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Service providers now can now use one system and one vendor to deploy video on demand (VoD) and broadcast television over copper to compete with cable and satellite companies for consumer wallet share.
Pleasanton, Calif.-based Tut Systems Inc. (www.tutsystems.com) announced in November its acquisition of Lake Oswego, Ore.-based VideoTele.com Inc. ( www.videotele.com), a subsidiary of Beaverton, Ore.-based Tektronix Inc. ( www.tektronix.com). The deal will enable Tut to offer a complete video on demand (VoD) and broadcast digital television programming system, from the head-end video encoding and delivery system to the voice, video and data distribution equipment in the central office (CO) says Steve Klein, Tut’s vice president of carrier marketing.
There are currently approximately 120,000 VoD subscribers in between 80 and 85 deployments around the world says Ryan Jones, an analyst with Cambridge, Mass.-based The Yankee Group ( www.yankeegroup.com). "The majority of the market consists of smaller ILECs and IOCs right now."
While current numbers are nothing special, the potential market for VoD and broadcast digital television is driving deployments and technology advancements. "More than 24 million households will have access to VoD in two years, says Josh Bernoff, a principal analyst with Cambridge-based Forrester Research Inc. (www.forrester.com). The report, Telco Video Delivery on the Brink, published by Scottsdale, Ariz.-based In-Stat/MDR Group (www.instat.com) predicts that there will be 1 million subscribers to telco video services by 2004.
Tut’s acquisition of VideoTele.com gives it a foothold in this early stage market. "VideoTele.com is really the unchallenged leader in the encoding and head-end equipment side of the video over twisted pair industry," The Yankee Group’s Jones says.
Klein says adding the Intellihub equipment to the video delivery system will significantly reduce the cost to deploy video over copper. Using the Intellihub, the cost to deploy video over copper to 1,000 subscribers will cost between $55 and $65 per video subscriber, Klein says. Deploying the same system using an IP router doing multicast, which is what a number of providers use now, cost between $140 and $150 per subscriber, Klein claims.
Tut has no immediate plans to integrate VideoTele.com’s equipment into any existing Tut equipment, or package the two platforms in exclusive arrangements. VideoTele.com has a number of relationships with other access system vendors, such as Rohnert Park, Calif.-based Next Level Communications Inc. ( www.nlc.com), Petaluma, Calif.-based American Fiber Communications (www.afc.com) and Petaluma-based Calix Networks Inc. ( www.calix.com).