do MSOs meaningfully and strategically invest in infrastructure that will ensure they are at state of the art over the next decade?