Last month, Videonet released its report on The Hybrid Platform Operator, which looks at the market implications of the hybrid platform operator and considers the challenges in creating what should be a unified service through multiple networks and devices. Issues addressed include matching broadcast quality of experience (QoE) on streaming services, the user experience, integrating over-the-top (OTT) video into the set-top box (STB) offering, the role of adaptive bitrate STBs, and streaming versus broadcast.
Tags: Adaptive Streaming
Our partner, Verimatrix, had the pleasure of sitting down with John Moulding, the editor of the Videonet report, to discuss the evolution of hybrid network offerings, and the challenges facing hybrid operators today. Following is a transcript of the conversation.
VMX: How has the definition of a “hybrid network” evolved over the last couple of years? How would you define a hybrid network today?
JM: The most important change is that we have to account for OTT video services — including managed broadband delivery — now. When the industry started talking about “hybrid” it meant a DVB broadcast mechanism plus classic IPTV. An example of this is an IPTV service using their DSL network for video on demand (VOD), but the local DTT bouquet as the linear channel offering.
This kind of hybrid service is not that common but it is becoming more commonplace to see a broadcast service combined with OTT/broadband. An example of this is a satellite operator using their satellite DVB-S/S2 signals for linear TV and broadband to deliver VOD into IP-connected DVRs.
The really big change, now underway, is that even platform operators who already have a two-way network (like cable) are adding broadband/OTT delivery into their STBs to further enrich the service. Virgin Media in the UK is an example: they offer classic cable VOD, but they are also dedicating DOCSIS bandwidth to broadband video that is delivered into their TiVo DVRs. The broadband is used for catch-up TV, YouTube and for streaming video that is accessible via channel partner apps, among other things. So OTT is not just a way to enable two-way services, it is a way to enrich existing two-way services.
It is probably worth drawing a distinction between a hybrid service (what we would call a hybrid platform operator) and a hybrid network. There are some hybrid networks where an operator uses both cable and IPTV footprint to reach homes, but as a customer you only sit on one footprint or the other. To be defined (by us) as a hybrid service/operator, there needs to be more than one network input into the customer premise equipment.
VMX: What are the biggest challenges facing hybrid platform operators?
JM: If we are talking about OTT/broadband delivery as the second part of the “hybrid” (by far the most interesting version of hybrid today), a key challenge is to ensure that the services you offer via this “pipe” meet the high expectations that TV viewers have when turning on a STB. We are all used to television just working, for pictures to look great (especially if you get HDTV) and for them to remain consistent.
You need to ensure that the service blends easily into the overall television package, so that people can access streaming video (including catch-up TV) easily. This user experience is where platform operators can differentiate themselves from pure-play OTT services and smart TV vendors, so it should be (and is) a major focus area. And depending on what content you want to deliver via broadband, the content protection must be up to the job.
VMX: How can operators overcome these challenges and position their company for success?
JM: While operators might not be able to offer the same quality of experience (QoE) as classic TV today when using OTT, they must make that an ambition. Guaranteeing the bitrates for the OTT services is a good start and clearly the quality of the content delivery network (CDN) arrangements and video compression are going to impact what is possible within the bandwidth that is available.
The new generation of pay-TV platforms (e.g. Virgin Media TiVo) and indeed the next-generation free-to-air platforms (like YouView and Freesat’s in the UK) are all addressing the user experience (UEX) challenge. They are using backwards-facing electronic program guides (EPGs), Now/Next, Search and apps, etc. to help people find streamed on-demand content easily. There is a distinct feeling that all the content is in one place — and the source of the content is hidden.
When it comes to content protection, you need studio confidence in the quality of the digital rights management (DRM) implementations on broadband, and the best solutions seem to manage conditional access (CA) and DRM in one place and translate business rules into entitlements for multiple DRMs while removing most of the complexity from the platform operator. Unified content protection management becomes even more important once you start throwing in multiscreen services, which also use OTT and could well use the same video streaming that is delivered to a STB.
VMX: How can operators differentiate their pay-TV offerings from those of their competitors?
JM: When it comes to the broadcast/OTT hybrid, the most obvious way to differentiate is the addition of VOD and catch-up TV if you are currently relying on a one-way broadcast network, like satellite. This is a potential game-changer if you are in competition with two-way providers like cable and IPTV.
If there is a level playing field, in the sense that all providers now offer VOD (including any broadband delivered content) then you can differentiate by the volume and quality of the content available via OTT, whether that is the number of catch-up TV channels or the number of compelling content-rich apps.
The more important the OTT delivered content becomes to consumers (and catch-up TV, if nothing else, will ensure we do start to rely on it more) the more important QoE becomes. This can be a differentiator, assuming competitors neglect it, although there is clearly a point where ‘good enough is good enough’ and a triple-play consumer is not going to churn in order to get a 10% improvement in their catch-up picture quality. But if only one provider in a market can give you a reliable catch-up TV service on a 32-inch screen and everywhere else it pixelates, then this could be a competitive weapon.
VMX: What was the most surprising discovery when talking with industry experts for The Hybrid Platform Operator report?
JM: We have been excited about ‘Pay-TV Lite’ services since they started to appear. These are OTT bouquets offered by existing pay-TV operators and targeted at new homes, rather than existing subscribers. NOW TV from Sky in the UK is a great example, offering movies and sports on a per-month (and even per-day for sports) subscription basis.
One surprising insight was that in the U.S. a cable operator is looking to offer an OTT subset of its normal bouquet to persuade cord cutters to come back to them in some form, with the eventual aim of upselling them back to the full ‘traditional’ package. That means they will only use the Pay TV Lite service within their current footprint (because that is the only place you can offer the full package), even though you can, in theory, go off-net with OTT.
I was also surprised at how forthright Guy Bisson, Research Director for Television at IHS Screen Digest, was when he told us that Pay TV Lite platforms like NOW TV are a marker in the sand for pay-TV operators who are hedging their bets in case the world becomes increasingly OTT. We always thought these services were more than just a Netflix-busting movie service, but did not look upon them as a parallel platform that could accommodate an OTT migration.
I was also surprised by the amount of interest there apparently is in using IP/ABR-only (adaptive bit rate) STBs as the primary receive device in pay-TV homes. We were told about one cable operator that is looking to provide a replica cable TV offering via an ABR STB. Ironically this would take us beyond “hybrid” and back to a single delivery system into the customer premise equipment, only this time that single stream is going to be OTT/ABR rather than DVB-C, for example.
To view Videonet’s full report on The Hybrid Platform Operator, sponsored by Verimatrix and RGB Networks, please click here.
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