Trends in Video Delivery Michael Adams VP, Application

Trends in Video Delivery Michael Adams VP, Application Software Strategy March 2008

Agenda How is the delivery of video changing? Drivers Trends The future – 8 years out Summary www.tandbergtv.com 2

How is the video delivery model changing Trends – – – – From From From From One-way to Two-way Broadcast to On-demand TiVo to nPVR TV to TV, PC and mobile (3 screens) Why? – Customers are demanding it – Web leads them to expect it – Targeted advertising requires it What are the delivery network bandwidth consequences? www.tandbergtv.com 3

From One-way to Two-way HFC enabled real-time, two-way by segmenting the network into small service groups with manageable ingress noise characteristics. Real-time, two-way signaling was first deployed in digital cable deployments starting in late 1990’s. Real-time, two-way was a key enabling technology for VOD It also enables High Speed Internet and Voice over IP services Transition completed by 2005 (large operators) www.tandbergtv.com 4

From Broadcast to Unicast TV is gradually moving from a broadcast to a unicast delivery model. This trend started with on-demand programming for example movies on-demand and subscription on-demand (e.g. HBO on demand). Even for live programming, such as sports and news, there are advantages to unicast delivery: – Advertising can be targeted according to individual customer demographics and preferences – Splicing technology (called VOD play-listing) is now being incorporated into VOD servers – nPVR services can be seamlessly added without the need for an expensive DVR www.tandbergtv.com 5

From TiVo to nPVR TiVo is the service so loved by consumers it was even profiled in “Sex in the City”, but it does have drawbacks: – – – – – You have to remember to program it Only so many tuners Only so much storage Prone to failure (spinning memory) Cost Network Personal Video Recorder (nPVR) emulates a DVR and solves most of these problems. TWC pioneered an effort to obtain programming rights successfully with their “Start Over” service. www.tandbergtv.com 6

From TV to TV, PC and mobile devices For subscribers who had graduated college by 2005, PC is seen as an additional way to view video programming. For those younger, it is seen as a replacement! Comcast and TWC are starting to realize that their emerging new competitors are iTunes, NetFlix, and Blockbuster. Mobile video is the latest craze in Asia, and will likely spread in Europe and America. It is dependent on deployment of next generation wireless protocols (e.g. WiMax and LTE). www.tandbergtv.com 7

Delivery network bandwidth consequences? At 100% unicast, the network must be able to support concurrent sessions to every active device at peak busy hour. By segmenting the network into smaller service groups (typically 250 homes-passed or less), this is eminently achievable. For example, using HD MPEG-4 AVC at 8 Mbps, and 50% peak-usage: 250 * 80% penetration * 1.7 STBs/home * 50% * 8 Mbps 1360 Mbps 36 * 6 MHz channels @ 38 Mbps per channel 216 MHz of downstream capacity. www.tandbergtv.com 8

Analog Longevity and Dual Must-Carry Under the FCC’s report and order, Cable Operators will be required from Feb 18 2009 to Feb 17 2012 to: – Carry a local broadcaster’s digital signal in analog and digital formats; or, – Carry the signal only in digital format, provided that all subscribers have the “necessary equipment” (digital set-top boxes) to view the broadcast content. – Carry the high-definition signal of broadcasters in high-definition format. But this is “only” signals from local broadcasters; there is no legal obstacle to migration of cable programming to all-digital. www.tandbergtv.com 9

Historical Peak Modem Throughput Trends* Bandwidth (bps) 100G The Era of Cable Modems 10G The Era of Wideband Cable Modems ? The Era of Dial-Up Modems 1G 100M 10 Gbps 1 Gbps 100 Mbps 50 Mbps 12 Mbps 10M 100 Gbps ? 10 Mbps 1 Mbps 5 Mbps 1 Mbps Peak Modem Throughput (bps) 256 Kbps 100 Kbps 512 Kbps 56 Kbps 100K 28 Kbps 128 Kbps 90 Kbps 33 Kbps 9.6 Kbps 30 Kbps 10K 14.4 Kbps 1.2 Kbps Average per-sub bandwidth 2.4 Kbps 1K 1M 100 300 bps 10 * with thanks to Tom Cloonan, ARRIS 1 1982 1986 www.tandbergtv.com 1990 1994 1998 2002 10 2006 2010 2014 2016 Year

Trend Predicts 200 Mbps Modems in 2016* Bandwidth (bps) Constant Increase 1.4835x every year 100G 10G The Era of Cable Modems The Era of Wideband Cable Modems 10 Gbps 1 Gbps The Era of Dial-Up Modems 1G 100M 100 Gbps 200 Mbps 50 Mbps 12 Mbps 10M 11 Mbps 1 Mbps 5 Mbps 1 Mbps Peak Modem Throughput (bps) 256 Kbps 100 Kbps 512 Kbps 56 Kbps 100K 28 Kbps 128 Kbps 90 Kbps 33 Kbps 9.6 Kbps 30 Kbps 10K 14.4 Kbps 1.2 Kbps Average per-sub bandwidth 2.4 Kbps 1K 1M 100 will increase by a factor of 100 over the next 8 years! 300 bps 10 * with thanks to Tom Cloonan, ARRIS 1 1982 1986 www.tandbergtv.com 1990 1994 1998 2002 11 2006 2010 2014 2016 Year

Comparison of DOCSIS Bandwidth Per Fiber Node (over time)* Year 2008 Year 2016 Change Homes Passed per Fiber Node 1024 256 x0.25 DOCSIS Take-rate 30% 40% X1.33 # DOCSIS subs/Fiber Node 308 102 x0.33 Average Per-Sub DOCSIS DS BW 100 Kbps 11 Mbps x110 VoIP Take-rate 15% 25% X1.67 # 150-Kbps VoIP subs/Fiber Node 154 64 x0.42 Offered Erlangs/Fiber Node w/ 14% utilization 22 9 x0.41 VoIP DS BW for P(B) 0.5% 5.1 Mbps 2.7 Mbps x0.53 DOCSIS DS BW/Fiber Node 36 Mbps 1.125 Gbps x31 # DOCSIS QAMs/Fiber Node 1 QAM 26 QAMs x26 Average Per-Sub DOCSIS US BW 44 Kbps 4.8 Mbps x109 DOCSIS US BW/Fiber Node 14 Mbps 480 Mbps x34 * with thanks to Tom Cloonan, ARRIS www.tandbergtv.com 12

Summary We are seeing a compounding of trends: 1. From 2. From 3. From 4. From One-way to Two-way Broadcast to Unicast TiVo to nPVR TV to TV, PC, and mobile devices Delivery network consequences are manageable with today’s technology www.tandbergtv.com 16

Thank You Questions? ------------Thank You! www.tandbergtv.com 17