Skip to main content

Were Cable MSOs Prepared for the OTT Disruption?

Why are the legacy U.S. cable service providers only now starting to address industry analyst concerns that they seem unprepared for the emerging alternative low-cost over-the-top (OTT) video offerings? Could this unfortunate scenario have been avoided, and did they have the means to counter this offensive?

Traditionally, the cable TV industry has relied upon MPEG-based technology to transport digital video signals. But there has also been a longstanding awareness of Internet Protocol (IP) video solutions, according to the latest market study by In-Stat.

There's three reasons that MSOs should have acted sooner: In comparison to MPEG, IP is considered to be less-expensive and more efficient. An integrated DOCSIS cable modem is a capable, and yet often underutilized, part of the digital cable set-top box. The availability and applications of IP video has expanded exponentially -- this ongoing transformation was apparent for several years. There's no mystery here.

"When it comes to IP transport, the cable modem is the perfect conduit of IPTV to the cable TV household," says Mike Paxton, Principal Analyst.

"In fact, cable modems are already performing this task in millions of households, just not through the digital set-top box to the TV set. Instead, this IP video is commonly being displayed on the PC."

Of course, IP video is also on more TV screens as a result of the agile upstart vendors, such as Roku, having the foresight to got direct-to-consumer -- by-passing the sedate legacy pay-TV service distributors.

In-Stat's latest market study reveals the following:

- The percentage of cable set-top boxes (STB) with integrated modems will double from 2009 to 2014.

- Worldwide legacy digital cable STB unit shipments are forecast to decline by 8 percent in 2010.

- Regional markets poised for growth include Europe, where the demand for high-definition (HD) cable STBs is fueling some growth.

- Revenue from digital cable STBs in Latin America will approach $200 million by 2014.

- The value of semiconductor components used in cable STB products was $2.8 billion in 2009, only fractionally higher than in 2008.

Popular posts from this blog

The Billions Bet on Tentative AI Demand

Gartner's latest worldwide IT spending forecast exposes a trend every CIO has already felt in budget negotiations. Total spending will climb 14.2 percent in 2026, reaching $6.37 trillion. It seems that the IT infrastructure market is simply having a strong year. However, the more useful insight is how unevenly that growth is distributed. The Headline Number vs. The Real Story Data center systems and infrastructure as a service (IaaS) are absorbing capital at a pace several multiples faster than devices, communications services, and traditional IT services. This is not incremental growth spread across a healthy portfolio. It is a wholesale reallocation of enterprise technology budgets toward AI infrastructure, made on the expectation that demand for AI workloads will justify the outlay before that demand has been fully proven. Where the Money is Going Data center systems are forecast to grow 62.5 percent in 2026, that's up from 51.6 percent growth in 2025, reaching $822 billion....