Consumer demand is driving Cable to increase purchases.............
digitaltelevision.com
The Business of Digital Television: May 1999
Digital and Cable: Consumer Demand Increases Expenditures
By Douglas I. Sheer
Just as TV stations have been making a steady transition to digital and HDTV, so too have cable operations across the country, that have been shifting their shopping priorities to get ready for the digital era. Indeed, equipment sale reps are reproting record sales for the conversion to digital.
"Cable has been very good to me in the last year," said Bruce Ballantyne, principal of Brit Video Systems in Cumberland, an equipment rep in Rhode Island that covers the New England area. "In New England, the conversion to digital and the upgrading of the cable infrastructure have been strong trends."
"For cable people, routing, servers--particularly video program servers and automation for servers that don't have a hardware control system of their own--have been strong categories," he added, "but, what's been hot across the board has been conversion equipment such as A to D and D to A converter boxes. So much so that perhaps one half of what we did last year was sell tons and tons of converter boxes."
The main ongoing trend among cable operations and MSOs in New England, Ballantyne indicated was the retro-fitting of the cable infrastructure to be more fully digitally capable, and that this has meant "installing digital routing, digital master control and servers", he said. Another trend he sees forming is towards regional cable operation consolidation. Several of his New England regional cable clients have in fact centralized their hardware facilities on New York's Long Island.
Asked about the potential growth of the hardware market in cable, Ballantyne said "cable expenditures are up, reflecting the gearing up for digital server-based operation and automation as well as towards streamlining operating costs."
Harry Glass, President of Omnivue, Inc., a New York City-based rep covering the area between West Virginia and Maine, also cited the push towards digital as a primary moving force in equipment purchasing by cable facilities.
"Gearing up for digital, not so much on the transmission side, but definitely on the acquisition side, is going on, so a lot of digital cameras and non-linear editing systems are being bought," he said. "After all, cable's big motivation is still that they have a lot of channels to fill up with material, so you know there's a lot of CG's (being used) to fill the space--messaging systems if you will.
"We've also been selling a lot of logo inserters for cable channel identity," Glass added. "Routing and switching products are moving well to cable, especially for new facilities. Even though there is still a lot of analog around, the movement is definitely to digital.
Glass also said he expects spending to continue at about the same level as last year, although he did say that digital was "being emphasized at the expense of analog."
Dick Turchen, President of Communication Marketing and Consulting, Ltd. in Chestnut Ridge, N. Y. is one of the most experienced independent reps in the country, having been in business for 37 years, and one with a truly national view of trends. According to Turchen, cable is busy gearing up for competition with the telephone companies and even security systems companies by upgrading their plants to be more fully digitally capable.
"We rarely know specifically where the equipment goes [since it goes mainly through professional video dealers serviced by the reps], but in the broadcast and cable end it tends to be the 'standard stuff.' What I'm hearing is that the cable guys, the big ones, like Cablevision, the MSO's, are still buying very high-end stuff, like the TV stations, But, they're also buying a lot more of the smaller type of digital cameras like the Sony 3-chip DVCAM", he added.
Rick Scott is a sales associate at Pacnor Marketing, Inc., the Lynnwood, WA-based independent manufacturer's representatives serving the northwestern part of the U. S. According to Scott, consumer demands for simpler Internet access are driving cable companies to become much more competitive with local telephone companies.
"To me, right now, the thing we hear that's hottest is the cable modem and cable Internet access" said Scott. "Most of the majors, the MSOs, are stepping up to their version of digital cable and have upgraded to do so."
Another product area that Scott says is strong for Pacnor among cable customers is that of computers and scan conversion to NTSC video products, where his firm reps a range of devices that provide a link between PCs and video equipment.
"But", said Scott, "that is probably just a patch, a Band-Aid, from where they (cable) are really going, which will be all-digital and won't need all the converters we sell so many of now."
He also mentioned that building out the networks to reach currently unserved areas is also hot.
Most feel that HDTV and consumer demand for improved quality would drive cable company hardware purchases once enough sets were out there, because "When people actually see the difference, the issue (of quality) will come to the forefront".
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