Can Cable Stay Competetive?

As new HD networks launch, satellite companies add new birds and FIOS continues its slow roll-out, cable faces a severe challenge in the race to remain competetive in its HD offerings. Barring expensive system upgrades, how can they get more out of their existing bandwidth?

Most of the discussion we see online relies on simply getting rid of analog. But gains are going to be limited in the short term; Comcast, for one, plans to keep 20-40 analog channels around until at least 2011. And there are plenty of other uses (see below) for any bandwidth that's actually freed up.

Which is why it's necessary to consider other options. This very detailed article from CED magazine (which I found via this AVS post by John Mason) examines several. If you look at the graph near the top of the page, you can see the dilemma; even though analog will decline through 2010, projected HD expansion combined with proprtionally greater expansion in VOD, data and phone will result in the need for overall downstream bandwidth to go from 100-150 6mz channels today to over 200 in 2010.

Reading the article, it seems like the most promising strategies are a more-efficient codec (MPEG-4) and "switched broadcast", which replaces the everything-down-one-pipe model with one where only the subscriber-tuned digital channels (this doesn't affect analog, alas) are carried.

And if I'd gotten myself together and finished this post like I promised myself last night, the story might have ended here. But this morning, I noticed (via Swann) this USA TODAY article that points out the incompatability of CableCard with switched broadcast (which they refer to as "switched digital"). Hooray for laziness!

HD Beat's commentary this afternoon theorizes that this explains why CableCard 1.0 hasn't taken off. If so, the damage may be less than USA TODAY may think, but any delay while this is figured out can only give the "channel gap" a chance to open wider in favor of cable's competitors.