Everything On Demand
By Steve Rose (copyright 2002, all rights reserved)
Wednesday, November 06, 2002
The Implications of Everything On Demand
Cable systems evolved from broadcast television, and inherited the standard broadcast model: Send everything at once, on different channels (freqencies), then make the selection of which channel to watch at the TV set. Cable also started out as a single branching pipe to which all subscribers in an area were connected (tree trunk and branch style, with the subscribers being leaves -- hopefully evergreen). This made it almost impossible to get a signal back from a subscriber to the "headend", or signal source. The headend is where all of the cable signals are aggregated and fed into the "trunk". Every half a mile or so on the trunk and distribution branches, an amplifier had to be installed to boost the signal to overcome the losses of the coaxial cable.
A signal travelling upstream not only had to overcome the attenuation of the system, but also had to overcome the sum of all of the noise on the system. The extreme difficulties involved made cable systems essentially unidirectional.
In the 80's, optical fiber transmission started becoming a reality. Dave Pangrac, VP of Engineering of Time Warner Cable (under Jim Chiddix as CTO) was challenged to apply fiber to cable system rebuilds. He and Don Gall came up with an idea that was implemented by their crew in Denver, and became known as Hybrid Fiber Coax (for which they won an Emmy).
The HFC architecture divided the existing cable plant into neighborhoods (typically of 500 homes), and fed each with its own fiber pair. This eliminated most of the amplifiers, and greatly improved the signal quality delivered to the subscriber. However, it also eliminated most of the noise and loss problems of getting a signal back upstream, and made the cable system bidirectional! Cable systems around the world have deployed HFC over the last decade at a cost of more than 55 billion dollars, and while they like to brag about the number, the primary motivation was that an HFC rebuild costs no more than a conventional cable plant rebuild (necessary periodically), but lasts a lot longer, reduces maintenance, improves quality, and allows the introduction of major new profitable services such as cable modems and cable telephony.
At the same time HFC was being deployed, digital video compression became a possibility, particularly with the MPEG-2 standard. This allowed the transmission of ten times more programs in the same bandwidth, and was the source of the "500 Channel Cable System" phrase popularized by John Malone. But Malone was way off. Remember, each neighborhood of 500 subscribers is fet by its own fiber. There is nothing (aside from the momentum of tradition) that requires the signal profile of one fiber to be the same as another. In reality, cable gained the ability to deliver 500 channels to each group of 500 subscribers, or a channel per subscriber -- a 50,000 subscriber system had the potential to become a 50,000 channel, bidirectional system.
For this to become a reality, though, several additional steps are required. In particular, channel selection has to move from the home to the headend, so that we are only sending signals that are actually being watched. In doing so, we recover all of the bandwidth being wasted sending signals that no one is viewing (and bandwidth is a primary cable operator asset).
Offering "Network PVR"
Further, if the requested signal is originating in a video server at the headend, and being delivered only to one subscriber, we can give that subscriber full VCR-like control over that signal (e.g. pause, fast forward, rewind). This has come to be called "Network Personal Video Recorder", or NetworkPVR. It expands on the functionality offered by TiVo or Replay boxes, at a much lower cost.
It is a real gift to be able to see the next "killer app" in advance of its deployment. We have that gift with NetworkPVR. Ask any owner of TiVo or Replay if they like the device, and you are likely to get an earful. The sophistication of the user doesn't matter. From a teenager to a broadcast engineer, you are likely to hear the phrase "it has changed my life!" (which surprised the heck out of me). And yet both boxes have met with limited success, as they are expensive, require a monthly service charge, have limited storage capacity, work with only one receiver, and have to be told in advance what programs to record (even though they make that process much easier). Using a centralized server to provide equivalent functionality, it is fully integrated with the cable system (e.g. the program guide), has fundamentally unlimited storage capacity, works with every STB in the house, requires no capital outlay (or maintenance costs), and can prerecord everything so that selections can be made after the fact. The cable operator can offer it as a value added service, or use it to retain cable customers who might otherwise switch to satellite or wireless.
Individually Selected (or Targeted) Advertising
Lastly, server switched and delivered content gives the ability to allow the subscriber to choose the commercials to be sent with advertising supported programming. For example, the subscriber might select ads for SUVs while in the market for a new vehicle. This turns commercials into content, guaranteeing their relevance. The advertiser knows that the folks watching the commercial are genuinely interested. And the cable operator is providing much greater advertising value. As a result, everybody wins,and the value is increased for the viewer, the advertiser, and the cable operator!
Applications Yet To Come
The newly available bandwidth will give cable operators the opportunity to create whole new businesses on their systems, such as video home security, interactive gaming, genuine interactive television, and other applications yet to be invented. Servers with appropriate architecture and a very low cost per stream will soon appear that will become the building blocks of these new services. The generic term applied to this combination of capabilities is "Everything On Demand" or EOD, and it is the "Next Big Thing" in cable television. When combined with IP delivery of all forms of content (see Broadband Misconceptions), it becomes a revolution.