Several blogs including EngadgetHD and UverseUsers.com are reporting on AT&T launching two streams of HD for U-verse subscribers in the St. Louis market. These U-verse customers can receive 2 HD and 2 SD streams, for a total of four streams. Most people who follow DSL powered IPTV recognize that HD is a challenge because of its bandwidth intensity. Most of us also realize that offering HD is a competitive necessity. IPTV providers who utilize DSL as their access technology are at somewhat of a competitive disadvantage against cable and DBS over HD.

Never mind the costs associated with encoding HD content (which, for everyone further down the food chain than AT&T, is a challenge), the challenge with delivering a single HD stream over ADSL2+ (or even VDSL) is significant enough. But in order to compete with cable and DBS, who currently have multi-stream HD capability, delivering two streams (and some would argue even more in the future) is ideal. We are progressing towards HD ubiquity. We’re certainly not there yet, but we will be soon. The concept of multiple HDTV’s in the home, or the desire to watch one HD program while recording another, will become commonplace, and sooner than DSL IPTV providers wish it to. AT&T’s move into two stream HD over their FTTN/VDSL architecture provides a glimmer of hope, It’s too early to tell if they can scale that solution and match their competitors offer. But for them, and for those who look to them for guidance, it’s a start.

In a sign of things to come for interactive television, DirecTV will offer multiple screen options to viewers of the Masters Golf Tournament in April. DirecTV subscribers will be able to select up to four different camera views through their remote control. The camera view options will be located on a “Masters Mix” channel, where subscribers can select the view of their choice in real time. Both HD and SD feeds will be offered. DirecTV will also be offering an interactive leader board “widget”, where viewers can access scores and stats, a top five leader board, Masters trivia and Tournament history by clicking on a small menu icon that appears on each channel.

These developments offer a glimpse into the promise of interactive television, and the competitive differentiation it can bring. DirecTV is being creative with this option, by “simply” providing different broadcast options (ESPN, CBS), a highlight channel, and continuous coverage of two separate course holes, all simultaneously. The “holy grail” for this type of sports broadcast interactivity will be multiple camera angles, where subscribers can change the camera angle on the fly, acting as their own director. We’re a long way off from that, but at least DirecTV is making baby steps in that direction. DirecTV does similar interactive broadcasts with NASCAR. Competing service providers should take notice. It’s these types of features that may well provide the differentiation that they'll need to effectively compete.

Verizon is offering a free Sharp Aquos 19-inch LCD HDTV to new FiOS triple-play subscribers in 8 states. The free HDTV offer is set to expire on Dec. 15th. The offer actually began on October 15th, but was limited to the New York City metro market, which includes New York, New Jersey, and Connecticut. Verizon expanded availability of the offer to Massachusetts, Rhode Island, Maryland, Virginia, and Indiana.

Check out this Multichannel News post for more details.

The rush to get 100 HD channels is on, and Verizon FiOS just announced they're joining the party. If all goes according to plan, FiOS TV customers will get up to 150 HD channels by the end of 2008. The expansion will begin in the Spring of 2008, when Verizon will initially double its current HD line-up to 60 channels on a market by market basis. They will then continue to add channels throughout the year until they reach the 150 bogey. Verizon also announced the expansion of HD VOD content.

This move further illustrates the role HD plays in offering a competitive channel line-up. Nielsen Media Research recently reported that 13.7% of U.S. television households have an HDTV, and 11.3% are actually watching HD programming. Verizon wants to meet the growing demand for HD, and it doesn’t hurt that its 150 HD channel boast trumps DirecTV’s current 100 HD channels by year end campaign. Verizon also hopes to differentiate itself over competitors by emphasizing its FTTH architecture which, they claim, allows an uncompressed HD feed. This gives their customers a so called “true HD experience.” I guess everyone else is giving a “fake” HD experience. Time will tell whether that so called “true” experience offers any true competitive advantage. In the mean time, expect to see an escalation in HD “wars,” as service providers seize on the growing appetite for HD programming.

Echostar/DISH announced their intention to enter the IPTV marketplace, targeting telcos and rural cable systems with an IPTV MPEG-4 transport solution, branded as ViP-TV. ViP-TV General Manger Daniel Daines tells Telecompetitor, “Our solution will allow our partners to offer a DISH Networks television experience to their subscribers, utilizing a DSL or FTTH broadband network.” The announcement is sure to shake up the increasingly competitive IPTV transport/head end in the sky solution landscape. ViP-TV will offer 300 channels, including local broadcast signals from 165 local designated market areas (DMAs). Local broadcast HD feeds from 30 DMAs will also be offered. The ViP-TV programming suite includes ViP-Premier™, which offers 100 channels of national cable networks, ViP-HD™, which offers 40 channels of high definition programming; ViP-Movies™, a menu of 40 popular movie services; ViP-Latino™, offering 30 Spanish-language programming services; and the ViP-International™ programming package, providing 30 programming channels in 10 different languages. “We intend to begin offering signals to strategic telco partners in December, and expect paying customers on the platform in January 2008,” said Daines. He declined to name these “strategic telco partners.” Could this be Embarq’s IPTV strategy?

When asked about the impact of ViP-TV possibly slowing down DBS subscriber growth, Daines replied “We’re ok in slowing the growth of [direct to home], provided we replace it with ViP-TV.” Daines added that Echostar CEO Charlie Ergen is 100% behind the new Echostar IPTV strategy, adding “Charlie Ergen is just as excited about the prospects of IPTV as he was when he first launched direct to home DBS.” The solution includes transport, system integration, and equipment, including set top box solutions. I asked Daines about his competitors, and he replied, “Our competitors know the satellite business, and they do it well. We know the TV business, and we do that well. We have 12 years of experience in TV and 13 million subscribers.” ViP-TV has secured transport rights, but will work with third party content aggregators for content affiliation rights.

This is quite an interesting development. The competitive implications are almost too numerous to list. Who would have thought a couple years ago that a leading DBS service provider would decide to enter the IPTV business, and in some ways, compete with itself. There is much to sort out here including the reaction of Echostar’s extensive DISH dealer network (and retail partners). Daines is giving ViP TV a fairly aggressive timetable – “paying customers by January” - seems very optimistic. Time will tell, but for the time being, ViP’s competitors should have somewhat of a head start. More to follow.

Yet another dust up between DirecTV and a cable MSO, Cox in this case, over who delivers the better HD signal. Multichannel News is reporting that DirecTV filed a misleading advertising suit against Cox over certain Cox Internet ads. In the ads, Cox cites a survey that concluded that cable HD was preferred over satellite HD. That same survey is at the center of a lawsuit between DirecTV and Comcast. DirecTV says the survey was flawed, and thus the data should not be used to assert and support HD viewing preferences among subscribers. Time Warner Cable turned the tables on DirecTV earlier this year, suing them for false advertising over HD as well. DirecTV recently settled that lawsuit.

These lawsuits reflect the growing role HD plays as a competitive differentiator. Service providers take their HD reputation seriously, and don’t take lightly to inferiority claims. All multichannel video service providers are actively executing a HD strategy. DirecTV appears to have much of the HD momentum, claiming around 70 HD feeds today, with 100 promised by year end. These multiple advertising campaigns may be one strategy to slow their momentum. Expect the lawsuits to continue.

DISH Networks announced a series of deals for HD, including a partnership with Sharp to offer discounts on Sharp Aqous HDTVs. DISH will also offer free DishHD service for six months and a free upgrade to an HD DVR receiver. The Sharp television partnership offers up to an $800 discount for a new Aqous HDTV. To top everything off, they will throw in free HBO and Cinemax for 3 monhs. There are obviously a variety of terms and restrictions, including an 18 month term commitment. On the surface, it’s a compelling HD bundle.

The battle for HD subscribers is increasingly becoming intense. DirecTV has garnered much press for their claims of being able to soon offer over 100 HD channels, including local broadcast channels. The cable industry claims to offer better HD reception. Verizon is toting their ability to provide VOD HD feeds. The HD landscape is clear – most competitors are trying to find ways to leverage their own HD edge (real or perceived) to build competitive advantage. HD adoption is appears to be accelerating – and at a pace that many underestimated. The availability of lower priced HDTV’s from retailers like Wal-Mart has certainly played a role. The content community is beginning to catch up, with almost weekly announcements of HD content availability. The result is a marketplace where competitors will need a robust HD strategy, and quickly.

The Cable & Telecommunications Association for Marketing (CTAM) released a report today that says 29% of cable TV customers own an HDTV set, compared with 15% a year ago. “HD sets are flying off the shelves and digital cable consumers are getting an HDTV programming package to gain the full benefits of their new sets,” says CTAM CEO Char Beatles.

The issue for video service providers, particularly IPTV via DSL carriers, is not how to deliver HDTV, rather how do you deliver multiple HDTV feeds. Many are hoping that MPEG4 is the answer. But even with MPEG4, many a IPTV carrier will be challenged to meet this multiple HDTV feed demand, and thus competitively disadvantaged.

Cablevision announced today their intention to add 15 additional HD channels to their iO: Interactive Optimum digital service. The additions will bring their total HD lineup to 40 channels. The channels come from their own subsidiary, Rainbow Holdings’ Voom service. In addition, Cablevision says they will eventually have the capacity to deliver as many as 500 HD channels, maybe even by the end of the year.

Cablevision has the ability to do this because they have probably been the most aggressive among MSOs to implement a switched digital video (SDV) architecture. SDV frees up bandwidth, and only delivers the channels being requested at any given time, as opposed to broadcasting all channels all the time. SDV is no stranger to IPTV operators – it’s the foundation of IPTV and allows telecom operators to deliver digital video services utilizing DSL over copper telephone lines. Cablevision is also quite aggressive with HD. It offers it at no additional charge, unlike most pay TV operators. As a result, they have a significant penetration. “The company has deployed more than 1 million high-definition set-top boxes to customers, and had 734,000 HD customers as of March 31 - an 85 percent increase in HD customers over the previous year.”
Or put another way, as may have been heard in some Cablevision board rooms - "take that DirecTV and Verizon FiOS!"

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.