U.S. Digital Plans Switch to MPEG-4

Apr 10, 2006  •  Post A Comment

Pay TV service U.S. Digital Television is expected to announce today it will begin using MPEG-4 video compression technology, enabling the company to expand its product offering to include video-on-demand services and special channel packages aimed at specific demographics.

The Salt Lake City-based company said it will roll out the MPEG-4 service beginning this summer and will offer at no charge a device that enables current customers (who currently use MPEG-2 video compression technology) to pick up the MPEG-4 video feeds on their existing set-top boxes.

The rollout of the new video compression technology coincides with USDTV’s plan to introduce a form of video-on-demand later this year. The service will work similarly to the VOD system employed by satellite operators, in which video is streamed to the set-top box and stored on a disk drive for playback later.

Double the Channels

MPEG-4 technology enables video to be compressed into bits of data that require even less bandwidth than much of the digital video delivered to television sets today. In the high-definition realm MPEG-4 is expected to enable a video provider to deliver twice the number of channels than have been possible with its predecessor, MPEG-2.

Steve Lindsley, USDTV’s CEO, said in an interview that the new MPEG-4 technology will enable his company to offer a more robust array of channels, though he declined to say which channels or how many would be added. He also refused to provide details on the VOD offering.

What he did say is that the new technology will allow USDTV to explore creating packages of channels aimed at specific audiences, such as Hispanics or Asians. The packages would be made available in markets where demographics indicate that such a move makes sense.

“Our programming strategy for USDTV is not to try to outcable cable,” he said. “We are watching what is working with the incumbents [pay TV providers] in niche programming, and we are taking what is successful and matching it with our demographics.”

Founded in 2003, USDTV bills itself as a low-cost all-digital alternative to cable and satellite, offering an average of 30 channels-including 12 popular cable networks-plus local broadcast stations, via digital broadcast signals. Consumers buy a set-top box from one of USDTV’s retail partners and pay a monthly fee of $19.95. High-definition channels are available at no additional cost.

Launched in November, USDTV’s service is available in Albuquerque, N.M.; Dallas; Las Vegas; and Salt Lake City, and the company said it is signing up hundreds of new customers a day, many of whom have never received cable or satellite service or feel they are paying too much and getting more channels than they want from cable or satellite.

Mr. Lindsley said the addition of the MPEG-4 technology also will benefit the company’s broadcasting partners by freeing up bandwidth on their digital spectrum for other uses.

“What we offer broadcasters allows them to embrace what they want to do with their network, which is very important,” Mr. Lindsley said.