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Hybrid solutions for cablers in Latin America

The pay-TV sector is revolutionizing the way of seeing and accessing the content offered by programmers, but this sector is run over by countless technological advances that are not always within reach.

The convergence between television and the internet and the birth of the digital age have opened up the possibility of new markets and new services for companies such as cable operators (CBs). However, systems installed in regions such as Latin America are designed to fulfill very specific transmission functions that do not accommodate the new interactive service options; to do this, the installed systems must undergo a transition in their components that optimize the installed capacity and provide elements for the inclusion in the system of new functions.

The network systems installed by OC in LA are based on analogous components that allow a limited interactivity of the subscriber with the contents offered, this network architecture has technological limitations that do not allow to offer quality digital or two-way services, demanded by today's users, which makes it necessary to transition equipment to digital systems; this sounds as simple as buying a new TV with digital sound, but the idea of this change takes months and has very high costs for companies.

These limitations of costs and adaptation time have given way to the emergence of intermediate solutions in economic and technological terms, which allow to meet market expectations and the basic economic viability of any business. The intermediate point between the analog era and the digital age is the creation of hybrid solutions that share elements of the two types and allow a total quality service. Hybrid networks offer an accessible intermediate solution for small entrepreneurs where the almost impossible and expensive task of creating a fully digital network is avoided.

Hybrid networks

- Publicidad -

Hybrid networks are those network solutions where the OC can continue to offer traditional services of intermediate quality, analog, and new packages with 100% digital quality under the same architecture, the hybrid solution allows the coexistence of the two systems. This intermediate transition is based on two key concepts that are the upgrade of the network header and subscriber receiving equipment (STB) to digital format and the transmission by the same plant of digital and analog channels.

The digital transition of the headend is based on a new component of the system known as encoder, which becomes the heart of the digital system. The encoder fulfills the basic function of transforming into a single compression format all types of signals to be transmitted by the same channel and has the same function assigned to an encoder device in analog systems. The encoder receives from the receiving devices the signals that come down from the satellites that provide content, interprets its compression format and then transforms it to the one used by the plant and, finally, transmits it to the subscribers. It should be clarified that there is no single encoder that interprets all types of compression, one is required for each digital format. The importance of the encoder lies in the possibility it offers to receive in the same format all the content, the advantages in time and space are infinite if it is taken into account that the reception and modulation processes necessary in analog systems are now set aside, the encoder performs in the same hardware the reception and coding of signals, the headend is therefore now smaller as less space is required for receiving devices and modulation by signal type.

As for subscribers' STBs, they must have decoders compatible with the type of encoder installed on the headend. Likewise, the advantage is that only one type of decoder is required inside the box to receive all the premium content, PPV, VOD, digital music channels, etc.

Hybrid networks allow a more efficient use of the bandwidth available in the plant, analog transmissions require a bandwidth of 6 MHz per channel. Typical networks in LA have a total width of 750 MHz which greatly limits their ability to offer new services. The transition to digital offers the possibility of transmitting a greater number of channels thanks to digital compression systems such as DigiCipher II, PowerVu, DMX, MPEG, 256 QAM, etc. The plant now has the capacity to transmit over an analog channel of 6 MHz 6, 7, 8 and even more digital channels depending on the type of compression used and the resolution to be obtained, the higher the resolution desired, the greater bandwidth required; however, an average quality allows to transmit 7 or 8 digital channels with cinema quality in 6 MHz. The transmission plant receives from the headend the signals already compressed in digital format and also transmits them directly to the subscribers. The possibility of transmission in this type of format depends again on the encoder, the optimal use of bandwidth is given thanks to compression.

Accessible hybrid network solutions, digital content providers: DLA

So far, the proposed solution seems to be adequate to the needs of the sector in LA, what must be seen now is the cost of acquiring those encoders if it is taken into account that as many compression formats are required to be received. The value of an encoder can range between U$40 thousand and U$50 thousand which makes COs think of the cost involved in offering these new services and the possibility of recovering the investment especially when it comes to small networks with less than 10 thousand subscribers; the possibility of transition for these companies is minimal even talking about hybrid networks. Taking into account this problem, new options arise to acquire the services through programming providers that offer the possibility of accessing these contents without the need to acquire the required hardware , these providers offer digital channel packages for a monthly value, which implies for the OC a reduction in costs for the purchase of equipment, it avoids time and costs of negotiation with each programmer and facilitates the process of receiving and transmitting content.

Digital Latin America

- Publicidad -

DLA is a company that offers a complete, economical and effective solution of digital content such as PPV, VOD, premium channels, digital music, A-La_carte programming, and complementary services such as CAS (Continental Authorization Service), EPG, equipment financing, etc. to cable operators in Latin America based on the existing network system. DLA was created in April 2000, thinking exclusively of the Latin American market as a response to the possibility of growth of the sector in the region. DLA becomes the first company for LA to offer these services designed for small COs who want to make the transition to digital system and offers a HITS (headend in the sky) type solution for hybrid networks.

The advantage for a CO to access digital content through a service provider goes beyond reducing the costs of acquiring encoders. The solution offered by companies such as DLA allows the operator to negotiate with a single provider and receive all their digital content from a single provider. The OC no longer needs multiple receivers and modulators to manipulate different signals that must be modulated and demodulated several times before reaching the subscriber thus losing quality and fidelity. The OC requires a single receiving antenna that lowers from the satellite of its provider a single digital signal that can be directly transmitted to subscribers. For the OC this service involves the purchase of receiving devices whose value is around U$4 thousand to U$5mil, since the necessary encoders are installed in the supplier's reception center.

In addition to offering all digital content and interactive services in a single package, DLA offers complementary services that help the OC decentralize control operations that also require large investments in equipment, infrastructure and personnel. DLA offers a CAS service which has as its only requirement a connection between the Billing System (BSM) of the OC and the CAS center. Although the one who gives the final authorization of the service is the CAS, the OC is the one who controls and will continue to control the access to the services of its subscribers, the BSM is the part of the system that informs of the request and makes it finally take place. Therefore, the OC manages to have quality services at a lower cost without losing the autonomy it needs for its operations.

Finally, DLA offers end-to-end advice to the OC in the process of updating equipment and in the marketing and launch of its new service packages. DLA leaves the OC the freedom to negotiate directly with new programming and equipment suppliers, as well as outsourcing control functions such as CAS.

In conclusion, those COs who wish to make a transition from analog to digital in their system and in their service packages, have at their disposal several economically different options that offer great possibilities for new business and higher income; on the one hand, a transition is offered in the headend of the network with the incorporation of encoders that allow a digital transmission, or on the other hand the hiring of a content provider that facilitates the process.

The decision to make one or the other option will depend on the economic capacity of the company, the configuration and type of equipment that handles the analog network and the number of subscribers that the OC has in its database. The CO must take into account the cost of offering these new services and the possibility of recovering this investment through the provision of value-added services without greatly affecting the price of the packages for its subscribers.

- Publicidad -

 

Special thanks to Richard Rorhbach and Patrick Bensadoun of DLA for their collaboration. www.dlatv.com

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