Instead of users recording anything to hard-disk and requiring umpteen tuners to do so, the cable broadcaster always has every programme ever shown available via VoD and when the user makes a "recording" all they are doing is effectively bookmarking a VoD programme on the cable server to be viewed at a later date.
For the broadcaster it would mean they could supply cheaper set-top boxes with a single tuner (for live programmes) and without any hard-disk at all... but it does mean they'd have to store shed loads of content on their own servers, and VoD usage would go through the roof.
As for the broadcasters, what difference is it to normal VoD? If they're concerned about re-transmissions, perhaps the content should only be made available for re-transmission to those who "bookmarked" the recording in the first place (ie. those who would have recorded the showing to their own hard-disk with a traditional PVR setup).
Although it would be nice to make it available for those who didn't remember to bookmark it - "never miss a programme again, even when you have..."
This was done years back in the USA for a trial (way back before PVR's), it was extremely successful - but FAR too expensive to be viable.
It's much cheaper, and more versatile, to simply have a local HDD in a PVR.
Instead of users recording anything to hard-disk and requiring umpteen tuners to do so, the cable broadcaster always has every programme ever shown available via VoD and when the user makes a "recording" all they are doing is effectively bookmarking a VoD programme on the cable server to be viewed at a later date.
For the broadcaster it would mean they could supply cheaper set-top boxes with a single tuner (for live programmes) and without any hard-disk at all... but it does mean they'd have to store shed loads of content on their own servers, and VoD usage would go through the roof.
As for the broadcasters, what difference is it to normal VoD? If they're concerned about re-transmissions, perhaps the content should only be made available for re-transmission to those who "bookmarked" the recording in the first place (ie. those who would have recorded the showing to their own hard-disk with a traditional PVR setup).
Although it would be nice to make it available for those who didn't remember to bookmark it - "never miss a programme again, even when you have..."
I'm sure I've read a post somewhere on DS about how a UK broadcaster could charge a platform extra every time a programme is distributed by a Cloud VOD system, because it would be considered an re-broadcast of that programme, or something like that.
And didn't the US company that tried this idea get sued?
Read the article in the link provided by Chris123 - the broadcasters lost, the judge threw out their appeal.
Eventually I would expect VoD to cover all programmes broadcast, at which point surely this idea becomes more viable.
Perhaps VoD content will only remain available for a period of a month or two (otherwise storage requirements will be ridiculous), in which case a hybrid solution might be quite interesting - to use a "bookmark" to content that is on the cable company server, and to then automatically copy down the content to the local hard-disk just before bookmarked content expires (replacing the bookmark) if the bookmark hasn't been deleted.
Read the article in the link provided by Chris123 - the broadcasters lost, the judge threw out their appeal.
Eventually I would expect VoD to cover all programmes broadcast, at which point surely this idea becomes more viable.
Perhaps VoD content will only remain available for a period of a month or two (otherwise storage requirements will be ridiculous), in which case a hybrid solution might be quite interesting - to use a "bookmark" to content that is on the cable company server, and to then automatically copy down the content to the local hard-disk just before bookmarked content expires (replacing the bookmark) if the bookmark hasn't been deleted.
I can't see VM doing that anytime soon. They would be focusing on TiVo rollout for a while and they would (should?) convert their HD from MPEG 2 to MPEG 4 to reduce bandwidth whenever someone wants to watch a HD 'recording'.
Besides, I wouldn't accept any system which would only allow me to kept a recording with some pre-defined expiry date. It would work better as an extended Catch-Up VOD service, minus the 'copy to local HD' option.
I can't see VM doing that anytime soon. They would be focusing on TiVo rollout for a while and they would (should?) convert their HD from MPEG 2 to MPEG 4 to reduce bandwidth whenever someone wants to watch a HD 'recording'.
Of course - this is several years down the road.
The remote record facility would be another feather in VMs cap though, as the bandwidth requirements would probably cripple Sky over ADSL, whereas VM have their dedicated VoD link.
Besides, I wouldn't accept any system which would only allow me to kept a recording with some pre-defined expiry date. It would work better as an extended Catch-Up VOD service.
Actually, that's how TiVo works... all recordings have an expiry date ("keep until" date) and become candidates for deletion as you run out of disk space and make new recordings.
Personally if the viewing experience is the same for both VoD content streams and locally stored content, and your set-top-box automatically caches a local copy once the VoD content expires, then I don't see the problem of local vs. remote storage.
This was done years back in the USA for a trial (way back before PVR's), it was extremely successful - but FAR too expensive to be viable.
It's much cheaper, and more versatile, to simply have a local HDD in a PVR.
I remember reading that it was cheaper for the cable provider to provide remote PVR than a local PVR as it removed a number of faults and maintenance issues in the customers homes - faults and maintenance would be done on site at the cable headend.
With VM the current v+ and new Tivo will only be able to record two shows at once, remote PVR could allow many more.
Following a software upgrade the whole VM customer base would have access to recording facilities without the need for engineer visits and customer upgrades.
Also remember reading that the customer has to actively set a programme to be remotely recorded and for each customer the programme has to be separately recorded - a programme couldn't be recorded once for all customers who recorded it access to it.
Although a few downsides would be the longterm storage of shows, the skipping of adverts, and the quality of the recorded show.
Can see this happening eventually as it provides VM with a number of additional revenue streams and would reduce longterm costs.
Actually, that's how TiVo works... all recordings have an expiry date ("keep until" date) and become candidates for deletion as you run out of disk space and make new recordings.
According to the Tivo Premiere manual, there's an option to keep recording until deleted.
I think the recordings you're referring to are the ones made from recommendations, they have the lowest priority and are wiped to make room for the higher priority series links/manual recordings.
Personally if the viewing experience is the same for both VoD content streams and locally stored content, and your set-top-box automatically caches a local copy once the VoD content expires, then I don't see the problem of local vs. remote storage.
What if there's not enough local capacity room for the copy from remote storage? Could be an issue especially if HD recordings.
I think the recordings you're referring to are the ones made from recommendations, they have the lowest priority and are wiped to make room for the higher priority series links/manual recordings.
Yes, that's another feature of the deletion system - recordings from suggestions are always the first to be deleted before any recordings scheduled by the user, as you suggest they have the lowest priority.
First to go are suggestions (if you have any - the suggestions system can be turned off), then recordings with keep-until dates.
What if there's not enough local capacity room for the copy from remote storage? Could be an issue especially if HD recordings.
One solution would be that the "size" of each bookmark on disk is the same size as the corresponding remote storage based on the assumption that it will eventually be cached locally, in which case there'd be no difference in terms of the capacity problems with how PVRs work today.
However if bookmarks take up virtually no space - in the expectation that most viewers will watch bookmarks via VoD rather than locally cached copy - this would leave much more space on the hard-disk for any content that does become a locally cached copy.
If you then run out of disk space the system should delete the oldest locally stored programme (which is the default. TiVo method for freeing up space) to make room for the new "recording", or simply fail to "record" the bookmark at all and leave it up to the end user to delete some of their old junk (VM or Sky method? Don't know as I never run out of space on my SkyHD box).
Obviously this is all hypothetical, but the system would be a balance between how long VoD content remains available (longer periods would mean reduced demand for local caches) and how large hard-disks are - if you mostly watch VoD stuff before it expires you actually need only a relatively small hard-disk to store the few programmes you never got around to watching in the months before they expired on VoD.
What should be remembered is that PVR hard-disks are not intended for archival storage.
What should be remembered is that PVR hard-disks are not intended for archival storage.
Says you, I've had stuff on there from over 1 year ago.
The other potential issue (apart from possible legal issues) is the speed of fast-forward/rewind from remote storage (not great now via VOD) and possible blocking of fast-forwarding through adverts, I'm sure Virgin have/are testing this already.
I dunno, I guess I just like total control of my recordings. Full control to zip through adverts at whatever speed I want; no expiry dates; no second-guessing about the local headend 'recording' what I wanted recording.
Says you, I've had stuff on there from over 1 year ago.
So have I (two programmes, both marked as keep until I delete), but when my hard disks fail (as they most certainly will, and I have two in my TiVo) I'll have only myself to blame for losing that content.
And when a user can't record anything because the hard disks are full up with cr@p they've not bothered to watch or archive off to DVDR/whatever, again there is only one person to blame for any inability to record new stuff.
At the end of the day, there is a certain onus on the end user to ensure there is enough free storage space to record new stuff - there's not really a great deal the cable company can do with whatever system they use (VoD, local storage, hybrid, etc.) if the end user doesn't manage their disk space effectively.
The other potential issue (apart from possible legal issues) is the speed of fast-forward/rewind from remote storage (not great now via VOD) and possible blocking of fast-forwarding through adverts, I'm sure Virgin have/are testing this already.
That's why I said "if the viewing experience is the same for both VoD content streams and locally stored content".
If you have to wait several seconds for the stream to buffer, or cannot fast forward at 30x/60x, or through adverts then it's a non-starter as an alternative to always recording to the hard disk.
How can VM get so much money to give these boxes for free as if they wish to make all TV customers have these new boxes in a few years, they will have give them as a replacement as the old box die. Or there have pay extra to send out people to swap boxes.
By the way this was all talked about when " TV Drive " came by Telewest that all there customers would have one in there homes. BUT the cost of joining Telewest & NTL stopped HD and many other plans.
I bet it's that they are getting money from companies with all the images along the the top of the images they have put about and images of the USA.
It's just took Tivo almost a year change to virgin colours and put a logo on screen at what cost ? going by the USA imges of Tivo there.
Also what is going to happen to all the old boxes SD and HD if top post is right ? and at what cost ?
PLUS they have just in 2010 spent money on new box that is just HD with out a hard drive. so they going to make those customers have larger box in there home.
How can VM get so much money to give these boxes for free as if they wish to make all TV customers have these new boxes in a few years, they will have give them as a replacement as the old box die. Or there have pay extra to send out people to swap boxes.
If Virgin decide to do it, it will be done at the companies cost.
How they justify it will likely be down to how much money they can save by only supporting one TV platform which has more up to date technology that the Liberate platform they run at present.
It's just took Tivo almost a year change to virgin colours and put a logo on screen at what cost ?
It was likely a lot more than that. TiVo is designed to work with the US cable system, so wouldn't automatically work with DVB-C (which is a European standard), and other Euro and UK requirements
The colour change was probably the easy bit!
PLUS they have just in 2010 spent money on new box that is just HD with out a hard drive. so they going to make those customers have larger box in there home.
The V HD box is compatible with the TiVo platform so will be retained in some form going forward
Also the VM systems would probably have required a lot of work to get it to work with the TIVO setup whilst maintaining compatibility with the existing boxes.
IIRC they've spent years trying to standardise the whole network, so I suspect they did everything they could to ensure they could do TIVO in parallel to the current software on the whole network.
Not to mention last year was a World Cup year, and VM basically stopped all work that could affect the TV side of the network for the duration (and I suspect all bar the most urgent work to the physical side of it, full stop), to minimise the chances of disruption to footy fans during the biggest event for them (didn't they even pause the rollout of the new smart cards?).
As for justification for a swap to all TIVO capable boxes, from VM's POV it would probably be partly justified by the bandwidth savings. From memory at the moment only the VHD and new TIVO boxes can do mpeg 4 compression, whilst V and V+ boxes use mpeg2, so I suspect once they get rid of the "legacy" boxes off the network they will be able to start swapping fully over to Mpeg4 (or whatever compression the new boxes use - is it mpeg4 or x264?), which will free up a lot of room on the network (much the same as turning off analogue did).
That alone would probably be a very attractive proposition for VM as it'll save a lot of money in network capacity upgrades for other uses (more channels, more VOD streams at any given time, or more space for internet "channels").
Also, if (as i've said before), they do it the way they've done it in the past, much of the costs of the rollout of new boxes will either be met by people impatient to get the new services:p or as part of a general policy of fitting the new boxes for new customers as standard and as replacements for older boxes rather than using refurbs of older boxes.
Even if just say 10% of boxes fail in any given year, that equates to 30% of the boxes being swapped over just from replacements in 3 years, let alone new customers and upgrades. Given that it undoubtably costs a reasonable chunk of change to repair a failed V box, there is a chance the new VHD boxes might be projected to work out cheaper over the space of several years than reusing boxes that are anything up to 10 years old (I wouldn't be surprised if the new VHD boxes are much cheaper than the old V boxes were to buy at the same point in their life, and more reliable*), so they could be betting on savings on engineer callouts and box repairs to offset the cost of the new hardware to an extent.
I get the impression that since the rebrand to VM they've been looking more to the future than NTL/BY did for TV, as for a long time it seemed that TV for NTL/BY was almost an afterthought compared to the internet product, and done "on the cheap", since the rebrand they've done a heck of a lot with the TV, ranging from more channels, to a much improved VOD service..
IIRC NTL or TW tried a much more advanced digital box than the ones they rolled out in the end, but went with the one they did because it was cheaper/easier to get working with the then network, despite the serious technical limitations of the box they chose (although I think, to be fair, that was at the time when they were struggling with the debt much more than now).
*Going by how much things like DVD, Blu-ray and general PC gear seems to have dropped in price, i wouldn't even be surprised to find out that a new VHD box costs VM only a .little more than buying a new V box at the moment (as a decent DVD player can cost £40-50 for say a Toshiba or Phillips, and a reasonable Blu-ray player can be had for <£100 retail). After all both the V and VHD boxes with share many of the same costs, such as the modem (although the chances are the VHD uses a cheaper/more integrated modem chipset). PSU, casing, smart card reader - and some of the parts being changed for better ones are probably cheaper for the newer ones due to more integration (less overall parts),
The network DVR system has been looked at by Virgin (and trialled by Cablevision in the US). The topic was covered in the Q&A session at one of their recent investor days. Virgin will not, for now, be going down this path as rights issues on content currently prevent it being viable, same thing as stopped cablevision.
Virgin have also confirmed their intention to supply differentiated tivo boxes at different price points so as many customers as possible can afford them (e.g. differentiated by hard drive size).
If Virgin decide to do it, it will be done at the companies cost.
How they justify it will likely be down to how much money they can save by only supporting one TV platform which has more up to date technology that the Liberate platform they run at present.
It's got to be done, they messed up by introducing MPEG2 for HD when everyone else had gone for MPEG4 - this is now costing then dearly.
I would imagine the new HDD (non-PVR) boxes are already MPEG4 capable, and the newer V+ boxes presumably are as well.
Initially it won't cost them much, if anything, because they charge for the boxes - so it's self funding. Presumably initially they will only need to replace all the HD boxes, then they can switch their HD channels to MPEG4 - but this is only where Sky have been since day one.
Once that's done they can then see about changing the SD users to new boxes, once that's completed then they can switch the SD channels to MPEG4 as well, giving themselves more bandwidth to play with. Sky have perhaps already started on this course, by dropping SD boxes entirely - but NOT doing anything about all the non-HD boxes out there.
Because VM is far more controlled and structured (as they rent out ALL their boxes), I would imagine they are far more likely to complete it well ahead of Sky.
It's got to be done, they messed up by introducing MPEG2 for HD when everyone else had gone for MPEG4 - this is now costing then dearly.
I would imagine the new HDD (non-PVR) boxes are already MPEG4 capable, and the newer V+ boxes presumably are as well.
Initially it won't cost them much, if anything, because they charge for the boxes - so it's self funding. Presumably initially they will only need to replace all the HD boxes, then they can switch their HD channels to MPEG4 - but this is only where Sky have been since day one.
Once that's done they can then see about changing the SD users to new boxes, once that's completed then they can switch the SD channels to MPEG4 as well, giving themselves more bandwidth to play with. Sky have perhaps already started on this course, by dropping SD boxes entirely - but NOT doing anything about all the non-HD boxes out there.
Because VM is far more controlled and structured (as they rent out ALL their boxes), I would imagine they are far more likely to complete it well ahead of Sky.
The question of mpeg4 vs 2 was also raised at the investor day. They basically said since getting rid of analogue, bandwidth constraints are not an issue for them for quite a while. They plan to roll out more HD channels etc.
MPEG-4 gives a bandwidth saving on HD channels but there isn't much impact for SD channels. NTL were going to release an mpeg-4 box but when the merger happened they decided to stick with the existing telewest TV drive boxes which were already in the field wiht mpeg-2 decoders. mpeg-4 decoders were also a lot more expensive then than they are now.
They can only switch anything to mpeg-4 once ALL V+boxes and V-HD ones are mpeg-4 compatible. If we assume the V-HD ones are already compatible and the samsung V+HDs then there are still hundreds of thousands of SA V+HDs to replace. That would cost millions. What is more likely is their intention to drive the TiVO experience to all their customers over time. Once a certain critical mass is reached and the deployed number of older V+ boxes falls to a smallish number then it would be viable to replace them FOC and then switch to mpeg-4.
But there's lots of other things they could do in the meantime - switch to DVB-C2, use higher QAMs on their channels and drive fibre deeper into their network.
Comments
This was done years back in the USA for a trial (way back before PVR's), it was extremely successful - but FAR too expensive to be viable.
It's much cheaper, and more versatile, to simply have a local HDD in a PVR.
I'm sure I've read a post somewhere on DS about how a UK broadcaster could charge a platform extra every time a programme is distributed by a Cloud VOD system, because it would be considered an re-broadcast of that programme, or something like that.
And didn't the US company that tried this idea get sued?
EDIT: Yep, they did:
http://www.broadbandreports.com/shownews/74805
And they won, eventually:
http://en.wikipedia.org/wiki/Network_DVR
In any case, I'd rather have my recorded content kept locally.
Read the article in the link provided by Chris123 - the broadcasters lost, the judge threw out their appeal.
Eventually I would expect VoD to cover all programmes broadcast, at which point surely this idea becomes more viable.
Perhaps VoD content will only remain available for a period of a month or two (otherwise storage requirements will be ridiculous), in which case a hybrid solution might be quite interesting - to use a "bookmark" to content that is on the cable company server, and to then automatically copy down the content to the local hard-disk just before bookmarked content expires (replacing the bookmark) if the bookmark hasn't been deleted.
I can't see VM doing that anytime soon. They would be focusing on TiVo rollout for a while and they would (should?) convert their HD from MPEG 2 to MPEG 4 to reduce bandwidth whenever someone wants to watch a HD 'recording'.
Besides, I wouldn't accept any system which would only allow me to kept a recording with some pre-defined expiry date. It would work better as an extended Catch-Up VOD service, minus the 'copy to local HD' option.
Of course - this is several years down the road.
The remote record facility would be another feather in VMs cap though, as the bandwidth requirements would probably cripple Sky over ADSL, whereas VM have their dedicated VoD link.
Actually, that's how TiVo works... all recordings have an expiry date ("keep until" date) and become candidates for deletion as you run out of disk space and make new recordings.
Personally if the viewing experience is the same for both VoD content streams and locally stored content, and your set-top-box automatically caches a local copy once the VoD content expires, then I don't see the problem of local vs. remote storage.
I remember reading that it was cheaper for the cable provider to provide remote PVR than a local PVR as it removed a number of faults and maintenance issues in the customers homes - faults and maintenance would be done on site at the cable headend.
With VM the current v+ and new Tivo will only be able to record two shows at once, remote PVR could allow many more.
Following a software upgrade the whole VM customer base would have access to recording facilities without the need for engineer visits and customer upgrades.
Also remember reading that the customer has to actively set a programme to be remotely recorded and for each customer the programme has to be separately recorded - a programme couldn't be recorded once for all customers who recorded it access to it.
Although a few downsides would be the longterm storage of shows, the skipping of adverts, and the quality of the recorded show.
Can see this happening eventually as it provides VM with a number of additional revenue streams and would reduce longterm costs.
According to the Tivo Premiere manual, there's an option to keep recording until deleted.
I think the recordings you're referring to are the ones made from recommendations, they have the lowest priority and are wiped to make room for the higher priority series links/manual recordings.
What if there's not enough local capacity room for the copy from remote storage? Could be an issue especially if HD recordings.
Yes, there's that available too but it's not usually the default.
Yes, that's another feature of the deletion system - recordings from suggestions are always the first to be deleted before any recordings scheduled by the user, as you suggest they have the lowest priority.
First to go are suggestions (if you have any - the suggestions system can be turned off), then recordings with keep-until dates.
One solution would be that the "size" of each bookmark on disk is the same size as the corresponding remote storage based on the assumption that it will eventually be cached locally, in which case there'd be no difference in terms of the capacity problems with how PVRs work today.
However if bookmarks take up virtually no space - in the expectation that most viewers will watch bookmarks via VoD rather than locally cached copy - this would leave much more space on the hard-disk for any content that does become a locally cached copy.
If you then run out of disk space the system should delete the oldest locally stored programme (which is the default. TiVo method for freeing up space) to make room for the new "recording", or simply fail to "record" the bookmark at all and leave it up to the end user to delete some of their old junk (VM or Sky method? Don't know as I never run out of space on my SkyHD box).
Obviously this is all hypothetical, but the system would be a balance between how long VoD content remains available (longer periods would mean reduced demand for local caches) and how large hard-disks are - if you mostly watch VoD stuff before it expires you actually need only a relatively small hard-disk to store the few programmes you never got around to watching in the months before they expired on VoD.
What should be remembered is that PVR hard-disks are not intended for archival storage.
Says you, I've had stuff on there from over 1 year ago.
The other potential issue (apart from possible legal issues) is the speed of fast-forward/rewind from remote storage (not great now via VOD) and possible blocking of fast-forwarding through adverts, I'm sure Virgin have/are testing this already.
I dunno, I guess I just like total control of my recordings. Full control to zip through adverts at whatever speed I want; no expiry dates; no second-guessing about the local headend 'recording' what I wanted recording.
I'm sure Virgin will do it anyway, at some point.
So have I (two programmes, both marked as keep until I delete), but when my hard disks fail (as they most certainly will, and I have two in my TiVo) I'll have only myself to blame for losing that content.
And when a user can't record anything because the hard disks are full up with cr@p they've not bothered to watch or archive off to DVDR/whatever, again there is only one person to blame for any inability to record new stuff.
At the end of the day, there is a certain onus on the end user to ensure there is enough free storage space to record new stuff - there's not really a great deal the cable company can do with whatever system they use (VoD, local storage, hybrid, etc.) if the end user doesn't manage their disk space effectively.
That's why I said "if the viewing experience is the same for both VoD content streams and locally stored content".
If you have to wait several seconds for the stream to buffer, or cannot fast forward at 30x/60x, or through adverts then it's a non-starter as an alternative to always recording to the hard disk.
By the way this was all talked about when " TV Drive " came by Telewest that all there customers would have one in there homes. BUT the cost of joining Telewest & NTL stopped HD and many other plans.
I bet it's that they are getting money from companies with all the images along the the top of the images they have put about and images of the USA.
It's just took Tivo almost a year change to virgin colours and put a logo on screen at what cost ? going by the USA imges of Tivo there.
Also what is going to happen to all the old boxes SD and HD if top post is right ? and at what cost ?
PLUS they have just in 2010 spent money on new box that is just HD with out a hard drive. so they going to make those customers have larger box in there home.
How they justify it will likely be down to how much money they can save by only supporting one TV platform which has more up to date technology that the Liberate platform they run at present.
It was likely a lot more than that. TiVo is designed to work with the US cable system, so wouldn't automatically work with DVB-C (which is a European standard), and other Euro and UK requirements
The colour change was probably the easy bit!
The V HD box is compatible with the TiVo platform so will be retained in some form going forward
IIRC they've spent years trying to standardise the whole network, so I suspect they did everything they could to ensure they could do TIVO in parallel to the current software on the whole network.
Not to mention last year was a World Cup year, and VM basically stopped all work that could affect the TV side of the network for the duration (and I suspect all bar the most urgent work to the physical side of it, full stop), to minimise the chances of disruption to footy fans during the biggest event for them (didn't they even pause the rollout of the new smart cards?).
As for justification for a swap to all TIVO capable boxes, from VM's POV it would probably be partly justified by the bandwidth savings. From memory at the moment only the VHD and new TIVO boxes can do mpeg 4 compression, whilst V and V+ boxes use mpeg2, so I suspect once they get rid of the "legacy" boxes off the network they will be able to start swapping fully over to Mpeg4 (or whatever compression the new boxes use - is it mpeg4 or x264?), which will free up a lot of room on the network (much the same as turning off analogue did).
That alone would probably be a very attractive proposition for VM as it'll save a lot of money in network capacity upgrades for other uses (more channels, more VOD streams at any given time, or more space for internet "channels").
Also, if (as i've said before), they do it the way they've done it in the past, much of the costs of the rollout of new boxes will either be met by people impatient to get the new services:p or as part of a general policy of fitting the new boxes for new customers as standard and as replacements for older boxes rather than using refurbs of older boxes.
Even if just say 10% of boxes fail in any given year, that equates to 30% of the boxes being swapped over just from replacements in 3 years, let alone new customers and upgrades. Given that it undoubtably costs a reasonable chunk of change to repair a failed V box, there is a chance the new VHD boxes might be projected to work out cheaper over the space of several years than reusing boxes that are anything up to 10 years old (I wouldn't be surprised if the new VHD boxes are much cheaper than the old V boxes were to buy at the same point in their life, and more reliable*), so they could be betting on savings on engineer callouts and box repairs to offset the cost of the new hardware to an extent.
I get the impression that since the rebrand to VM they've been looking more to the future than NTL/BY did for TV, as for a long time it seemed that TV for NTL/BY was almost an afterthought compared to the internet product, and done "on the cheap", since the rebrand they've done a heck of a lot with the TV, ranging from more channels, to a much improved VOD service..
IIRC NTL or TW tried a much more advanced digital box than the ones they rolled out in the end, but went with the one they did because it was cheaper/easier to get working with the then network, despite the serious technical limitations of the box they chose (although I think, to be fair, that was at the time when they were struggling with the debt much more than now).
*Going by how much things like DVD, Blu-ray and general PC gear seems to have dropped in price, i wouldn't even be surprised to find out that a new VHD box costs VM only a .little more than buying a new V box at the moment (as a decent DVD player can cost £40-50 for say a Toshiba or Phillips, and a reasonable Blu-ray player can be had for <£100 retail). After all both the V and VHD boxes with share many of the same costs, such as the modem (although the chances are the VHD uses a cheaper/more integrated modem chipset). PSU, casing, smart card reader - and some of the parts being changed for better ones are probably cheaper for the newer ones due to more integration (less overall parts),
Virgin have also confirmed their intention to supply differentiated tivo boxes at different price points so as many customers as possible can afford them (e.g. differentiated by hard drive size).
http://85.133.72.37/imagelibrary/downloadMedia.ashx?MediaDetailsID=163
http://sustainability.virginmedia.com/Stories/The-thinking-inside-the-box-86.aspx
It's got to be done, they messed up by introducing MPEG2 for HD when everyone else had gone for MPEG4 - this is now costing then dearly.
I would imagine the new HDD (non-PVR) boxes are already MPEG4 capable, and the newer V+ boxes presumably are as well.
Initially it won't cost them much, if anything, because they charge for the boxes - so it's self funding. Presumably initially they will only need to replace all the HD boxes, then they can switch their HD channels to MPEG4 - but this is only where Sky have been since day one.
Once that's done they can then see about changing the SD users to new boxes, once that's completed then they can switch the SD channels to MPEG4 as well, giving themselves more bandwidth to play with. Sky have perhaps already started on this course, by dropping SD boxes entirely - but NOT doing anything about all the non-HD boxes out there.
Because VM is far more controlled and structured (as they rent out ALL their boxes), I would imagine they are far more likely to complete it well ahead of Sky.
The question of mpeg4 vs 2 was also raised at the investor day. They basically said since getting rid of analogue, bandwidth constraints are not an issue for them for quite a while. They plan to roll out more HD channels etc.
MPEG-4 gives a bandwidth saving on HD channels but there isn't much impact for SD channels. NTL were going to release an mpeg-4 box but when the merger happened they decided to stick with the existing telewest TV drive boxes which were already in the field wiht mpeg-2 decoders. mpeg-4 decoders were also a lot more expensive then than they are now.
They can only switch anything to mpeg-4 once ALL V+boxes and V-HD ones are mpeg-4 compatible. If we assume the V-HD ones are already compatible and the samsung V+HDs then there are still hundreds of thousands of SA V+HDs to replace. That would cost millions. What is more likely is their intention to drive the TiVO experience to all their customers over time. Once a certain critical mass is reached and the deployed number of older V+ boxes falls to a smallish number then it would be viable to replace them FOC and then switch to mpeg-4.
But there's lots of other things they could do in the meantime - switch to DVB-C2, use higher QAMs on their channels and drive fibre deeper into their network.