Cable Operators

With Digital Simulcasts Hot, A Look at the How and Why

11/21/2004 7:00 PM Eastern

By now, the readers of this magazine should be well familiarized with Charter Communications Inc.’s work to offer all video channels in Long Beach, Calif., on a digital basis. Externally, they call it “all-digital” for obvious competitive and marketing reasons.

Internally, they call it “digital simulcast.” That’s not as dorky a term as it may seem. Remember that most technologies, however clunky they sound, tend to get named for what they do. To “digital simulcast” is to simultaneously broadcast all analog video channels in analog, and in digital.

Here’s your free tip for the Thanksgiving week: Digital simulcast isn’t just a Charter thing any more. In fact, it’s looking like it will rank tall on most cable providers’ 2005 technology to-do list. Charter will do more; Comcast Corp., Time Warner Cable, Cox Communications Inc., Adelphia Communications Corp. and others are gearing up.

WHY DO IT?

When the Charter Long Beach story first broke, the phone rang. It was Steve Effros, the seasoned industry observer and former head of the Cable Telecommunications Association (CATA). He was seeking an on-the-fly translation.

I did my best. He sounded less than overwhelmed.

The trouble with the early chapter of digital simulcast was this: The stated benefits didn’t seem like enough, competitively. The next step in the plan — recapturing the spectrum held by those analog channels — seemed hard, and far away.

To loosely paraphrase Steve’s reaction: “You mean it’s a re-broadcast of everything in digital, without taking back any of the analog? That’s it?” (If you know Steve, you can probably almost hear the curmudgeonly indignance.)

Since then, and coinciding with the increased interest by other MSOs, the digital simulcast story grew some zigs and zags — as technology stories often do.

THREE REASONS

Blowing about in the holiday winds are three new reasons why digital simulcast is showing up on 2005 work plans.

One: By making everything in analog available digitally, cable providers can more flexibly “mix and match” basic channels for sale to customers — like the top 50, 60 or 70 channels, in a pack. The first example usually given, around this logic, is Dish Network’s 60 channels for $29.99.

Of course, one could drop basic-cable prices right now without having to do any digital simulcasting. So there must be something more.

Two: In most cases (read: depends on the box), all new basic customers can immediately access whatever interactive features are available — that means VOD and its on-demand variants, the guide or anything else that uses a back-channel for fetching stuff. (A channel the dish guys don’t have.)

Over time, this relieves the pinching fact that half of today’s cable customers don’t subscribe to services that require a box. Those people are plenty happy without a set-top. Plug the wire into the back of the TV set, more channels appear — and they can still use the remote that came with the TV. Good enough.

Yet, no box means no temptation to try any of the growing stores of VOD fare, including the free stuff. Quite simply, it’s hard to get people to sample new stuff when you can’t get the new stuff to people to sample. (We’re handily putting aside the question of whether consumers will go for a box jam-down, with or without the interactive temptations.)

Three: Once all channels are available in a digital format, the needle on the “interesting possibilities” meter starts to skate progressively upward. If everything is digital, why not throw a switch into the mix? The mind reels.

And, obviously, digital simulcast moves cable closer to that happy place called “all digital.” Digital simulcast provides all channels in digital. For the time being, however, digital simulcast doesn’t mean digital only. Picking off those analog channels, for whatever reason, tends to make consumers go nutty.

BANDWIDTH COST

Which brings us to bandwidth. In the short term, digital simulcasting costs bandwidth. In Charter’s case, it cost them seven 6 Megahertz channels to digitize their 96-channel analog/basic offering.

At the least, adding a switch likely returns the channels used to do digital simulcast. Probably not much more — but it’s early, it depends on how you do the math and it’s beyond the scope of this column (thank the heavens).

And there’s another wrinkle: The FCC’s desire for cable providers to stop installing digital boxes that contain built-in security, by July of 2006. If that desire doesn’t change — the general hope is for it to go away entirely — it means somewhat of a mad dash to get ready to switch over to set-tops that contain a CableCARD slot, just like digital TVs and HDTVs.

Doing digital simulcast means each new basic customer gets a digital box. Or boxes. That’s what’s been driving the push toward “the $50 box,” because most homes have three or more TVs.

POSSIBLE COST CAVEAT

Removing the analog tuner and related components in the box helps to trim costs. Comcast is saying $50, all-in; vendors are saying $75 to $100. The truth usually lurks in the middle.

Less cost is good. But in order to move forward with digital simulcast plans, operators need to know whether they’re buying boxes with built-in security, like they’ve always done, or boxes with CableCARD slots, like they’ve never done. If it’s the latter, box costs start to dart back up.

That’s a quick update of the new zigs and zags in the emerging story that is digital simulcast.

Happy Thanksgiving.

Stumped by gibberish? Visit Leslie Ellis at www.translation-please.com.

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