Key points from Kaufman Bros. analyst Todd Mitchell's recent note to clients (for a full-length .pdf version of this report, click here):
Comcast announced that on July 1, it will shut down its analog tier in Chicago and offer all basic subs its all-digital expanded-basic tier.
Comcast transition to all digital sets the stage for STB software overlay. Not only does Comcast's transition to an all-digital offering in Chicago free up a lot of capacity for it to offer HD and HSD service, we believe this is another positive indicator for the set-top box software companies. Cable's transition to an all digital distribution platform 1) drives set-top boxes down into the network and 2) is the first step in it moving to a point where cable can standardize its set-top base on some sort of middleware. Once this happens, it can then offer a whole host of interactive services such as interactive and targeted advertising.
So far, we have seen two small technology companies benefit from Comcast's transition to a digital network (Big Band and Ensequence). We have made it clear that we think OpenTV is also very well positioned to win an interactive advertising application deal with Comcast as well.