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Rebooting The NDVR Concept

8/08/2008 8:00 PM Eastern

After Cablevision Systems’ legal victory, cable-technology vendors are taking their blueprints for network-based digital video recorder systems out of mothballs — albeit cautiously.

Even if the ruling holds up on the expected appeal by programmers, putting such systems into service would present significant technical challenges.

For one thing, cable operators would be likely to initially deploy a network DVR service that closely hews to the way Cablevision described its Remote Storage DVR in court documents, to be on the safe side of the law.

“We’re fully expecting that the first network DVR systems will have every parameter set to be like the RS-DVR,” said SeaChange International chief strategy officer Yvette Kanouff.

Cablevision’s RS-DVR was designed to provide subscribers with their own dedicated hard-disk space in the headend. The MSO argued in court that because of this architecture, the network-based system was no different than conventional set-top DVRs.

However, that also means the RS-DVR would require far more storage than video-on-demand systems or Time Warner Cable’s Start Over service, which store only one physical copy of a video file and then stream it to many subscribers.

Today, operators have as much as 10,000 hours of storage for all VOD subscribers served by a headend, Kanouff estimated.

Using the Cablevision RS-DVR model, she noted, a headend supporting, say, 50,000 network DVR subscribers would need almost 4,000 Terabytes to provide 80 Gigabytes of recording space to each customer — an amount of storage that would take up more than 16 6-foot-high data-center racks.

“If there’s discrete storage required for every customer, that’s going to be quite a lot of disk you need,” SNL Kagan analyst Ian Olgeirson said.

Eventually, programmers and operators will come to terms on the more efficient shared-storage model, said Tim Dodge, vice president of marketing and business development for VOD vendor Concurrent Computer.

“I think what will happen is, people will realize that you don’t have to force everyone to have different copies of the same program,” he said.

Other limitations of the Cablevision RS-DVR, as it is currently defined, include the inability to use DVR functionality while a program is airing and a single trick-mode speed (for rewind and fast forward). The lack of those features could disappoint subscribers accustomed to conventional digital video recorders, Kanouff said.

Moreover, no matter how a network DVR service is designed, a cable system would need to significantly increase the amount of bandwidth available to stream unicast video by at least a factor of two. That would be a challenge for most cable systems, which generally use all the spectrum available on the plant.

Today, VOD systems are built assuming a 10% to 12% concurrent viewing rate. Arris senior director of business development Jeff Brooks said a service like Start Over, which allows subscribers to replay some programs within a defined window, requires twice as much streaming capacity compared with VOD alone — and that a network DVR service would need even more.

When Time Warner Cable first rolled out Start Over, “there was some contention” for resources, Dodge said. “But they figured out how to make it work. The cable industry is very good at resolving these issues.”

Despite the potential pitfalls, cable operators remain keenly interested in the network DVR concept because of the potential cost savings and control.

Non-DVR set-tops cost about $100 less apiece than their disk-enabled cousins. At the beginning of 2008, the average MSO cost for an HD-enabled, non-DVR digital cable set top box was $170, according to research firm In-Stat (owned by Reed Business Information, which publishes Multichannel News). By contrast, the average cost of an HD/DVR digital cable set top box was $265.

All told, Kanouff said, a network DVR costs less than half than set-top DVRs in upfront capital to serve the same number of subscribers. There are ongoing operational savings, too, from not having to replace DVR set-tops with burned-out disk drives.

A network DVR can also be turned on instantly, without a truck roll, for any digital set-top in the home, Brooks said: “Now it doesn’t make a difference where I set up my recording and where I view my recording.”

And while a regular DVR typically is limited to recording two programs simultaneously, a network DVR system could let a subscriber record four programs — or even more — that are airing at the same time.

Meanwhile, cable operators would be able to take “control of the content back from the consumer” with a network DVR, SNL Kagan’s Olgeirson said.

“They’d never couch it like that, but with the network DVR you have the ability to rein in the fast-forward capabilities” so a viewer couldn’t skip the commercials, he said, adding: “The MSOs sell ads as well, and they don’t want to see that business erode.”

September