HDcctv Alliance Competitive Analysis

By: John Honovich, Published on Jun 15, 2009

HDcctv - the move to non-IP megapixel - is gaining an immense amount of media attention. However, how strong will it be against IP, megapixel and Hybrid DVRs?

Details are beginning to emerge allowing us to more carefully analyze this. The HDcctv alliance has released their draft technical specification and begun to share technical and operational details on the specification and the solution. [Background information: see our original original report on HDcctv, SecuritySquared's coverage [link no longer available] and SSN's video [link no longer available] on the HDcctv Alliance.]

Overview of the Specification

An overview of the specification shows that the 1.0 release in September will support 720p over coax. Future releases plan to support 1080p, audio, data and power over coax and fiber optics.

Founding Members

With the announcement, the 4 founding members of the group has been disclosed. They are:

  • Gennum [link no longer available] - manufacturer of HDcctv transmitter and receiver chips
  • Stretch - manufacturer of HD DVR cards
  • Ovii [link no longer available] - OEM of HDcctv cameras [Update 2011: Company out of business]
  • Everfocus - manufacturer of HD DVRs and cameras
Comart Systems [link no longer available] has joined as an Adopting Member, offering HDcctv products [link no longer available].

The group is now open for membership. An important indicator will be the number and strength of the companies that join the group. 

Probability of Success?

Let's examine the technical elements of an HDcctv solution:

  • Camera - The camera will require an HD transmitter (Gennum's 7600 is an example). Unlike an IP camera, it will not require an encoder chip. HD transmitters are projected to cost $5 - $10 USD. This will be significantly less expensive than the hardware required for encoding HD video in the camera.
  • Cabling - HDcctv is targeting up to 170 meters over RG-59 for 720p resolution video. Contrast this to analog video, where the maximum distance is 300 meters.
  • Recorders - HDcctv cameras will not work with existing SD analog capture cards. This will require upgrading to new DVRs (replacing capture cards in the field is costly, complex and unlikely for most manufacturers). Stretch plans to support (4) 720p HDcctv cameras at 30fps recording/60fps viewing using H.264 SVC on an upcoming model - the VRC6044HD. Contrast this to Stretch's equivalent for analog SD - the VRC6016 which supports 16 channels of H.264, D1 resolution video.
  • Hybrid recording - HDcctv cameras and analog SD cameras will require separate encoding cards. A single card cannot mix and match the two types. For instance, if you want to support 4 HDcctv cameras and 16 analog cameras, this will require 2 separate cards.
  • Live monitoring - An HDMI output to a live monitor will be provided on the Stretch cards enabling very high quality live monitoring. DVR manufacturers can use Stretch's API to configure sequence or multiplex views, etc.
  • Matrix switches - Existing matrix switches cannot handle HDcctv video feeds. No new matrix switches that can handle HDcctv are scheduled for release this year. 
Cameras, encoder cards and recorders are all scheduled for release starting in Q3/Q4 2009.

Cost Projections

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While product pricing has not been formally announced, we can estimate the key costs in the HDcctv solution. For camera counts under 32, HDcctv cameras should save users an average of $200-$300 USD per camera. On a percentage basis, this could be a 20% reduction in price. For larger camera counts, the savings are likely to be less as racks of HD DVRs are likely to be more expensive than IP cameras connected over IP networks to servers managing 100+ cameras.

The cost difference is broken down into 3 segments:

  • Camera cost: While HDcctv cameras will be more expensive than SD analog cameras, they are likely to be significantly cheaper than 720p IP megapixel cameras. Compared to an SD analog camera, the HDcctv camera will require a higher resolution imager and the HD transmitter chip. For a given SD analog camera costing $250 USD (end user price), the HDcctv camera may be $330 USD and the 720p IP camera would be approximately $500 USD. The difference will be in a range - $150 - $200 USD cost reduction estimated. [UPDATE 2011: HDcctv camera costs are equal to or higher than IP cameras with dissapointing HDcctv pricing and continued declines in IP camera costs.]
  • Cabling cost: Since 95% of cameras installed today are analog, the overwhelming majority of cabling is coaxial. Assuming that the cable is in sufficient shape to re-use, the cabling savings can range from $100 (not having to pull new cable over short runs) to over $400 (eliminating the need for adapters like Veracity). These savings will not be realized for cable runs over 150 meters (approximately) as the HDcctv specification will not support the longer 150m - 300m runs of SD analog.
  • DVR cost: The cost on the DVR increases both relative to SD analog and IP. The main cost drivers for HDcctv are (1) lower cameras per card and (2) addition of an HD receiver chips. Using Stretch's card as an example, camera count per card will reduce by 75% (from 16 SD analog to 4 HDcctv). Given the cost of capture cards, this likely will increase the end user price of DVRs by $125 - $150 USD. [UPDATE 2011: HDcctv DVRs are still quite limited and very expensive.]
In total, the savings on the camera side are likely to be mostly offset by the cost increases on the DVR side, though modest per camera savings may occur. The savings on the cabling side are likely to be the most significant.

Competitive Comparison

Hybrid DVRs (supporting both analog SD and IP megapixel cameras) will be the strongest competition to HDcctv. Hybrid DVRs allow for IP megapixel cameras to be recorded, managed and displayed in the same system/UI as existing analog cameras. On the other hand, they will require new cabling and set-up on IP cameras. However, the two are not mutually exclusive and it will be possible for "tribrid" DVRs to be developed that support analog SD, HDcctv and IP megapixel.

Key Obstacles

I see two major obstacles to the success of HDcctv, especially in comparison to hybrid DVRs:

  • HDcctv requires new DVRs, allowing customers an opportunity a move to hybrid DVRs/IP megapixel - a more mature solution than HDcctv. If customers could simply add HDcctv cameras to their existing DVRs, HDcctv would almost certainly be successful. The benefits of eliminating a new DVR sale would be very appealing. However, that's not technically possible, forcing customers to evaluate a new DVR purchase. In doing so,  Hybrid DVRs/IP megapixel will be attractive. The Hybird DVR recorders will be less expensive than HDcctv DVRs (because they do not require the special HD capture card). They can flexibly handle many megapixel IP cameras because the encoding is done on the camera. They enjoy wide manufacturer support with most manufacturer now offering them. Plus, many of them support multiple megapixel manufacturers (even before ONVIF/PSIA support is added).
  • HDcctv requires separate cards for SD analog and HDcctv, creating configuration complexity and difficult migration paths. This will require a number of new configurations to be offered such as a DVR with 4 HDcctv and 16 analog or 8 HDcctv and 8 analog, etc. Integrators will have to stock these models and explain to customer about the differences. More importantly, there is no upward migration without DVR replacement. If you start with 2 HDcctv cameras and purchase a 4 HDcctv/16 analog system, you can not use more than 4 HDcctv cameras without upgrading the entire DVR. In essence, this shifts the notorious 17 camera problem down to a 5 camera problem. By contrast, Hybrid DVRs can mix and match many IP/megapixel cameras without concern for new hardware. Such scalability is with limits and the limits varies by manufacturer. However, in almost all cases it would be more scalable and easier to migrate additional cameras than the HDcctv equivalent.
 
The competition for HDcctv will be primarily from hybrid DVRs. Handling analog cameras and their migration to high definition is the critical element in solving the problems of the mass market. While HDcctv certainly offers benefits in simplicity and cost compared to IP, it needs to demonstrate that the complexity and issues in supporting analog cameras is superior to Hybrid DVRs/IP megapixel.

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