An HD Overlay – that is how I would describe the SES Americom and Entone joint marketing effort of a high definition solution that promises to solve the problem of how an operator with an existing MPEG-2 system can upgrade to high definition, MPEG-4. This approach, which requires minimal headend equipment, promises capital expenditure savings of close to a million dollars for around 32 channels (assuming HD encoding prices of $40k). By using satellite transport, the cost of the headend portion is minimized to approximately $240k for 32 high definition channels encoded at around 8 Mb/s.
Entone’s CEO Steve McKay characterizes High Definition as, “Table stakes in today’s environment.” He suggests that the advantage to this approach for the operator is that it, “keeps costs variable.”
Besides cost, time-to-market is a benefit to this approach, as Entone and SES report, an operator can have High Definition operational in three to four weeks. SES Americom suggests another advantage is that they make the investment in new encoding technologies saving both future capital costs as well as the engineering effort required to evaluate new and improved encoders.
Both parties seem to win with this particular agreement. With Entone and its 35 North American customers, SES Americom has a new sales channel for a derivative of its IP Prime product. It also provides SES Americom the opportunity to upsell these new High Definition customers to the rest of their services. By giving their customers a cost-competitive High Definition solution, Entone is enabling their customers to offer high definition and opening up the market for their highly capable Hydra set-top box.
Some Interesting Asides:
The Hydra and Amulet set-top boxes from Entone both have built-in, ATSC HDTV tuners. With this configuration, an operator could conceivably drop local off-air channels on their IPTV or cable system and allow the consumer to receive them directly from the antenna, forgoing retransmission fees (Cable Labs is looking at this capability for cable boxes).
The Hydra can be used as a “whole home DVR”, such that one DVR can serve up multiple streams to multiple televisions. Verizon is having success with this, as reported by Parks Associates, which suggested that 12% of Verizon customers are paying $19.95 per month for this capability. McKay and I discussed the challenges of convincing people they need this capability.
He suggested people realize they need a whole home DVR when they reach their threshold of pain which he suggests is, “about a three time domestic dispute.” That is, when there are about three arguments over what will be watched from the DVR, the person in the household with the purse strings declares that the extra $20/month is worth the domestic peace gained by getting a whole home DVR.
