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Cable Industry Needs to Solve Bandwidth Crisis, Offer New Services to Compete With IPTV, Satellite Says Broadcast International

Posted on: Monday, 11 February 2008, 06:00 CST

Broadcast television and HD video have long been the stronghold of cable companies, but that may well change as IPTV initiatives promise new alternatives to consumers, delivering HD-quality video over newly tooled IP infrastructures. In order to stay competitive, cable providers need to fight back with new and improved services such as more HD programming, Internet gaming, pay-per-view, even social networking, according to Rod Tiede, CEO of Broadcast International (OTCBB: BCST) ("BI"). But Tiede believes that the cable infrastructure is not up to the task because of inadequate video compression technology.

"Your TV doesn't need to remain a passive entertainment device," said Tiede. "Just like a computer, it should be a portal to a whole world of services. The problem is that those services require tremendous bandwidth resources and must be delivered in HD. In the near term, IPTV is in a better position to offer that bandwidth because telcos are building out their infrastructures from scratch. But even new fiber initiatives such as those from Verizon and AT&T will be challenged to deliver the volume of HD-quality programming users will demand. Cable providers are in much worse shape, however, because they are saddled with older infrastructures and fixed bandwidth. The only way they can stay competitive is with better video compression technology."

Industry experts agree that a crisis in bandwidth is looming as user demand for video, particularly HD programming, accelerates. A recent press release announcing a new report by CMP market research group, Heavy Reading, states that "surging demand for high definition TV, video on demand, time-shifting video services such as digital video recorders, and Internet video is rapidly depleting bandwidth reserves on cable networks and will force cable MSOs to upgrade their networks with new technologies aimed at conserving bandwidth."

Stan Schatt, research director at ABI Research concurs. As Schatt told Ars Technica: "Uploading bandwidth is going to have to increase, and the cable providers are going to get killed on bandwidth as HD programming becomes more commonplace."

"They will be brought kicking and screaming into the 21st century," he added.

The bandwidth crisis will be particularly severe in the U.S., which has dropped from fourth to 15th place on the broadband ranking kept by the Organization for Economic Cooperation and Development. Michael Kleeman, a senior fellow at the Annenberg Center for Communication at USC, has cited video compression as a technology critical to the resolution of the bandwidth crisis.

Currently, the vast majority of video is delivered at the MPEG 2 standard of 19.4 Mbps. "That number needs to come down by close to 80% for both live and pre-recorded video in order to make a real impact on the bandwidth crisis in the cable industry," said Tiede.

Solutions such as switched digital video (SDV) are currently being explored by cable providers to address the bandwidth crisis. But SDV is an extremely expensive solution involving change-out of end-user devices, and will not address the critical upstream bandwidth issues. SDV will likely be used in conjunction with more efficient encoding technologies as well as plant upgrades in order to provide a longer-term solution.

CodecSys delivers live HD at 3Mbps

Broadcast International's patented video compression software, CodecSys, delivers live HD video at 3Mbps, cutting bandwidth requirements to a mere fraction of that currently required for HD-quality video over satellite, cable, IP and wireless networks. CodecSys achieves its breakthrough performance through a patented, multi-codec approach in which the video stream is analyzed and the codec best-suited for a particular frame or video sequence is automatically selected from an entire library of specialized codecs.

These specialist codecs are designed to handle particular types of high-bandwidth video frames or streams, such as fast-motion sequences in a basketball game or explosions in an action movie. These types of video are extremely bandwidth-intensive and pose chokepoints to generalist codecs. By selecting the best expert codec for the job, CodecSys is able to eliminate these chokepoints and offer performance several times higher than competitive products based on general-purpose codecs.

The need for a "future-proof" solution

Teide cautions cable providers against making choices that won't adapt to changes in the standards and technology of the dynamic video market. "Infrastructure providers need to make sure that they are choosing the right strategy for the long haul, not just one that meets short-term demand. Long term, they need an open, scalable solution that is easily upgradeable as standards change, and one that is capable of handling rapid increases in volume," said Tiede.

With CodecSys, codecs can be upgraded and added through simple, cost-effective software downloads while other commercial solutions require costly, full replacement.

The CodecSys software resides on a multi-core processor hardware platform that is also highly programmable and scalable, enabling users to add additional processing power by simply adding extra processors.

"Right now," said Tiede, "there are literally billions of dollars in video compression infrastructure in the cable market that will have to be thrown away when new standards like H.264 are adopted because the software and hardware on these encoders are so tightly coupled. You don't have to throw out your computer every time Microsoft launches a new version of software. Why should you have to throw away a $50,000 piece of equipment like an encoder? It just doesn't make sense."

About Broadcast International

Broadcast International is a leading provider of video-powered broadcast solutions, including IP, and digital satellite, Internet streaming and other types of wired/wireless network distribution. BI's patented CodecSys software is a breakthrough, artificial intelligence-based video compression technology that cuts video bandwidth requirements more than 80% over satellite, cable, IP and wireless networks. By slashing bandwidth needs, CodecSys enables a new generation of applications such as streaming video to cell phones, and offers unprecedented price/ performance benefits for existing applications such as HD video.

Broadcast International is a public company (OTC BB: BCST) headquartered in Salt Lake City, UT. For more information go to www.brin.com and www.codecsys.com.

Forward-Looking Statements

All statements in this news release that are not based on historical fact are "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995 and the provisions of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (which Sections were adopted as part of the Private Securities Litigation Reform Act of 1995). While management has based any forward-looking statements contained herein on its current expectations, the information on which such expectations were based may change. These forward-looking statements rely on a number of assumptions concerning future events and are subject to a number of risks, uncertainties, and other factors, many of which are outside of our control, that could cause actual results to materially differ from such statements. Such risks, uncertainties, and other factors include, but are not necessarily limited to, those set forth under the caption "Additional Factors That May Affect Our Business" in the Company's most recent Form 10-K and 10-Q filings, and amendments thereto. In addition, we operate in a highly competitive and rapidly changing environment, and new risks may arise. Accordingly, investors should not place any reliance on forward-looking statements as a prediction of actual results. We disclaim any intention to, and undertake no obligation to, update or revise any forward-looking statement.

Source: Business Wire

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