Blog | MVPDs & Global Operators
January 29, 2015

Tiered encryption solutions are becoming increasingly important to bandwidth monetization

Allison Olien, Senior Director

Perhaps no one can appreciate the accelerated pace of change better than independent cable systems, many of whom can trace their businesses back to the “CATV” - community antenna systems of the late 1940s and 1950s. In those days, the business model was almost entirely based upon the retransmission of broadcast TV stations from the closest markets.

Fast forward to today’s business model for cable operators and the discussion centers around thinning margins for traditional video service and the increasing importance of allocating more bandwidth to IP-based broadband services such as Wi-Fi, advanced video and IP telephony, while supporting the broadband Internet needs of other local businesses.

One thing that has changed in the latest phase of innovation has been the growing reliance of cable operators of all sizes on centralizing their technology solutions. A big reason for this shift has been the need to support tiered encryption of video services. When digital video was first offered, it was possible to monetize the expense of first-generation MPEG-2 digital set tops by limiting their roll out to homes paying for digital video.

But, the industry’s all-digital migration coincided with the release of more sophisticated STBs that could also support MPEG-4 as well as a plethora of advanced video services, like HD, VOD and DVR. These set tops were prohibitively expensive to deploy to a cable system’s entire footprint which led to a common need for a lower cost alternative like the digital terminal adapter (DTA). Because tiered encryption of these all-digital systems requires investing in multiple set-top management solutions, cable MSOs and MVPDs could further minimize the cost of their all-digital migrations by taking advantage of centralized headend management solutions.  

The need for tiered encryption solutions will continue as the industry now migrates toward an all-IP network architecture. As we experienced with digital, migrating to a new platform is the preferred path because its evolutionary approach can minimize the amount of capital that needs to be spent in a given year. In contrast, a revolutionary approach would include changing out all of the legacy gear that relies upon previous technology deployments. A centralized system can help facilitate the evolutionary approach and allow cable operators to switch out equipment at a pace that matches their business models and financial realities.

Whether it is digital, IP or an advancement yet unknown, migrations to new technologies can be challenging. No one knows better than cable operators how changes in the digital marketplace impact businesses and margins. Resilience is borne of ingenuity, innovation and the ability to find strategic solutions to complex problems. Simplifying the latest technologies and adapting to these changes with solutions such as tiered encryption can make the difference between success and failure.