Evolution Broadband Abandons tru2way in Favor of TiVo

--Says Economics of tru2way "Simply Don't Add Up" for Tier-Two and Tier-Three Operators

Evolution Broadband, a reseller of digital equipment to independent cable operators, has abandoned a strategy based on tru2way headends and set-top boxes because the economics "simply don't add up" for tier-two and tier-three operators, according to a new article by Jeff Baumgartner of Cable Digital News. The company told Baumgartner that it now believes that broadband-connected HD DVR's from TiVo are a more cost-effective alternative than tru2way for smaller operators looking to launch advanced interactive TV services, even though it had lined up a number of overseas set-top box manufacturers to supply it with tru2way boxes. "Unless something changes dramatically, in terms of the economics and willingness of those that provide the hardware and software to accommodate the needs of a smaller system, we don't anticipate investing much more in tru2way," Brent Smith, president of Evolution's digital arm, stated in an interview. "As it stands today, everything we've investigated suggests there isn't an economic solution to offer tru2way in markets below the urban centers."

According to Evolution's Smith, headend hardware expenses for tru2way easily exceed $100,000, including the OCAP playout server, the common download server, the administration console, and the EPG application server. In addition, he stated, operators have to ensure that their cable modem termination systems (CMTS) are capable of supporting the DOCSIS Set-Top Gateway (DSG) for the data communications path to the tru2way set-top; and must also take into account annual software support agreements for tru2way, as well as premium costs associated with the tru2way version of an EPG.

Smith told Baumgartner that Evolution plans to use TiVo boxes' broadband connections to deliver interactive TV widgets and other applications, as well as VOD content from TiVo's various content partners. This, he believes, represents a more practical solution than "something that is purpose-built for the cable industry."

The full text of Baumgartner's article, which also touches on other companies that have suspended plans to implement tru2way, as well as on the options currently available to smaller operators that do want to implement the technology, can be found here.

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