Cable Ops Will Take Same Hybrid Approach to Streaming as They Did with the Network

U.S. cable TV operators are following a playbook long in place with respect to the core network architecture. The key notion is that a “hybrid” approach is best for transition periods between technology-driven eras.

For the core network, that meant replacing the all-copper “tree-and-branch” network with a “star optical core” plus a tree-and-branch distribution network. That hybrid fiber coax network remains the mainstay of the cable TV network.

On the other hand, Comcast already has signaled that for very high capacity access networks featuring a minimum of 2 Gbps of symmetrical bandwidth, a direct fiber to home network is needed.

So if the all-copper network was the past, hybrid fiber coax is the present, then fiber to the home is the future. But the key business insight is that the hybrid  approach is the best bridge to the future.

That likely will be the same approach cable TV operators take with respect to the evolution of their video services.

With the likelihood that Comcast will launch some sort of “over the top” video service, other cable operators are thinking that is a reasonable hybrid strategy as well.

“We've been considering ways to provide compelling services and packages at lower retail price points, with a lower content cost structure, and with the inclusion of direct-to-consumer services,” said Tom Rutledge, Charter Communications CEO. “We haven't found that product mix yet and we don't think anyone else has either.”

“What I was saying was that our view is that we can mix those products into products that we sell to satisfy the entire customers’ video needs,” said Rutledge.

So expect to see OTT streaming products coexist with linear products for quite some time. It is the same model cable TV operators took with respect to their core access networks.
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