HBO is joining the long list of media companies entering the Internet video download space. The service will be branded HBO Broadband, and will test launch in Green Bay, WI. The service will not be direct marketed to subscribers. Rather, it will be marketed through cable/IPTV operators, as a part of an existing programing subscription or for additional fees. This approach is somewhat similar to how ESPN markets ESPN 360. HBO Broadband is only for PC viewing, at least initially, and an application is downloaded to the subscriber’s hard drive to control the viewing experience.

We can expect to see numerous additional announcements of video download strategies in 2008. Everyone is trying to get their “feet wet” with this application and figure out where it fits on the video consumption continuum. The competitive threats aren’t clear yet, but over the next couple years, consumers will have a variety of options in how they consume video and media. As things begin to shake out, we will begin to see the impact of these choices on the traditional pay television subscription model, and how triple play providers need to adapt.

HBO announced at the SCTE Cable-Tec Expo that all of their HDTV programming will be distributed in MPEG-4. HBO will distribute a total of 26 channels in HD MPEG-4 by sometime in 2008. This HBO decision has implications for all video service providers, with particular impact on operators who operate in an MPEG-2 environment.

MPEG-2 operators will either have to transcode the HBO MPEG-4 signal back down to MPEG-2, or upgrade their networks (and customer set top boxes) to offer MPEG-4 distribution. To make things a little more complicated, HBO will encode their signal at 8 Mbps, and may mandate no further compression of that signal. This impacts TelcoTV operators who are utilizing a DSL infrastructure, because it will become a ‘bandwidth’ hog, compared to other MPEG-4 signals. The end effect may be a competitive advantage to DBS and cable MSOs who can more easily distribute an 8 Mbps HBO HD signal, thus providing a potentially better HBO viewing experience.