Creative's Drx2 has a C-Cube chip on it, the Drx3 has a Sigma chip, and replaced C-Cube.
Small cable ops go digital.........................
cableworld.com
Going Digital Key To Small Guys' Success
By Jim Barthold and Karen Brown
With pocketbooks to match the size of their systems, smaller, independent cable operators are riding the crest of the technology wave with their bigger, merged MSO compatriots.
Like their bigger counterparts, the top priority is digital, said Mark Bishop, hardware sales VP for the National Cable Television Cooperative Inc., a 15-year-old, member-operated purchasing organization, that uses the bulk power of its membership to extract reasonable equipment prices from vendors.
"These guys are all over it," he said succinctly, noting that digital is as much a defensive tool as a way to build new revenue streams.
Going digital is no walk in the park for a smaller operator, whose history has been built on adding more channels as more channels - and correspondingly attractive technology - became available.
"Digital is just such a huge leap technically and in complexity and in the kind of skill set that your employees need," said Co-Op president Michael Panzik.
Nevertheless, he said, "What we advise member companies, is to learn to accept change and profit from it and be involved with it; otherwise you're going to get run over by it. The offers that are being made by our competitors to their customers change and you really have to change with them."
System size factors into who goes digital, added Bishop, although that's becoming less crucial than it was a couple years ago when headend and set-top costs made it out-of-reach economically.
Going digitial
"Getting into digital from the headend is kind of a no-brainer for anybody with 5,000 subs," he pointed out. "We're seeing guys with 3,000 subs getting into it."
That's one reason the Co-Op backs AT&T Broadband and Internet Services' HITS2Home digital program. HITS2Home blends the Headend In The Sky (HITS) satellite programming delivery with the existing fiber/coax infrastructure. It gives smaller operators a shot at digital programming and revenues, including multiplexed pay-per-view, without selling their souls to DBS - which, at least for a while, offered to provide its digital programming as a complement the local operators' analog, mostly antenna-based channels. "I think most of the programs that I've been made aware of, the splits have been such that it hasn't made sense for the operator," said Bishop. "The satellite people have valued what they bring to the equation at a far higher level than the network operators do."
Smaller operators need to bulk up for economic viability, no matter what the competition. One way is to connect headends. Bishop said that sales of fiber optics skyrocketed from less than $1 million in 1998 to about $14 million in 1999 to become the single largest sales category. Similarly, optoelectronics sales jumped from roughly $500,000 in '98 to more than $4 million in '99.
"It all revolves around getting the most subs possible on a headend," he said.
Consolidation
Headend consolidation, said Panzik, will likely continue and grow.
"That's one of the projects we've kicked around here for the past two or three years," he said. "We call it the Headend In The Dirt - instead of Headend In The Sky. The idea is that you would have six or eight or 10 master regional headends around the country that would feed hundreds, or even thousands of cable systems."
Pretty big plans, but hardly out of reach, he argued.
"We have a lot of members that have led the way in consolidating and tying together smaller systems with fiber and so forth," he pointed out. "Why wouldn't a master cable system in Omaha be able to serve every cable system in Nebraska and Iowa and South Dakota and so forth?"
Of course, for every step forward, something falls by the wayside. In this case, analog technolo-gy is dropping off the sales charts.
"We can't give away analog headend gear," Bishop said, somewhat ruefully.
It's a small price to pay for what's coming up next: telephony, high-speed Internet and, no doubt, interactive services.
"For our average member, the easiest new technology to get into is digital - the ability to roll out additional channels as well as the ability to participate in the pay-per-view game," Bishop noted. "After that, it's the opportunity to become an ISP (Internet Service Provider)." This is not necessarily the route everyone will follow, or, for that matter, needs to follow, cautioned Panzik.
Small towns
"It's hard for me to believe that the definition of a small-town cable system will need to be full digital, high-speed cable modems, telephony," he said. "I grew up in small towns, and I just don't think that's the definition that small town residents will demand."
Human nature being what it is, and having seen the hype around advanced ser-vices, those rural subs are certain to demand more, Panzik agreed. "If you ever lived in a small town, you were so thankful to get cable in the first place, much less the fact that it had 35 channels instead of 85 was pretty low down on the list of things to worry about," he added. That, though, is probably only the case in the smallest of communities, where hundreds of people are still linked to a single, independent small cable operator. Elsewhere, change is afoot.
"You just can't continue to do business as usual over the next 10 or 15 years because you're just not going to survive," Panzik agreed. "We have guys in the phone business. We have guys who are doing telephony over their cable systems who are not traditional phone companies. We have a lot of guys doing high-speed cable modems."
And, he emphasized, the Co-Op is still growing because, in the end, being an independent cable operator is an attractive way to make a living. "The independent cable industry is far from dead," he emphasized. "If you come to our annual members' meeting next July and August, you're going to see a very vibrant, excited, committed-to-change kind of industry." |
