FTTH Con: Start-up opportunities abound in triple-play

ORLANDO--The battle between telcos and cable operators to bring triple-play services to consumers is creating a variety of opportunities for start-up companies, according to Jim Jones, managing director of Scale Ventures, a venture capital firm. At the Fiber-to-the-Home Conference this week, Jones identified a few challenges among triple-play providers that could spell opportunity for start-ups able to solve them.

In general, start-ups can attract attention by promising to cut the in-home costs of fiber deployment. Though discussions of fiber-to-the-x costs typically focus on getting fiber to the side of the home, in-home costs can add more than $500 per home to that equation, Jones said. Start-ups that can ease those expenses, through home networking, storage consolidation and consumer electronics such as set-top boxes, will have investors’ ears. As an example, Jones cited Entone Technologies’ ability to distribute high-definition video signals to multiple television sets throughout the home as a rare and valuable capability.

There’s also money to be made enabling what Jones called “the three screens challenge”--allowing users to access the same content seamlessly from their TVs, PCs and mobile devices. Start-ups that can convert content into all formats will easily get an audience in the VC world, as will those addressing the home networking, billing, subscriber management and user interface aspects of three-screen services, he said.

There’s also a need for vendors that can ease the transition from standard-definition video to high definition--converting formats, expanding bandwidth and efficiently distributing content.

Likewise, VCs are looking for vendors that can help carriers increase average revenue per subscriber, whether though ad insertion, on-demand offerings or otherwise. For example, investors have an eye out for technology that would better allow service providers to use customer information--including TV-viewing preferences and Web surfing behavior--to sell more targets ads.

“For U.S. telcos, that could add $3 to $5 per subscriber per month, at very high margins,” Jones said.