Switched Digital Video SDV Overview Robert Kidd Subscriber

Switched Digital Video Business Drivers and Viewership Dynamics Cisco Days SDV © 2006 Cisco

Why Switched Digital Video? § Powerful bandwidth management tool Decouples bandwidth from offered content § Works on existing MPEG-based set-tops Fully supported on existing S-A set-tops § Enables new programming offerings Premium, ethnic tiers – enables “the long tail” § Transparent to consumers More choice - no change in viewing experience § Improves visibility to consumer demand Provides detailed viewership data Can be used to enhance targeted advertising § A key component of Next Generation Networks Cisco Days SDV © 2006 Cisco Systems, Inc. All rights reserved. Cisco Confidential 3

HDTV is penetrating the mainstream market § HD programming is expanding 14 -18 HD channels in most major markets today Direc. TV by 2007 will offer 150 national channels in HD and 1, 500 local broadcasts Dish adding 7 new HD channels on February 1, totaling 25 HD channels More niche networks launching HD (MTV just launched; HGTV and Food Network launching HD programming by mid’ 06) § Consumer purchase of HD televisions on the rise Roughly 40% of U. S. homes to have 1 or more HD televisions by end of 2007 Prices of HDTV sets continue to decline Cisco Days SDV © 2006 Cisco Systems, Inc. All rights reserved. Cisco Confidential HH Income of HDTV owners Source: Forrester's Consumer Technographics ™ Q 2 2005 North American Survey 4

Example: Direc. TV has suggested that “niche” content is helping to drive their growth § “…our PARA TODOS product added 120, 000 net subscribers in the quarter…” § “We now have 700, 000 subs in the PARA TODOS package, that is double where we were at the beginning of ’ 04. ” Source: May 2, 2005 DTV – Q 1 2005 The Direc. TV Group, Inc. Earnings Conference Call Cisco Days SDV © 2006 Cisco Systems, Inc. All rights reserved. Cisco Confidential 5

Another niche experience: Dish Networks now offers extensive international programming options Armenian Arabic African ABN America - $14. 99/mo. 15 channels - $39. 99/mo. Al Jazeera 1 channel - $14. 99/mo. 6 channels - $36. 99/mo. Portuguese Polish 4 channels - $38. 99/mo. Armenia TV - $14. 99/mo. 17 channels - $29. 99/mo. Farsi French 3 channels - $32. 99/mo. 3 A Telesud - $14. 99/mo. Kuwait TV Greek German Chinese TV Globo - $19. 99/mo. Israeli Network - $19. 99/mo. Russian 2 channels - $24. 99/mo. Italian 2 channels - $12. 99/mo. South Asian 6 channels - $49. 99/mo. Japanese TV Japan - $25. 00/mo. Tagalog 1 channel - $14. 99/mo. Korean 4 channels - $36. 99/mo. Urdu 3 channels - $34. 99/mo. The high price of these offerings demonstrates the value to niche consumers. Cisco Days SDV © 2006 Cisco Systems, Inc. All rights reserved. Cisco Confidential 6

SDV Drives a Paradigm Shift in Bandwidth Management Current Analog & Digital Broadcast Approach Typical Viewership at a node >30 Viewers Next 30 Next 10 5 -10 Viewers 1 -5 Viewers Next 200+ < 1 Viewer Audience Top 4 Unused Capacity Only the most popular channels are offered due to capacity constraints Broadcast Channels “The Long Tail” Switched Digital Video Within any service group, NOT every channel is watched all the time Cisco Days SDV © 2006 Cisco Systems, Inc. All rights reserved. Cisco Confidential Switched Channels Broadcast Channels Everyone could get their own special channels: increased appeal of overall package to ALL subscribers 7

Switched Digital Video Will Enable Cable Sites to Deliver More Content Than Ever Before, While Using Existing Hardware Today’s Broadcast System Headend Service Group All Programs Are Broadcast to All Subscribers All the Time Service Group Programs Are Transmitted to a Service Group Only When a Subscriber in That Group Is Actively Watching Them Hub Our Switched Digital Video (SDV) System Hub Headend SDV Sends Programs to Subscribers Only in Areas Where Programs Are Being Requested in Real-Time Cisco Days SDV © 2006 Cisco Systems, Inc. All rights reserved. Cisco Confidential 8

Potential Bandwidth Gains with SDV Traditional Broadcast with Statistical Mux Bandwidth scales as number of channels offered HFC bandwidth required is independent of number of offered channels Immediate bandwidth savings 300 200 Switched Digital Video 300+ 25 QAMs 17 QAMs 200 n QAMs 6 -8 QAMs Programs Offered HFC Bandwidth Required HFC bandwidth scales based on viewership Programs Offered HFC Bandwidth Required MSOs can save bandwidth by delivering programs based on viewership Cisco Days SDV © 2006 Cisco Systems, Inc. All rights reserved. Cisco Confidential 9

Viewership Ranking Cisco Days SDV © 2006 Cisco Systems, Inc. All rights reserved. Cisco

Peak Usage Over Time - Saturday Service Group GC 10 - 1108 Tuner Cisco

Peak Usage vs. Service Group Size Cisco Days SDV © 2006 Cisco Systems, Inc.

SDV Gain vs. Offered Programs Cisco Days SDV © 2006 Cisco Systems, Inc. All

Switched Digital Video An Open Architecture Cisco Days SDV © 2006 Cisco Systems, Inc.

SA Switched Digital Video Status § History TWC re-engaged on IP-based approach – late ‘ 04 TWC Issued RFP for IP-based architecture - in April ‘ 05 Cross-vendor “tweaks” to spec completed - April-July ‘ 05 Specifications and open protocols published – July ’ 05 Functional end-to-end system in S-A lab – October ’ 05 § Status SA first to market with the TWC “Phase II” SDV solution TWC Albany – Multiple hubs provisioned, deploy to friendlies this week TWC Oceanic – Design complete, switching on test hub in the headend TWC Rochester – Design in process SR 4. 2 beta code installed at multiple TW sites and at other MSOs SDV Production Installations and Beta Trials also underway at other MSOs Cisco Days SDV © 2006 Cisco Systems, Inc. All rights reserved. Cisco Confidential 15

Open IP Architecture for Switched Digital Video All interfaces are open and published SDV Manager Separates server from switch Management & Provisioning Control IP Network Master SRM QPSK Server Interactive Session Request Channel Change Message Enables QAM Sharing Bulk Encryptor Encrypted Multicast Video VOD Pump Content Sources Video Sources Staging Processor Groomed Video Open Interface Specification Management Video Content Cisco Days SDV Server © 2006 Cisco Systems, Inc. All rights reserved. Cisco Confidential Mini Carousel Video Content IP Network Shell Session Setup Out-of-Band Channel HFC Network Settop with SDV Client Session Binding In-Band Channel IGMP Join Edge QAM • Based on IP Multicast • Separates switch from QAM 16

SDV Equipment Typical Rack Elevation Cisco Days SDV © 2006 Cisco Systems, Inc. All

SDV / VOD Session Setup Messages SDV Manager -5) DNCS sends Source. IDs, multicast addresses, bit rates to SDV Manager -4) Provision SDV Servers -3) Give me 36 x 625 kb/s sessions DNCS w/ App-Independent DNCS 4. 2 Session and Master SRM Resource Manager (SRM) 3) Send VOD “Movie” to GQAM X Server. Interactive. Sess. Request/response SDV Server -1) Take session. IDs 1 -36 on GQAM X 1) Buy VOD “Movie” -5) set up multicast CF sessions on Netcrypt 2) Mini Carousel -2) R “sh ese ell rve se ses ss ion sion 2) s” IDs Re for 1 se SD 36 rv V e 3 7 f or VO D 0) Channel change to SDV ch 8 (HD) 2) Tune to GQAM X 1) Use sess. ID 12 for HD-SDV ch 8 incl: actual bit rate and multicast addresses 4) SDV ch 8 VOD Pump 6) “Movie” 4) “Movie” 5) “Movie” Cisco Days SDV “Movie” 2) Join multicast for SDV ch 8 DCM Staging Processor -6) set up CBR SPTS IP unicasts to Netcrypt 37 3) SDV ch 8 (HD) Headend © 2006 Cisco Systems, Inc. All rights reserved. Cisco Confidential Hub 12 SDV ch 8 (HD) GQAM 18

QAM Sharing Available Capacity For BW Request § Better utilization of QAM resources Available Capacity For BW Request § Lower probability of blocking with less combined overhead Lower Blocking Probability § Better network resiliency with larger QAM pool § Planning by aggregate demand Improved Service Availability X Cisco Days SDV © 2006 Cisco Systems, Inc. All rights reserved. Cisco Confidential § No stranded capital 19

QAM Carriers Required With and Without QAM Sharing Cisco Days SDV © 2006 Cisco

SDV Network Redundancy § N: 1 Server Backup Up to 8 servers backed up by a single server for high availability and hitless upgrades § IGMPv 3 Source Specific Multicast (SSM) Redundancy of network attached devices (Netcrypt, encoders, and DCM) § Mini-carousel Provides in-band tuning information in cases where out-ofband communication fails Cisco Days SDV © 2006 Cisco Systems, Inc. All rights reserved. Cisco Confidential 21

1: n Redundancy SDV Server Redundancy State Data 1 Database Synchronization Protocol - Database transfer - Change of state indications - Heartbeat State Data Primary Server 1 State Data 2 Primary Server 2. . . . Standby Server State Data n Primary Server n Cisco Days SDV © 2006 Cisco Systems, Inc. All rights reserved. Cisco Confidential 22

Source Redundancy Using IGMPv 3 Source Specific Multicast (SSM) Source 1 S Mu ourc ltic e 1 as t. X 1) Nominal Source 2 Router Source 1 Multicast X e 2 urc ast X o S ltic Mu GQAM Program X Pgm Check Pgm X OK Source 1 Router 2) Fault Source 2 2 rce st X u So ltica Mu GQAM Join Source 2 for Program X Pgm Check Pgm X BAD Source 1 Router 3) Recovery Source 2 Cisco Days SDV © 2006 Cisco Systems, Inc. All rights reserved. 2 rce st X u So ltica Mu Cisco Confidential Source 2 Multicast X GQAM Program X Pgm Check Pgm X OK 23

Mini Carousel § SDV Server: Updates mini carousel dynamically Sends mini carousel to SDV client over IP multicast Multicasts mini carousel update even if reverse path is impaired or congested § SDV Client: Checks mini carousel to see if channel is available Alternative, fast tuning mechanism if channel is already available on switched tier Ability to tune available channel even if reverse path is impaired or congested Mini Carousel provides resiliency in the event of a reverse path outage or congestion Cisco Days SDV © 2006 Cisco Systems, Inc. All rights reserved. Cisco Confidential 24

SDV Session Resiliency § Bandwidth Reservation Prevents fragmentation of bandwidth across multiple carriers § Bandwidth Reclamation of Idle Sessions User-defined timeouts for marking available sessions § QAM Re-assignment Sessions on failed QAMs will be re-assigned based on active viewers Cisco Days SDV © 2006 Cisco Systems, Inc. All rights reserved. Cisco Confidential 25

Bandwidth Management and Resource Reservation • Session and Resource Manager (SRM) must manage QAM bandwidth intelligently to reserve enough contiguous BW for HD In the example below*, all QAMs in the service group are filled to a point where there is more than enough total bandwidth available for the requested HD stream, but no single QAM has enough contiguous bandwidth. HD stream Blocked! HD Requested Streams: SD Bandwidth available for SD stream * Note: Any bandwidth can be requested. Standard Definition (SD) and High Definition (HD) are shown in the example only for simplicity. Cisco Days SDV © 2006 Cisco Systems, Inc. All rights reserved. QAM 1 Cisco Confidential QAM 2 QAM 3 QAM 4 Narrowcast Modulators feeding one Service Group 26

Bandwidth Management and Resource Reservation § As SRM begins to fill QAMs in a Service Group, it load balances among the QAMs… QAM 1 QAM 2 QAM 3 QAM 4 § § QAM 1 QAM 2 QAM 3 QAM 4 As sessions come and go… if load is high, it will fill the most full QAMs in order to preserve contiguous bandwidth. QAM 1 QAM 2 QAM 3 QAM 4 § QAM 1 QAM 2 QAM 3 QAM 4 After all QAMs are filled to the point where the largest bandwidth (e. g. HD) would just fit, it then begins to fill QAMs one by one. It attempts to always maintain available contiguous bandwidth for the biggest streams. It fills QAM 1 first. . . …then QAM 2… …and so on. QAM 1 QAM 2 QAM 3 QAM 4 § § QAM 1 QAM 2 QAM 3 QAM 4 If load is light, it will revert to balancing the load. QAM 1 QAM 2 QAM 3 QAM 4 Cisco Days SDV © 2006 Cisco Systems, Inc. All rights reserved. QAM 1 QAM 2 QAM 3 QAM 4 Cisco Confidential QAM 1 QAM 2 QAM 3 QAM 4 27

QAM Re-Assignment • SDV Server is capable of re-mapping SDV sessions from a failed GQAM to an active GQAM feeding the same service group. QAMs are load-balanced in light load conditions to minimize impact of outage Availability improves with additional VOD/SDV carriers allocated Priority is given to the streams with the most users Cisco Days SDV © 2006 Cisco Systems, Inc. All rights reserved. Cisco Confidential 28

S-A Architecture Highlights S-A / Cisco Benefits Phase 2 Architecture Tested Open architecture based on IP Multicast protocols and open interfaces to the QAM, Server, SDV Manager, and Client QAM Sharing SDV and VOD sessions can share bandwidth, requiring less RF spectrum and equipment Integrated Client Faster boot times, rapid Mini-carousel autodiscovery, and full visibility to all channel changes Bulk Encryption Netcrypt support in DNCS 4. 2 eliminates need to modulate/demodulate IGMPv 3 SSM Provides standards-based network and source redundancy Multi-CBR and HD support Flexibility to optimize bandwidth utilization and ability to offer new HD content on SDV tier Cisco Days SDV © 2006 Cisco Systems, Inc. All rights reserved. Cisco Confidential 29

S-A Feature Highlights S-A / Cisco Benefits Single Management System SDV Manager provisions SDV servers and Netcrypt from DNCS 4. 2 Server Redundancy N: 1 Auto Backup minimizes down-time during failure or maintenance SDV Session Re-assignment Provides session resiliency in event of a QAM failure GQAM support Leverage installed GQAMs which are Phase 2 compatible with no need to upgrade hardware Netcrypt not required in shared VOD/SDV environment since session based encryption is accomplished in the GQAM Integrated VOD Encryption Cisco Days SDV © 2006 Cisco Systems, Inc. All rights reserved. Cisco Confidential 30