Avail-TVN+Comacast Tier 2/3 BattleThe hundreds of tier 2 and 3 cable and IPTV service providers that dot the video service provider landscape are of great interest to Avail-TVN and Comcast Media Center, a subsidiary of Comcast. Recent deals illustrate the growing turf battle between the two.

Comcast Media Center has long coveted the business of the smaller, independent cable provider, having marketed their headend-in-the-sky (HITS) product as a solution for content aggregation. HITS allows smaller cable operators to aggregate multiple channels from a single source and more efficiently transport them to their headend for distribution to their end customers. HITS was of particular interest for smaller cable companies who wanted to transition to a digital tier of programming.

Avail-TVN Thinks MPEG-4 is the Answer
Avail-TVN has somewhat similar roots, having begun as Avail Media, a HITS-type service initially targeting small IPTV providers, primarily telcos, with content aggregation, using an MPEG-4 IP stream of aggregated content, as well as video-on-demand (VoD) content. Avail-TVN came about as the result of an acquisition of TVN by Avail. TVN was a leading provider of VoD and pay-per-view (PPV) content to the cable industry.

Avail-TVN is now aggressively pursuing small tier 2 and 3 cable providers, CMC’s ‘bread and butter’ turf, encouraging them to migrate to MPEG-4 and use their HITS platform for content aggregation. They’ve persuaded several smaller cable companies to do just that, most recently Cass Cable TV, an Illinois based tier 3 cable provider.

“Avail-TVN provides a seamless transition to MPEG-4,” said Jon Romm, Chief Operating Officer, Avail-TVN in a press release. “Rural providers who want to enhance services and offer a better viewer experience choose Avail-TVN for our managed service approach, next generation services and extensive content relationships. We are delighted to be working with Cass Cable to help them offer more to their subscribers.”

There are some fighting words in that quote, namely “transition to MPEG-4.” That’s a point of differentiation over CMC, which to date, does not offer an MPEG-4 based aggregation product. MPEG-4 is an encoding scheme that offers more efficiency than the MPEG-2 standard, which most tier 2 and 3 cable providers are currently based on. MPEG-4 allows a service provider to use less bandwidth for video transmission into the home, freeing up bandwidth for other things, including more HD channels, more VoD capacity, and better broadband Internet — all important attributes to have in a competitive marketplace. The transition is not without its own challenges though, since it usually involves the expensive proposition of swapping out MPEG-2 based set-top-boxes in the home.

CMC Fights Back With VoD
CMC isn’t exactly standing still and watching Avail-TVN take market share. They recently announced some interesting developments regarding VoD content, which targets the tier 2 and 3 sector. They will launch a new HITS On Demand Content Distribution Network (CDN), which aims to add “…thousands of titles from Comcast’s content distribution platform available to third-party operators, without the need for them to upgrade their local storage.” CMC says the new On Demand CDN solution will use caching and other algorithms to take advantage of centralized content hosting, maximizing cloud storage of content, presumably saving operators the expense of having to add local storage.

“The new HITS On Demand CDN satisfies growing subscriber demand for more content that fits their schedule, delivered using a familiar interface and leverages cable providers’ existing infrastructure. This helps to keep customers turning to cable first for compelling video entertainment,” said Leslie Russell, Vice President and General Manager of HITS in a press release.

This strategy takes direct aim at Avail-TVN’s MPEG-4 value proposition because CMC is expanding the availability of VoD content to tier 2 and 3 cable providers who have not yet transitioned to MPEG-4. “Existing infrastructure” in Russell’s quote is referring to MPEG-2 based providers. By adding more content for MPEG-2 providers, while presumably lowering some of their costs to do so, CMC hopes these MPEG-2 providers will think twice when Avail-TVN comes calling. Maybe they’ll think they can ride the MPEG-2 horse a bit longer, before having to make what might be perceived as an expensive migration to MPEG-4.

What will be next in this escalation?