We spoke with Jim Hayes, Chief Marketing Officer, Worldwide Interactive Networks, Broadband Communications Sector at Motorola, during the last NCTA 2001 conference in Chicago, in order to get a preliminary look at how Motorola is positioning itself to offer a more complete version of entertainment across bandwidth in Latin America.
TVyV: What initiatives is Motorola implementing to deploy and drive the era of interactive television in Latin America?
James Hayes: Motorola has three major initiatives to seek to reduce cable operator deployment costs. We try to put together a program that uses different approaches, recognizing that different multiple system operators (MSOs) differ in their ways of facing the market. We work with the individual MSO to understand their business goals in order to create a relationship with the cable operator that leads to individual options. The first area we target is decreasing the cost/price ratio of coding and the overall cost of the head-end ensuring that attractive digital content is available in the right format. Digital Latin America (DLA) is one of the groups in which we have invested to ensure that the operator can access digital content in a cost-efficient manner. DLA offers a suite of additional services including interactive guides, digital music, premium channels, pay-per-view (PPV) and Internet access. For starters, DLA services offer a package of premium digital services that the operator can combine with existing analog channels to create a more robust product offering.
TVyV: What can motorola's cable operator expect when it comes to set-top boxes?
J.H.: Our decoder offering is the second area to help the operator in building a successful digital business. In addition to the DCT-1000 base product, we offer the more advanced DCT-2000 and the very powerful DCT-5000. Each of these decoders can coexist in the same system and each one has a different price and functionality that allow the operator to specialize its offer to the purchasing power of the different economic groups that make up its subscriber base. The DCT 1000 will allow the cable operator to offer basic Internet services, interactive TV guides and pay-per-view (PPV). The DCT 2000 offers more advanced applications such as video on demand and television commerce. Finally, the DCT-5000 is our "triple" platform: it offers the potential to provide video, voice and data from a single decoding package. Motorola decisively supports third-party involvement for its set-top boxes, creating a highly open environment for adding functionality.
TVyV: What other personalized services will Motorola offer cable operators?
J.H.: Motorola sees itself in a close relationship with cable operators in Latin America because our ability to succeed is linked to their ability to succeed. Therefore, we try to create the appropriate solutions to the customized packages of each cable operator in the region, from a large MSO to the independent cable operator serving specific markets. To achieve that goal, we spend a tremendous amount of time with the client to find the right solution.
Clearly, an important benefit of Motorola's digital system is that the increased channel capacity creates a service flexibility that allows the cable operator to generate a greater return by offering selective programming for populations willing to pay for it. Thus, by creating digital services and personalized content packages, such as special sports, music, news packages or ethnic programming aimed at particular customer segments, the operator can create a service that adds quite a bit of value for a segment of the consumer willing to pay for it. In an analog world, it's not normal for it to be cost-effective to tap into these niches because bandwidth is a luxury. Since digital compression allows for more content in the same bandwidth, it can become cost-effective to offer this custom programming.
Financing is another area that should normally be tailored to the needs of individual operators. Different business plans involve different money flow models and different needs in terms of scheduling investments and debt service. Again, we look closely at all aspects of the operator's business to try to customize a financial solution.
TVyV: What message would you like to give to operators who are planning to implement digital services?
J.H.: The implementation of digital services is one of the best investments that an operator can make in his system, since it creates a platform to which he or she can begin to add many sources of profitability, reinforcing the services. Motorola understands that operators have different needs based on different business plans and has therefore assembled some tools to build a successful digital business under a variety of models. Digitalization is the future of cable television because of the tremendous advantages it offers. We are committed to offering the best options to cable operators in Latin America.
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