Switched Digital Video Is Thriving

The Switched Digital Video (SDV) technology is likely to boom in near future as more and more large cable MSOs in the U.S. are gradually moving towards overall services convergence. SDV technology distributes digital video content through cable network in a cost-effective manner so that additional uses can be made using the free bandwidth. Cable MSOs are opting to deliver IP-based and cross-platform video services, and support more targeted advertising. Deployment of SDV will free up bandwidth that can be used to offer high-definition TV channels (HDTV), HD video-on-demand programs, and DOCSIS 3.0. 

Time Warner Cable Inc. (NYSE:TWC), the second largest cable TV operator in the U.S., is the pioneer in deploying large scale SDV technology. The company is rolling out SDV in three major markets of Los Angeles, New York City, and Dallas that together account for above 6 million subscribers for the company. Cablevision Systems Corp. (NYSE:CVC) also started implementing SDV technology. Recently, Comcast Corp. (NASDAQ:CMCSA), the largest cable MSO in the U.S., also hinted that the company may follow suit in near future. Comcast had earlier given trial with SDV but put it into back burner.
 
The SDV platform can also be utilized by cable MSOs for other applications like IPTV and the upcoming 3DTV services. Using the SDV technology, cable operators can deliver both real-time and on-demand video services to IPTV set-top boxes, personal computer, and mobile handsets. On the other hand, switching may offer a better alternative for 3DTV content offerings since this may target a small fraction of customer base at least in the initial stages and broadcasting those contents will not be the proper utilization of bandwidth.
 
We believe deployment of SDV will highly benefit BigBand Networks Inc. (NASDAQ:BBND), a pioneer in SDV platform development. The company is the major supplier to the Time Warner Cable. As of now, BigBand’s switch is installed in more than 28 million homes. If Comcast finally opt for SDV then Cisco System Inc. (NASDAQ:CSCO) and Motorola Inc. (NYSE:MOT) may be benefited in a big way since these two companies supplied core SDV platforms to Comcast in its earlier trial runs. Arris Group Inc. (NASDAQ:ARRS) and Harmonic Inc. (NASDAQ:HLIT) may also get more businesses for their respective edge QAM products.
 
At the end of 2009, U.S. cable operators together deployed SDV in around 35 million homes compared to around 25 million at the end of 2008. Various industry sources predicted that deployment of SDV may reach up to 90 million homes by the end of 2012.

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