Paving the Way for HDTV Via VOD

It was inevitable. Just as video-on-demand starts to shine as a deployed star on cable's Christmas tree, along comes HDTV. The upstart service — pushed along by pressure from the federal government — took center stage at June's National Show in Chicago. It was only a matter of time before VOD and HDTV converged.

For the past six months, vendors have spoken glowingly about how easy it would be for MSOs to place HD content on VOD servers. Server vendors welcomed the discussion, with all saying they could handle the extra storage and streaming demands.

The chief hurdle facing engineers in placing HDTV content on VOD systems is addressing the increased file-storage sizes and the extra bandwidth needed for transmission. Although both face a few issues, the hurdles are not insurmountable.

Storage is pretty straightforward. An HDTV movie will take up four to five times the space of a standard-definition movie on a VOD server. Balancing server space against usage is, by now, a familiar practice for MSOs.

In fact, some early deployers of VOD have cut back a bit on the number of hours devoted to library titles, for instance, in an effort to make the most of their server space. MSOs can either add more storage to handle HDTV content, or cut back some on existing standard-definition product to make room for HD.

The transmission side of the equation is basically the same—squeezing higher-bandwidth content into the same amount of space. In that conundrum, something has to give. An MSO that can put 10 VOD streams down one 6-Megahertz quadrature amplitude modulation (QAM) unit can only fit two HDTV VOD streams.

The trade-off becomes trickier, because MSOs don't necessarily want to load their systems up with more QAM modulators than are necessary. The pace of HDTV introduction on VOD systems will likely be slow enough to allow MSOs to expand, as necessary, based on demand.

The other parts of the equation — HDTV signal transmission to the headend and display on high-definition set-tops — will require some work and, perhaps, some trade-offs, but neither presents a huge stumbling block. TVN and In Demand have to reallocate bandwidth for HDTV content transmission, but the HDTV set-tops now in the field that display linear programming should be able to handle high-definition VOD.

So while the technology presents few hurdles, the business case is another matter.

MSOs aren't giving Wall Street much solid information on incremental revenue for VOD and HDTV. Sure, there are business models floating around on $10 to $15 in incremental revenue each month for VOD. And the $5 to $10 HDTV tier seems evitable, even though few operators have actually launched such services.

The devil's advocate might look at this scenario and say cable is combining two half-baked business models — VOD and HDTV — in the hopes of creating a Thanksgiving feast. There is some danger in taking the next step without a legitimate business strategy in place.

How can anyone guess whether 40 or 80 hours are the right amount of HDTV content that should be placed on servers? What about the QAM issue? How much bandwidth should be dedicated to HDTV VOD usage, when sales of high-def sets are small?

What content should be implemented first? Hit movies are the obvious example. What if half the studios provide HDTV feeds, but the other half do not? Should MSOs launch such fare anyway?

How about SVOD? MSOs and premium suppliers have a good idea what content is most popular. Should HDTV versions of only the most popular content take up extra space— say 20% — or should most of the HBO, Showtime and Starz content on SVOD be available in HD?

How much will the prospect of HD VOD help sell both services, making consumers more inclined to get an HDTV set or to subscribe to an MSO's HDTV tier?

These are all questions that bear some thoughtful examination before MSOs plunge ahead with HD VOD.

There is no doubt, in theory, that high-definition VOD can be a powerful weapon for cable and serve as a double club against DBS. But just because technology allows you to deploy something, doesn't mean that's necessarily a good idea.

Perhaps HD VOD needs to wait until the business picture clears up, before MSOs make the plunge.