Cable TV isn't as simple as it used to be. In addition to plain old analog TV, cutting-edge operators now offer digital TV, video-on-demand and HDTV. The new services put new demands on satellite carriers, but so far they seem up to the task.
"The existing satellite distribution system for broadcasting content works very well for distributing on-demand video content," says John Hildebrand, vice president of multimedia technology at Cox Communications, Atlanta.
Bob Zitter, senior vice president for technology operations, HBO Time Warner Entertainment, agrees. HBO continually investigates terrestrial alternatives for distribution of its rapidly multiplying array of offerings, he says, but satellite still remains the most cost-effective approach.
The carriers are working hard to accommodate the new offerings as they see their traditional cable business—distribution of conventional cable channels—decline. "New channel launches are still happening, but just not at the pace we saw in the late 1990s," says Carl Capista, SES Americom's vice president of satellite services in North America.
"This has been a challenging year for our industry," says Joan Byrnes, chief operating officer of Loral Skynet. "Supply continues to exceed demand in most regions."
The oversupply is not stopping Loral Skynet from introducing two new multichannel-per-carrier (MCPC) platforms, along with the one that is now offered on Telstar 7.
Loral Skynet is planning to launch Telstar 13 to 121 degrees next month. It is intended to carry a 24 C-Band transponder in addition to Ku-Band and Ka-Band payloads.
Of course, the key to real estate, even in the heavens, is location, location, location. One upside for satellite operators is that valuable cable neighborhoods appear to be getting more valuable.
At SES Americom, the focus is still on creating and maintaining two attractive, high-value cable neighborhoods. At Cable One, Satcom C3 and C4 at 131 degrees west longitude and 135 degrees will be replaced by AMC-10 and AMC-11 in 2004. Cable2 includes AMC-1 at 103 degrees and AMC-4 at 101 degrees. (All orbits are in west longitude.)
The story is the same at PamAmSat. "Our replacement for G5 known as G5R is sold out already, and it is not scheduled to go up until 2005," says Jim Frownfelter, executive vice president and CTO of PanAmSat. "And the replacement for G1R scheduled to go up a year later is almost sold out."
Scott Davis, president of Ascent Media Network Services, a unit of Ascent Media, says programmers are placing more emphasis on how to strategically package and bundle their offerings on satellites.
"This can be very tricky," says Davis. "You need to build your programming coalitions very carefully."
And like any hot location, there are those who want to keep out anyone who might hurt the value of the neighborhood. "We see a number of cable programmers that do not want to have third-party programmers on their package," says SES's Capista. "They want to sell the whole package to the MSOs."
Direct to cable
Geoff Hillier, Harmonic's director of product marketing for digital video, says that many cable operators are now inclined to take their programming components directly, not from a third party in package form.
"At the regional-headend level, operators can take down the signals and assemble their QAMs [cable transmissions] in 27- or 38-Mbps chunks, and then use conditional access to create their own tiers," he says.
According to Hillier, the desire to provide additional services is causing MSOs to look again at re-encoding incoming signals. Using high-efficiency encoders to significantly reduce the video bit rate, he says, operators can increase the number of channels on their systems.
Operators are also taking advantage of new, inexpensive digital ad-insertion techniques to boost advertising revenue.
"This combination, allowing more services and more revenue may prove compelling," Hillier says. "And if it happens, it would likely be centralized. Distribution to the regional headends would then be carried over fiber or satellite."
Vendors like KenCast and N2 Broadband have rolled out VOD solutions that mesh well with satellite. A value-added turnkey approach to VOD is now jointly offered by PanAmSat and Seachange International. It represents just one aspect of PanAmSat's conversion from a provider of space segment to a provider of full service, value-added solutions.
HBO On Demand, for example, is distributed via satellite at two times real time after the MPEG-2 video is wrapped in IP with an Internet-based return path.
"Satellite clearly has a place in the MSO's architecture, which consists of a multiple-link transport chain," says Davis. "In terms of VOD content distribution in particular, this is a significant application for satellite."
MSOs and content providers alike are comfortable with the basic linear-network approach, and they can add more caching storage in the network as the volume of HD content increases.
"Satellite is not holding HDTV back. HDTV is not a technology that requires you to do anything differently on the satellite," says Frownfelter. "Any shift of HDTV content into the VOD arena means the bandwidth has the potential to max out quickly."
Content, whether VOD or SVOD, is stored briefly at the headend and then propagated out to the Cox Communications subscribers.
"We are developing a two-level architecture using staging servers as part of the pitcher-catcher topology we have adopted with our partner, In Demand," says Cox's Hildebrand. "We keep 800 hours of popular content available on the edge of the network, while less popular content is held by the centralized or staging server."
Michael Pasquinilli, Cox's director of ITV technology, says Cox is somewhat agnostic about how premium content, or any content for that matter, gets to its headends.
"We have a high-bandwidth national backbone in place," adds Hildebrand, "and we are looking at numerous new and innovative ways to effectively use this high-speed data system."
Satellite could also be used for delivering ad content, according to Guy McCormick, vice president, technical operations for Cox's advertising sales division.
"We're in early discussions with the vendors on this opportunity," explains McCormick. "As ad-supported VOD content increases and becomes more ubiquitous among sites and operators, it would be a more attractive delivery scheme."