[opendtv] Re: Food for thought

At 8:51 PM -0500 2/20/07, Manfredi, Albert E wrote:

Craig Birkmaier wrote:


 The cable industry is in no rush to be rid of the analog tiers.


I thought they were in a rush, for something far more lucrative: VOD.
After analog OTA shutoff, cable companies should have no legal
requirement to continue to transmit an analog tier. They would only do
so if it makes smart business sense.
There is NO LEGAL requirement for cable to operate an analog tier today. There are a number of cable systems around the country that are 100% digital. And virtually ALL overbuilds, whether by cable or Telcos are 100% digital. This is a legacy issue, with a huge upside potential for the cable systems, thanks to the fact that virtually all existing analog TV receivers are also analog cable ready.
Maintaining the analog tier is a business decision for the cable industry. If they upgrade the entire system to digital they will need to provide STBs for virtually all subscribers. This is a double edged sword, as it means the price of limited and extended basic will need to increase, but they will add revenues from box rentals.
There are two forces moving the industry in the direction of all digital plants: 

1. The need for more bandwidth to support broadband, VOIP, and VOD;
2. The threat of legislation and/or regulation requiring the systems to offer programming on an ala carte basis.
IMHO the cable industry will drag its heels on conversion to digital, hoping to capture a significant percentage of "the laggards" after February 2009. Once they have captured this potential audience, they will then migrate to all digital plants as it makes sense relative to the capital expense of the upgrades. 

Regards
Craig


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