Optimum Lightpath Extends its Game to End-to-End Managed Video Transport

| Aug 20, 2008 | Business Network Services - U.S. | Competitive Update

| Analyst: Brian Washburn

Current Perspective: Positive
Vendor Importance: Moderate
Market Impact: Moderate

Event Summary

August 19, 2008 - Optimum Lightpath introduces Lightpath Managed Video service, which provides connectivity and digital video encoding/decoding. The service addresses the needs of the media sector doing business inside the carrier’s greater New York City area footprint. Lightpath Managed Video is an addition to the carrier’s Video Services Portfolio, which also includes Lightpath Video Transport. The service supports ASI and multiple ASI feeds, SD-SDI and HD-SDI, and redundancy and protection options over Optimum Lightpath’s carrier Ethernet network.

Analytical Summary

• Current Perspective: Positive on Optimum Lightpath’s launching of the Managed Video Transport service, because many companies in the video industry do not see managing the process of protocol conversion, encapsulation and transport as part of their core business. Optimum Lightpath has a high amount of fiber connectivity reaching studios, production facilities, broadcasters, television stations, video distributors and of course cable head ends: Adding a managed video service to its video transport service helps ensure that the company is not leaving money on the table.

• Vendor Importance: Moderate to Optimum Lightpath, because the carrier had received numerous requests from companies in the video industry to extend the Broadcast Video Transport product it initially launched in 2007 (see “Optimum Lightpath Rolls Out Broadcast Video Transport over Ethernet in the NYC Metro Area,“ August 30, 2007). Managed Video Transport gives the carrier’s sales force a value-add to up-sell existing video transport customers to a higher margin product, and an opportunity to return to customer prospects with a more comprehensive video package, capable of delivering end-to-end service even if some terminations are out-of-region.

• Market Impact: Moderate to competing video transport providers because Optimum Lightpath’s strength lies in its extended New York City metro area: The carrier can deliver managed video out-of-region, but loses competitive advantages for out-of-region key video production markets such as southern California. But Optimum Lightpath has a strong in-region video industry in its footprint, and may be able to generate momentum in the vertical to win over companies using high-speed terrestrial and even satellite video transport for point-to-point and limited multipoint feeds.

Recommended Competitor Actions

• Instead of positioning SONET against Optimum Lightpath, Verizon should stress its own comprehensive carrier Ethernet portfolio, which sports a broader range of options. Verizon Telecom can come to the table with dedicated service (EPL and EVPL), network-layer metro Ethernet (E-LAN), transport- and network-layer Ethernet on WDM (Integrated Optical Service), and long-haul transport, packetized transport and network-layer Ethernet services (EPL, VPWS and VPLS). Verizon can describe Optimum Lightpath as a one-trick pony.

• Level 3 should point customers towards its established and successful Vyvx portfolio of IP video transport services, which are available across the carrier’s footprint covering the U.S. and extending into Canada, Europe and Asia. Level 3 can position its Vyvx portfolio as more mature and feature-rich: The carrier offers fiber-based connectivity, hookups to physical and virtual teleport facilities, and offers specialty services for connecting its Vyvx customers to sports venues.

• All companies in the long-haul IP video transport business should look toward Optimum Lightpath’s Broadcast Video Transport and Managed Video Transport as a potential service partner rather than an outright competitor. The carrier has developed services with relatively straightforward connectivity, flexible interface options and network reliability. If potential partners can add wholesale discounts and reasonable SLA guarantees from Optimum Lightpath, it makes sense to subcontract out local video transport to the provider.

• If they are not already using the platform, video transport companies should take a serious second look at the T-VIPS codec chosen by Optimum Lightpath for its Managed Video Transport service. As part of Cablevision, Optimum Lightpath brings strong credibility into video transport services, and it makes sense for video transport providers to get the gear into their own labs to put through the paces, and possibly certify for use.

CLIENTS ONLY

Competitive Positives and Concerns

Recommended Vendor Actions

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