Broadcasters are starting to use the more efficient (space-wise) MPEG-4 codec for their HD content, it seems. You see, it takes up less space, so therefore more MPEG-4 streams can be pushed to viewers in the same space previously used by MPEG-2 streams.

Tut Systems says it has deployed the first MPEG-4 headend in North America at Farmers Telephone Cooperative, a 60,000-subscriber operator in South Carolina. Farmers’ IPTV service is not available commercially yet, Tut officials say, but the telco is already streaming a “limited number of channels” in MPEG-4 to “a limited number of people.”

“They are surprised at the results; and the quality and bit rates that they’re seeing [are] pretty impressive,” says Tut’s VP of marketing Craig Bender.

And:

MPEG-4 video streams require about half the bit rate of MPEG-2 streams yet deliver comparable picture quality. To deliver two HD channels via MPEG-2 requires a bit rate of 16 to 18 Mbit/s, while the same two channels would use only 6 to 8 Mbit/s using MPEG-4 compression.

So there you have it.

Link: Light Reading - HDTV Pushes Telcos Toward MPEG-4