How long will the transcoding window last for cable television gateways?
This year’s SCTE Cable-Tec expo wasn’t exactly full of surprises. Instead it was one of those years when real work happens because real products are coming out. While those products are disruptive, their arrival is not unexpected but is instead welcome.
This year’s SCTE Cable-Tec expo wasn’t exactly full of surprises. Instead it was one of those years when real work happens because real products are coming out. While those products (e.g. television gateways, HTML-5 User Interfaces) are disruptive, their arrival is not unexpected but is instead welcome.
Essentially all of the newer TV gateways include a transcoder designed to serve content to a tablet or PC in the home. However, it is also equally clear that the more economical solution would be to transcode the content once (into 3 or 4 different bitrates) and store it in a content delivery network (CDN) using HTTP Live Streaming or a similar streaming protocol. What is preventing cable companies from implementing a CDN-based (cloud-based) multiscreen solution is simply that content creators (a.k.a. Hollywood) have the right to charge separately for that form of distribution beyond broadcast. On the other hand, if a home records broadcast content, it is within “Fair Use” to distribute that content around the home without them or their television provider sending any additional money to content creators.
As a result, the hardware solution of transcoding simply provides a price floor against which content providers can negotiate reasonably-priced multiscreen VoD contracts.
The question is how long it will take content creators to:
- See that the operators have a fixed price solution against which VoD content must be priced
- Renegotiate enough of the contracts so that transcoding is no longer needed
My initial estimate for the transcoding window is 7 years (2012-2019), largely because many of the content contracts can be as long as 5 years in length. However, the truth is that nobody knows how long the transcoding window will last for TV gateways.
One final note – TV gateways are generally limiting themselves to transcoding only one stream at a time, due to legal concerns. This means that there will also likely be a sustained market for small, dedicated multiscreen TV gateways that each transcode a single stream and do nothing more (or for transcoders in thin client STBs.)
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