xOD Capsule Newsletter – January 10, 2006

Here comes Google TV
Although the massive range of cool gadgets and gizmos were the star of the Consumer Electronics Show in Vegas, it was clear by the end of the week that content remains king following a big announcement from Google Inc.

Google, which has been whetting people's appetite for Web-based with a beta of its video service, unveiled plans for a much bigger offering: a "video store" that will feature primetime hits (i.e., Survivor, The Amazing Race) as well as older fare (i.e., I Love Lucy, Star Trek: Deep Space Nine) from CBS.

The agreement with a top broadcaster gives Google's video some credibility at the get-go. Google also came away with a deal with another big name — National Basketball Association, which will serve up full games, including playoffs, for a fee, as well as some archival hoops footage. Google will also sell titles from networks such as Here! TV, HDNet, and Trinity Broadcasting Network, and top everything off with its search technology.

CBS President & CEO Leslie Moonves said it will use Google to give the network "significant new exposure to millions of users who are likely to access this Web service and who may not be traditional TV viewers." Though the viewing paradigm is far from making a complete shift, it's probably a good idea to get the ball rolling, which is what CBS is doing here.

—Jeff Baumgartner, Editor, CED magazine and xOD Capsule

Cable outlines big OCAP plans
LAS VEGAS— Cable brought out the big guns last week here at the Consumer Electronics Show to demonstrate its present and long-term support for the OpenCable Application Platform (OCAP), a CableLabs -specified middleware stack that aims to give operators a national footprint for interactive services and applications as well as an entrée into the retail market for digital set-tops and televisions.

Although the cable industry recently volunteered to begin OCAP launches in 2006, and to complete OCAP headend installations nationwide by July 1, 2009, executives from the nation's largest MSOs outlined some concrete examples of their respective plans:

• Time Warner Cable Chairman & CEO Glenn Britt said the operator would install OCAP headends in systems serving a combined 2.5 million cable customers starting this year in New York City; Milwaukee and Green Bay, Wis.; Lincoln, Neb.; and Waco, Texas. At the conference, the operator also demonstrated an OCAP-compliant TV made by Samsung that supported Time Warner's OCAP Digital Navigator interactive program guide, video-on-demand and third-party applications, including a weather and news program from BIAP Systems.

The examples of support demonstrate "some concrete steps to show that this (OCAP) is real," Britt said.

Time Warner's commitment follows an OCAP-related memorandum of understanding (MOU) with Samsung announced at last year's show. The MOU, which also involved Advance/Newhouse Communications, called for the MSOs and Samsung to write specs for OCAP-compliant TVs and how they operate on a cable network. Since then, Time Warner has begun to test OCAP-based TVs from Samsung in Gastonia, N.C.

• Advance/Newhouse, meanwhile, will spend 2006 preparing for an eventual deployment of OCAP. Company Chairman & CEO Robert Miron noted Thursday that the operator will begin such work in Indianapolis, and treat it as "learning experience" as the company preps other divisions for OCAP.

• Comcast Corp. will also push the OCAP needle in 2006, starting in Philadelphia, Denver, Union (N.J.) and Boston, said company Chairman & CEO Brian Roberts. He added that Comcast is working with Panasonic on an OCAP-based application that will relieve some of the "frustration" consumers experience with their home theaters, namely the sizable number of remotes required to control multiple devices. Using OCAP, Comcast will be able to "provision" the speakers and other devices hooked into the home theater environment, and enable the consumer to control them all via one remote. Comcast revealed other OCAP-related plans earlier in the week, signing Panasonic to a deal to initially provide 250,000 HD-DVR set-tops with dual MPEG-2 and H.264 compression techniques outfitted with Panasonic's implementation of the CableLabs-specified middleware.

• Charter Communications President & CEO Neil Smit said the MSO will begin OCAP deployments in "select" markets in 2006. At last year's show, Charter also announced an MOU with Samsung, with expectations that it would deploy low-cost network interface units and Samsung bidirectional HD sets that incorporate XHT (eXpandable Home Theater), a home networking technology that supports the IEEE1394 "Firewire" cable.

• Cablevision Systems Corp. COO Tom Rutledge said the operator is also moving ahead with OCAP plans of its own in New York. There, Cablevision has started the process of porting its IPG and associated apps to OCAP, thus enabling the operator to retain the "signature" elements of its digital cable service, he said.

• Cox Communications, meanwhile, is "fully committed to deploying OCAP," said company President Patrick Esser. This year, he said, Cox plans to deploy a series of two-way, OCAP-compatible news, weather, e-mail, bill viewing/payment, premium service upgrade, TV-based caller ID and gaming applications.

The rollout of OCAP is also tied to the deployment of a new downloadable conditional access system (DCAS), a replacement for the hardware-centric CableCARD that promises to be less expensive and much more elegant.

Mike Hayashi, Time Warner Cable's SVP, advanced engineering & technology, said plans are to start field implementations of DCAS toward the end of 2006, position plant for a larger rollout in 2007, and to extend DCAS nationally by 2008.

Greene: Vongo offers cable 'great opportunities'
If you think the new Vongo offering from Starz Entertainment Group (SEG) is simply an "over-the-top" service designed to redirect revenues traditionally tagged for broadband network operators, think again, according to company SVP, Advanced Services Bob Greene.

Vongo, introduced last week, can offer "great opportunities" for SEG's cable and telco affiliates.

"We're prepared to work with the telco and cable industries. We believe they should be offering content and access as a bundle and not leave money on the table," Greene said, noting that operators could partner up to handle the customer billing and authorization for the Vongo service. "At the same time, we're not going to wait, and we're going to be aggressive in our marketing," he added.

Further, SEG said recent research indicates that an Internet service will not cannibalize its existing partnerships with cable, satellite and telco service providers. According to the study, 70 percent of subs of the Starz Ticket on Real Movies service (offered in partnership with Real Networks) subs were not traditional Starz customers, and about half were non-premium television subscribers.

Expanding beyond Starz Ticket, Vongo will allow users to download films and other videos for playback on Microsoft – powered PCs, laptops and "select" portable media devices. For $9.99 per month, a subscription will authorize the service for up to three devices. Vongo also supplies a live streaming feed of the linear Starz premium channel.

Starz Ticket, which also supports a stream of the Starz channel, sells for $12.95 per month and offers fewer titles – about 300 movies.

Asked whether the Starz Ticket service will continue, Greene responded, "For now." He added that SEG is in discussions with Real about the Vongo service.

"While we don't have anything to announce today, we are committed to supporting (the) Starz Ticket on Real Movies service and are also exploring additional initiatives, like Vongo with Starz," a RealNetworks spokesperson said. Starz and Real launched the service in April 2004.

Starz certainly has bigger plans for Vongo. In addition to the subscription model, the service will also offer newer pay-per-view titles for $3.99 per movie, eventually putting it in direct competition with services such as CinemaNow and Movielink. Initially, Vongo will offer PPV titles from Disney, though SEG plans to add other studios to that mix, Greene said.

ADB buys OCAP specialist Vidiom
Among the flurry of deals that were announced before the close of 2005, here was a big one that had a significant impact on interactive television: ADB Group all but cemented a top position in the OpenCable Application Platform (OCAP) arena after signing a deal to acquire Broomfield, Colo.-based Vidiom Systems Corp.

ADB Group is not new to the sector. Its Osmosys division develops OCAP implementations and applications, and is also heavily involved in DVB-MHP, the spec upon which OCAP is largely based. Although several TV manufacturers are creating their own OCAP stacks, Vidiom and Osmosys are among the few to create licensable versions.

Vidiom, however, is directly linked to OCAP Development LLC, a joint venture of Comcast Cable and
Time Warner Cable.

In May, Vidiom formally announced a licensing deal with the J.V., gaining the right to license its OCAP implementation to other operators, silicon vendors and consumer electronics companies.

Geneva, Switzerland-based ADB called the deal a "strategic acquisition," noting that Vidiom would strengthen its presence in the U.S. market and build opportunities for other ADB products. ADB also markets a wide range of digital set-top boxes.

It's expected that ADB will retain the Vidiom brand and its existing operations. It's also expected that Vidiom will continue to be headed up by President & CEO Timothy Wahlers.

"We believe that Vidiom's vast experience and excellent reputation in the OCAP-based products and markets create perfect synergy with our existing MHP-related business," said ADB Group Chairman & CEO Andrew Rybicki, in a statement.

Financial terms of the deal were not disclosed. The companies expect the deal to close in early 2006.

At that point, it's expected that ADB will retain Vidiom's 100-plus employees. ADB has about 500 employees.

Vidiom was formed in 1997.

Time Warner expands 'Start Over'
Following an initial launch late last year, Time Warner Cable has expanded the availability of "Start Over," a service that allows digital customers to restart shows that have the appropriate copyright clearance from the network. So far, about 60 networks are supporting the MSO's new service.

The operator said it has completed its rollout in Columbia, S.C., making Start Over available to about 50,000 digital customers. Time Warner offered it to about 10,000 subs in Irmo, S.C., in the early going.

According to the MSO, 70 percent of the customers who had access to Start Over used it the first month it was available, and they initiated an average of 10 Start Over streams in that period.

Charter, Navic 'address' new ad model
Charter Communications has teamed with Navic Networks to introduce addressable advertising in Riverside, Calif.

Using a concept called "telescoping," Navic's platform allows users to obtain more information — such as a longer-form commercial or instructional video — about the products or services being advertised. In addition to telescoping and linking capabilities, Navic's "HyperGate" system can also distribute opinion polls tailored to commercials or specific shows. OpenTV is among Navic's competitors in this sector.

Charter and Navic said "dozens" of advertisers, including automobile dealers, furniture retailers and financial institutions, have signed on to tap the new system.

"Navic's Addressable Advertising provides our advertising sales staff with a unique value proposition when facing their key accounts," said Todd Stewart, corporate vice president, national advertising sales and development for Charter Media, the MSO's ad sales arm. "Not only can we talk about the power of cable to reach specific groups of viewers, we can now discuss the capability to further segment those groups and target them with interactive messages."

Charter is also using Navic's platform to support marketing of its cable modem service. Using the results of a poll, Charter is targeting its addressable marketing campaign at customers who use DSL or dial-up Internet services, or do not have Internet access at all.

Charter is presenting them with offers tailored to their particular situations.

According to a Navic spokesperson, the company presently is supporting 27 million set-tops operated by Time Warner Cable, Charter, Cox Communications, Adelphia Communications, Bright House Networks, and EchoStar Communications.

Softel certifies Motorola, S-A
Interactive television platform developer Softel-USA made significant technical progress in the U.S. cable sector recently after certifying its "MediaSphere" carousels for Motorola Inc. – and Scientific-Atlanta -made headends.

Softel-USA said its carousels have been outfitted to support the Motorola DAC-6000 (Digital Addressable Controller) and the S-A DNCS (Digital Network Control Server), which are used by most U.S. cable operators.

The interops were based on the recently opened SGIF (Stream Generator Interface) specification, and included support for in-band and out-of-band (also known as "unbound") applications.

"We wanted to be able to have a system that is used by the majority of the cable systems in the country," said company President & CEO Sam Pemberton. He expects some additional trials and some limited field work with U.S. cable operators in 2006, followed by the start of full scale deployments in 2007.

Softel also makes software for the closed captioning market and the V-Chip arena. The company also does work involving the Broadcast Flag, a technique that continues to "ping-pong" between the broadcasters and the courts, and is not fully deployed and not yet mandated, Pemberton noted.

We are making changes and additions (including international deployments) to our
Web-based "living" deployment chart. If you have a new deployment to report for the VOD Scorecard and the Web-based deployment chart, please contact CED Editor Jeff Baumgartner.

Recent Deployments