Pay TV As the 'Complete Entertainer'

ISSUE 19 WWW.V-NET.TV

PAY TV AS THE ‘COMPLETE ENTERTAINER’

Re-appraising ‘digital native’ desires Pay TV on every screen PVR and ‘home vs cloud’ Ensuring the best QoE Sponsored by VIDEONET ISSUE 19

PAY TV AS THE ‘COMPLETE ENTERTAINER’ INTRODUCTION After five years of unprecedented threats to Pay TV, it turns out that people do still appreciate what it offers, including linear TV, PVR and the potential for everything in one place. The ‘digital natives’ might be more conservative than predicted. So after disruption and ‘survival’ comes the re-appraisal. Videonet explores the Pay TV responded to customer demands with more on-demand, better UIs business and technology and multiscreen TV. Like the man who fixed the hole in his ceiling to find every- challenges faced by the TV one admiring his chandelier again, platform operators have turned attention back to industry as it introduces their strengths. more high-definition and on-demand content In this report we consider the future shape of Pay TV services, from UHD to and evolves towards tablet TV. We look at how operators can deliver the best experiences on every screen a multiplatform and in their home, which means taking a look at the ‘Cloud versus Gateway’ debate and connected TV experience. how you deliver a great QoE. We review why Pay TV operators are best placed to be Click here to subscribe free. the ‘Complete Entertainer’. John Moulding, Editor, Videonet

Editor John Moulding [email protected] CONTENTS

Publisher • Introduction Justin Lebbon After five years of unprecedented disruption the Pay TV industry is still standing, partly thanks to [email protected] its diverse service offer. • Re-appraising ‘digital native’ desires Advertising and Research suggests that youngsters still appreciate what platform operators offer, including linear Marketing TV. Katrina Coyne, Business • Pay TV on every screen Development Director +44 (0)20 8425 0966 Multiscreen and multiroom TV are part of the same solution, making Pay TV content available [email protected] everywhere. • The power of linear TV General Linear TV is still at the heart of the television experience, even when we are not actually watching [email protected] it. www.v-net.tv • PVR and ‘home vs cloud’ PVR versus network PVR is part of a much bigger debate about the future role of CPE and the videonet ‘cloud’. 11 Victoria Road • The connected entertainment home Berkhamsted, The likely architectures for whole-home viewing, including STBs versus ‘Operator as an App’. Hertfordshire HP4 2JT • Ensuring good QoE How gateways reduce customer calls, how CDNs can improve resource allocation and why complexity is an opportunity. • Conclusion CONNECT WITH VIDEONET Pay TV operators can offer everything we need in one place, as the ‘Complete Entertainer’ but VIDEONET MANAGES THE MOST there is no room for complacency. POPULAR DEDICATED LINKED-IN GROUPS FOR CONNECTED TV AND 3DTV, WITH MORE THAN 7,700 AND 2,000 MEMBERS RESPECTIVELY. CONNECTED TV GROUP 3DTV GROUP CLICK FOR MORE INFO:

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Editor John Moulding CONTENTS [email protected]

• Introduction After five years of unprecedented disruption the Pay TV industry is still standing, partly thanks to Publisher its diverse service offer. Justin Lebbon • Re-appraising ‘digital native’ desires [email protected] Research suggests that youngsters still appreciate what platform operators offer, including linear TV. • Pay TV on every screen Multiscreen and multiroom TV are part of the same solution, making Pay TV content available Advertising and everywhere. Marketing Katrina Coyne, Business • The power of linear TV Development Director Linear TV is still at the heart of the television experience, even when we are not actually watching +44 (0)20 8425 0966 it. [email protected] • PVR and ‘home vs cloud’ PVR versus network PVR is part of a much bigger debate about the future role of CPE and the ‘cloud’. • The connected entertainment home Websites The likely architectures for whole-home viewing, including STBs versus ‘Operator as an App’. www.v-net.tv • Ensuring good QoE www.futuretvads.com How gateways reduce customer calls, how CDNs can improve resource allocation and why complexity www.connectedtvsummit.com is an opportunity. • Conclusion Pay TV operators can offer everything we need in one place, as the ‘Complete Entertainer’ but there is no room for complacency.

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The Pay TV industry has survived five years of unprecedented threat and disruption and is still standing. Pay TV as the One of the reasons is the speed with which platform operators introduced their own multiscreen offers; another is the expansion of on-demand to in- clude catch-up TV. But it also turns ‘Complete Entertainer’ out that linear TV, far from dying, remains central to the home enter- Why Pay TV providers are best placed to be the tainment experience, meaning the ‘Complete Entertainer’ in customer homes, fight- network investments that made it ing off the threat of OTT by giving consumers possible to deliver high quality, mul- more of what they want through one service but tichannel HD have not been wasted across many screens. Multiscreen and multiroom after all! are increasingly important, including for PVR, but Even if linear programming is everything still revolves around linear TV. not the purpose of the TV journey it is often the starting point. Some- By JOHN MOULDING times it leads to PVR, sometimes to catch-up and increasingly this could be on any screen. There is a growing view that nobody is going to displace platform operators from their posi- tion as the primary aggregator for entertainment without a strong linear proposition. Meanwhile, the in-home PVR is being publicly recognized for what it is: a compelling solution for time- shifting, thanks to live pause, instant playback, replay rights on all pro- grammes, ad skipping and guaranteed HD quality no matter how good or bad your broadband connection is. Network recording services will tick many of these boxes in time but for now, PVR remains an important Pay TV advantage. Most commentators have de- cided that YouTube and even the many online subscription VOD stores like LOVEFiLM are complementary to Pay TV and do not sub- stitute it. Cord shaving is still an issue but most analysts have stopped worrying about serious cord cutting. Pay TV operators still have the content that most of their customers want and, having got to grips with

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convergence, they have more ways August 2012 that 41% of consumers than ever to exploit their content are willing to pay for HD quality and “given a choice between having the rights. image quality becomes more impor- More than anything, the last tant as screen sizes grow. 60% of peo- option to download a new series five years demonstrates the value of ple watch on-demand content every in one go or waiting to watch diversity, whether you are talking week and 67% use tablets, smart- about content, customer profile or phones or laptops in their everyday it week by week, 73% said they the services on offer. Pay TV opera- TV viewing, either for video con- prefer to watch it week by week.” tors serve homes as well as individu- sumption or to enable a social media multiscreen service from Modern box, 73% of them preferred to access als. While they were developing their experience. Times Group (owners of free and it via the STB. The two biggest rea- multiscreen and on-demand offers It also found that scheduled pay channels and the Viasat DTH sons were that it is quicker to access the money kept flowing because Dad broadcast TV is still the dominant platform) countered the idea that (47%) and the catch-up content is in wanted his sport and his daughter form of content consumption, de- younger consumers will be happy the main room (45%). was desperate for Disney Channel, spite a slight decrease over recent to search for content from multiple “The power of inertia cannot even if his teenage son was spending years. It added: “Consumers have locations and effectively become be overstated,” the company says. “It most of his time watching YouTube access to a multitude of different on- their own aggregators. “Our research is simply easier to switch from live on a laptop. demand services as well as linear TV suggests that our future customers TV to the on-demand library on a Where there is weak OTT Daniel Simmons, IHS Steve Christian, Verimatrix do not want a user experience based set-top box than it is to switch from competition, Pay TV operators are on multiple apps downloads and live TV to the Smart TV portal, load cementing their customer relation- scheduled broadcast TV is still Thinkbox used a technology- multiple credit card relationships,” a broadcaster app and browse for a ship on the living room TV first with centric, VOD-centric UK audience the dominant form of content he said. “Having most of what they show.” Decipher concludes that the next-generation platforms that pro- for the study and the conclusion consumption, despite a slight want in one place will still be a ‘ace in the hole’ for Pay TV operators vide smart User Interfaces and bet- was that young people are happy to differentiator for a Pay TV platform.” in the battle for our attention is that ter content discovery. Where there decrease over recent years. wait to watch TV so they can enjoy a As part of its FutureMedia it is easier to move around within the are OTT alternatives on portable shared experience. The organization the marketing body for UK commer- 2013 Programme, the UK media environment they create than move devices the imperative is to make the channels. These sources offer a good concluded that man cannot live by cial TV, contained a significant in- consultancy Decipher found that in in and out of it. Pay TV bouquet available on as many service, yet consumers are struggling VOD alone. In fact: “Live TV is our sight. “When given a choice between BSkyB satellite homes where con- Pay TV operators still have to screens as possible, including on to merge them together. People are daily food whereas VOD is more like having the option to download a new sumers have the same on-demand give us the content we want, where more televisions. eagerly looking for an aggregated a box of chocolates.” series they liked in one go or waiting ‘player’ services available in a Smart we want it…and at the right price. Once Pay TV operators pro- service which can bring all content Earlier this year, Niclas to watch it week by week on live TV, TV and on their connected set-top The 2012 Ericsson ConsumerLab vide multiscreen and, increasingly, into one experience.” Ekdahl, CEO at Viaplay, the online 73% of 18-24s in the research sample report noted that, “The biggest bar- multiroom TV services, they begin a The researchers concluded said they prefer to watch it week by riers to consuming on-demand are new chapter in their history. Having that there is an opportunity for week. This was more than the older cost, or not finding the content that diminished the threat of disinterme- someone to take this new role. They audience of 35-55s (57%).” the user is looking for, and not be- diation, they can start to think about could be an on-demand service pro- ing able to watch the content on the the opportunity presented to them vider, a social networking brand or a household’s main TV screen.” thanks to their uniquely diverse traditional TV provider. “Whoever Kevin Nolan, Vice President services, available everywhere. They takes this mantle will need to expand at the User Experience Practice at have the chance to be the ‘Complete their business to support all ways that Strategy Analytics says the viewing Entertainer’ at the heart of an in- consumers watch TV,” the report says. of content from OTT sources within creasingly connected home. Many of the predictions about the home is typically driven by two the likely entertainment viewing be- main motivations. Either, ‘there is haviour of young adults who grew nothing on regular TV’ or different up with the Internet are now being Re-appraising family members want to watch dif- challenged. The recent ‘Screen Life: ferent things. TV in demand’ study from Thinkbox, ‘digital native’ “In the first scenario, viewers often leave the operator UI because, desires while they know that premium Drawing on its global insights, Pay Per View content is available from their provider, they perceive Ericsson ConsumerLab revealed in The DIRECTV whole-home solution T-We, Canal Digital

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the new technology. He adds: “Young “Young people are very clear people are very clear that they are Diversity is a happy to get their content from one that they are happy to get their place if you make it easy for them.” strength at Canal content from one place if you Digital make it easy for them.” Canal Digital is currently pilot- Virgin Media said the ‘Complete way in making online video available Pay TV on every ing its new cable TV platform for Entertainer’ is a good vision, with on the television set in a convenient Norway, which will launch in the big Hollywood blockbusters at one setting, with YouTube and broad- screen autumn. Called T-WE, it will pro- end of the Pay TV scale and cats on caster catch-up apps including from ONO has strengthened its relation- vide a one week catch-up service skateboards, courtesy of YouTube, at RTVE and Antena 3, and even some ship with customers thanks to a fo- across 30 channels and a larger the other. But as well as providing regional broadcasters like TV3. cus on the living room TV; the com- archive service, plus universal depth and diversity, everything must ONO also provides 130 linear search. pany has yet to deploy multiscreen be easy to use. At Virgin Media this is channels, 25+ channels of very high These new features will be TV. But in several other markets available on the current Canal enabled on the TiVo platform. bitrate HDTV and its own managed multiscreen is now a must-have for Digital HD PVR (provided by ADB) Mecklenburgh says the plat- VOD offer called Videoclub. The Pay TV operators. Parks Associates but the operator is also deploy- form operator role is not just about Videoclub content surfaces in search figures show that 60% of TV viewing a new HD DVR in the autumn aggregating content but surfacing it. results already and in the next soft- ing on the mobile phone and 70% of (also ADB) that will also serve as “We will surface the best and most ware upgrade to its TiVo platform Roland Mestric, Alcatel-Lucent TV viewing on tablets is performed a multimedia gateway for distrib- relevant content and make it easy for some of the OTT content will be in- within the user’s home, which is why uting content to multiple screens customers to get hold of it,” he notes. tegrated into the search function. multiscreen is more a part of the around the home. The ‘Complete Entertainer’ can “We want the customer to have our German Sanz, TV Product ‘whole-home’ strategy than the TV- A Canal Digital spokeswom- remote control in their hand and our Development Manager at ONO, has on-the-go strategy. an says the new platform will pro- deliver a growing range of service on the TV.” no doubt that making everything Ben Schwarz, CEO at CTOi vide live TV, SVOD, VOD and OTT on-demand content while Being a Complete Entertainer available in one place is one of the Consulting, a consulting firm in the in one place. She says this is an invariably means giving access to reasons behind the company’s high advantage when the solution is remaining the guardian of TV and telecoms sector, says content some third-party OTT content via customer satisfaction levels. ONO is easy to use. “Our customer base is linear TV and PVR. is still king so if you want to extend diverse, with 500,000 households. the set-top box. This does not have recording churn rates that are sev- your reach to all screens the biggest For the older demographic ease- other content sources like Netflix that the next-generation platforms to be a defensive play. In Spain, the eral times lower for customers of its challenge is knowing what content of-use is highly important. The to be better value for money. If op- that Pay TV operators are deploying cable operator ONO is leading the next-generation platform compared you need, then securing the rights younger demographic is more erators were able to convince viewers are focused on improving the living to its standard proposition. Sanz says before it is already out of fashion. So demanding in terms of Quality of that their on-demand offerings were room TV experience as much as ex- ONO is definitely in a stronger posi- the role of curator remains key. Service,” she reveals. price competitive with alternative tending the Pay TV service to other tion than it was 2-3 years ago, which If you get this right, is there a The company recognizes providers then we believe that the screens. On the television the focus is was the ambition when investing in that diversity is not just about the convenience of being able to access on a much-improved User Interface, services available, but how they all services from a single UI would better content discovery and the pro- are packaged and priced. “We be very appealing.” vision of complementary broadband have been making major chang- Strategy Analytics has found content, from YouTube and Spotify es to make sure our customers that when people opt out of watch- to broadcaster catch-up services. have more freedom to tailor their ing what the rest of the family has The term, ‘Complete Enter- packages,” says the spokeswom- an. “For instance, we launched chosen on the large screen, and go tainer’ was aired at the Connected a new basic package for TV last to the tablet or PC, there is much TV Summit in May as a way to de- year where customers get the 30 more interest in trying out new con- scribe the future role of platform largest TV channels but can then tent that they would not normally operators who, thanks to hybrid choose 15 channels individually watch at home, and new sources of broadcast/broadband delivery, can from a total of 70. We believe we the content. “As such, the threat from deliver a growing range of on-de- have to provide a more diverse alternative sources is definitely more mand content while remaining the offering for our customers in the acute in the personal device domain,” guardians of linear TV and PVR. Ian future.” Nolan cautions. Mecklenburgh, Director Consumer It is hardly surprising then Platforms at the UK cable operator ADB enables Pay TV operators to bring all screens under their umbrella

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NC+Go multiscreen offer earlier this In some mature HD markets year and declares itself very satisfied thoughts are turning to what comes 4K represents a more natural with the early results. “What is cru- next. 3DTV in its current iteration, cial is that this product is targeted at with glasses, has failed to ignite con- progression for the industry the best client group, who are usu- sumers’ imagination for home view- than 3D in the home ally young and who are very actively ing, so the smart money is on Ultra looking for content,” a spokesman HD (in particular 4K video) as the model, from Seiki Digital, is signifi- HD in 2017 in Europe. says. next big thing. The CE manufactur- cant in several aspects. “It represents Futuresource Consulting says In an example of where things ers are certainly wishing it so. the first sub 50-inch UHD launch in 4K has a 2-3 year incubation period are heading in multiscreen TV, all Simon Bryant, Head of Con- the US; it is the first sub-$1000 UHD ahead and is on track to become a the linear channels that are routed sumer Electronics at Futuresource launch, marking the technology’s en- significant technology segment. The through the NC+ PVR (the main Consulting, believes 4K represents a try at a lower price range; and it dem- company forecasts that global 4K TV home gateway) are made available more natural progression for the in- onstrates the first step in competitive shipments will grow to 22 million across the home network to view on dustry than 3D in the home, but one pricing in the UHD market.” units in 2017. iOS devices. For technical reasons that brings its own challenges. These There is a debate about wheth- UHD has been trialled by (cited as the limitations of Android start with the intricacies of produc- er consumers will notice the benefits broadcasters and platform opera- devices) only MPEG-2 broadcast ing 4K panels at high yield rates and of 4K on screens smaller than 60 tors, including Sky Deutschland, the Ian Mecklenburgh, Virgin Media channels can be redistributed to the Joerg Eggink, ACCESS the complexities of delivering the inches, and doubts about whether German DTH operator. In June the Android handhelds today. bandwidth-hungry content. UHD has a large enough address- French Tennis Federation and France chance for Pay TV operators to actu- Redistribution of broadcast a master PVR to share its content Edward Border, Analyst, TV able market if they cannot. Regard- Télévisions cooperated to broadcast ally increase the time we spend look- channels to multiscreen devices is with multiple ‘zapper’ set-top box Technology at IHS Screen Digest less, Vassilis Seferidis, Director of live multi-camera UHD from the ing at their aggregated content, at the the next big step for multiscreen ser- clients. All the DVR/STB devices on noted the arrival in July of a 39- European Business Development at French Open at Roland-Garros. expense of rival broadband services? vices. The main reason is the popu- the home network are connected and inch, UHD LED television in the U.S. Samsung is working on the basis of a The big question is whether “I’d even say that platform operators larity of tablets as a consumption de- their tuners are treated as a common for $699. He said the launch of the viable starter mass-market for Ultra UHD is the next 3DTV or the next are starting the race against CE ven- vice. The NC+ spokesman says, “We resource, including the DTT tuner dors with a clear head start because believe the tablet can be used as an on a zapper box. According to the they own the billing relationship,” extra television set for individual use. NC+ spokesman, “The sales figures Schwarz answers. Such a service [making linear chan- show that the multiroom solution is Javier Lucendo de Gregorio, nels available on them] differentiates very important.” DTH and End Devices Manager us from pure OTT offerings.” at Telefónica Digital, certainly ex- Multiroom viewing is where pects more time in front of custom- you make content available on every The power of ers. “The deployment of multiscreen television, but a growing number of services provides more accessibility Pay TV operators are reporting that linear TV and convenience to customers. The tablets are now being treated like sec- expectation is, of course, to increase ondary televisions. The NC+ spokes- John Barrett, Director of Consumer the viewing time, but also the atten- man confirms that the company now Analytics at Parks Associates does not tion that the user pays to the content, views the tablet as an alternative to buy into the much publicized theory since multiple screens allow a much multiroom. that on-demand viewing will take more personal consumption,” he ob- NC+ is well advanced in its over from linear. “Our studies show serves. whole-home strategy. It provides a that people like linear channels and The Polish DTH platform standard and premium multiroom want linear channels.” He points to NC+, which resulted from the merg- DVR service, with the latter using service provider networks, built to er of ‘n’ and Cyfra Plus, launched its distribute linear channels, as a key advantage moving forwards. “The deployment of multiscreen People love HDTV and at ONO it is viewed as an important provides more convenience to service differentiator. The company customers. The expectation is is broadcasting some of its HD chan- to increase the viewing time” nels in an impressive 20Mbps in H.264. ACCESS is enabling DVR sharing with its NetFront Living Connect DLNA technology

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the living room was always a gim- the linear schedules so they want the mick whereas UHD is to HD what content there, but also the ability to HD was to SD,” he contends. record it. When we try to push the However it evolves, Pay TV op- same content to them from VOD we erators need linear TV at the centre do not get the same results, so linear of their offers. Lucendo de Gregorio is something you need to promote.” at Telefónica Digital states: “The TV experience usually starts in a lean- back situation and then the customer PVR and ‘home can move to lean-forward if there is something that is catching their eye, vs cloud’ stepping up to enriched experiences, companion devices, catch-up and In a white paper he authored that recommendations, for example. That partly looks at Pay TV versus Smart feeling of something happening, that TV, Hamish McPharlin, Director you can look at, is only provided by at Decipher Media Research, called linear TV.” the absence of PVR on Smart TVs He says this applies to mul- a big and damaging omission. “Our tiscreen as well. “When customers FutureMedia research shows that, Bruce McClelland, ARRIS want to take their TV experience to after live broadcast, the most com- other screens it is not in the format pelling features that a TV device can & Video at Vodafone says PVR is a must-have function in any market Catch-up TV via the STB with BSkyB of set-top boxes that can decode of canned content; they want to rep- offer are live pause and record.” As where the service already exists. And HEVC but these are coming. Furgus- licate the linear TV experience by Decipher has noted, these functions however it is made available, whether son reckons the complete ecosystem, having access to linear content.” are all closely related to, and reliant Futuresource Consulting says 4K using home or network recording, from camera lens to television screen, Even when people are not upon, broadcast TV. the functionality must be closely in- has a 2-3 year incubation period will be ready to support meaningful watching according to the schedules, Lucendo de Gregorio says, “It tegrated with the rest of the service deployments of UHD services dur- their viewing can be driven by the is crystal clear by now that PVR in- ahead and is on track to become so consumers can find everything ing 2015. multichannel offer. Sanz at ONO creases customer satisfaction and a significant technology segment in one place. This includes content Ben Schwarz at CTOi Con- points to how linear TV is responsi- stickiness. It is one of the elements search. HDTV. After much fanfare, 3D has HD television, and which is now sulting is another commentator who ble for the most popular time-shifted that add value to Pay TV.” As broadband connections had to endure some body blows re- working on UHD with the HEVC thinks UHD is the real thing. “3D in viewing because people are recording Offering her personal views, improve, a key industry debate cently as the BBC announced it was compression standard, believes UHD the channels on their PVR. “Custom- Christine Mitchell, Head of Video is whether this crucial function- putting 3D on hold and ESPN de- will be universally enjoyed in time, ers do not want to be constrained by Content, Consumer Home, Access ality can be supported from the cided to discontinue ESPN 3D at the making it the next HDTV rather cloud, in the form of network PVR. end of the year. than 3DTV. “The quality of the ex- John Civiletto, Executive Director Paul Gagnon, Director, North perience makes this a significant step TV is responsible for the most of Technology Architecture at Cox American TV Research for Display- forward for the consumer. It is a very Communications, the U.S. ca- Search, cites a long list of reasons for immersive experience,” he says. popular time-shifted viewing ble operator, told Connected TV why 3D has shown no meaningful His colleague, Carl Furgusson, because people are recording the Summit in May that the economics growth in North America. The most Head of Business Development, TV channels on their PVR important is cost; 3D as a feature still Compression at Ericsson, predicts carries a big premium. “The aver- that first generation real-time HEVC age 3D premium for a 55 inch TV in encoders will deliver UHD at 15- North America was more than 40% 36Mbps. By the second generation in Q1 2013, almost exactly the same bandwidth demands will be down as it was in Q1 2011,” he observes. to 10-24Mbps for live broadcast con- Dr Giles Wilson, Head of TV tent. On-demand content will need Compression Business at Ericsson, a less because you can take longer to company whose encoders paved the encode it (non real-time encoding). way for standard-definition and then We need a new generation Christy Thomas, Alcatel-Lucent DIRECTV’s DVR server

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In issues.” The answer, therefore, is a hy- over broadband that is passed via other cases, where the cost of con- brid of cloud and home storage. the home Wi-Fi router, without any The multiscreen on-demand ser- nectivity is lower, storage in the The way operators provide ac- intervention by the in-home equip- vice made available by Telecom cloud becomes the more attractive cess to PVR content is part of a much ment. If you wanted to get rid of the Italia is called Cubovision and is model. There will be pull and push wider technology debate about the primary set-top box (or DVR) in a available on Smart TVs, connected over time in this debate. The tipping role of the cloud and the customer home then this is how all television Blu-ray players, PCs, games con- point is based on the cost of connec- premise gateway. Pay TV providers could be delivered, including to TV soles, smartphones and tablets. It is also available through a dedi- tivity more than the cost of storage.” also need to decide the best way to sets. The decoding and content secu- cated streaming device in an of- Charles Cerino, the President deliver their TV Everywhere mul- rity requirements would then be tak- fer called ‘Cubovision-ready’. For of MoCA and former VP at Comcast, tiscreen offers to laptops, tablets en care of by an app inside a Smart EUR 9.99 per month consumers points out that as a consumer, local and smartphones around the home. TV or game console. can watch 30 on-demand ‘chan- storage gives you guaranteed per- Meanwhile there is a debate about The other option for multi- nels’ via the ‘STB’ plus another six manent access. “Cloud storage has whether you can remove Pay TV op- screen devices is to take the broadcast Multiscreen in the home boosts loyalty devices. This fee includes free cus- an expiration date, which might be erator STBs from the home and in- TV feeds into the STB/DVR, which tomer care. two weeks from now. At that point stead stream video to apps in Smart then acts as a processing hub and the content is no longer available be- TVs, which is the ultimate CPE ver- gateway, repurposing the content cause the content owner has pulled sus cloud debate. into forms that are acceptable to the the rights on that.” multiscreen devices and then routing His company is firmly in fa- Lucendo de Gregorio at vour of the gateway redistribution them around the home network as IP Telefónica Digital believes local hard- can manage the experience at home. model when it comes to feeding mul- video. If the primary operator STB ware could be successfully substitut- In conclusion, he says, “I think the tiple televisions and multiscreen de- is removed in favour of Smart TV ed by network services that support more cloud we have, the more gate- vices. When it comes to PVR, Bristow apps then there is no equivalent to way we will have. This is not gateway says one benefit of taking content this gateway function and all content versus cloud.” from the local hard drive is that you going around the customer premise Paul Bristow, VP Strategy, can skirt around any cloud rights is- begins as a multiscreen feed, in effect. Consumer Experience and Middle- sues. It is also easier to guarantee the Key issues that shape this de- ware at ADB, bemoans the ‘cloud QoE. “You have a much better con- bate are the reliability of delivery, the pushers’ who assume there is infinite nection to the hard drive in your availability of content for the differ- reliable bandwidth to the home. He home than to the cloud,” he argues. ent distribution scenarios, and the dismisses the concept of Smart TV ARRIS, which now includes extent to which you can manage (or other connected TV) apps as a the former Motorola Home business, and guarantee the customer expe- replacement for the primary STB or is preparing for a hybrid world where rience. The storage debate has lit- DVR on the grounds that it would we have powerful gateway devices in tle relevance when feeding tablets, greatly diminish the customer expe- the home and cheaper thin client sec- smartphones or laptops but clearly rience. Unreliable video streams, lack ondary STBs but then a decade-long network PVR becomes a necessity of insight into what happens in the migration of secondary device func- if you rely on Smart TVs as the only home, and a cumbersome navigation tions into the cloud. customer premise equipment. paradigm, where consumers have to Bruce McClelland, Group In June Guilhem Poussot, go in and out of apps to reach con- President, Products & Services at Head of Connected Devices at tent, are among the reasons given. ARRIS, has seen a shift towards Vodafone, noted the cost considera- tions for shipping gateways versus upgrading the cloud infrastructure. “I think the more cloud we have, He sees the attractions of the cloud but thinks a gateway is an important the more gateway we will have. Home networking thanks to STMicroelectronics means by which Pay TV operators This is not gateway versus cloud.”

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How SoftAtHome sees the connected home “operator-controlled second and third room STBs will co-exist with CE devices, all of them connected to the home gateway.” Paul Bristow will only reveal Pay TV to dominate in its own sub- some of the details about how it scriber homes despite the growth of works. “We are using a combination Smart TVs. The consulting firm says of capabilities inside the set-top box operators will use these devices to ef- and inside the mobile device to ma- fectively piggy-back on the Smart TV nipulate the broadcast bit stream so revolution. “They will do this by put- that by the time it arrives at the player ting their home network apps on any in the mobile device it can be played.” smart screen,” it explains. The client-side processing is per- This could effect where people formed within the TV Everywhere access ‘player’ services. “It also has app downloaded from the Pay TV implications for the ability of Pay Kevin Nolan, Strategy Analytics operator. ADB is now developing TV channels to project themselves on a bedroom zapper STB can be such apps for customers. in a multi-room environment,” the utilized by the living room PVR, for Bristow says these TVE apps company says. “We forecast that pay example. PVR content is made avail- behave like a virtual set-top box. “Our channels will increase their share of able on other TVs and to multiscreen role is to provide a secure, trusted en- total viewing, with both live chan- devices. vironment for the Pay TV experience nel and PVR viewing projected into In order to feed tablets or to come through. That means having every room.” smartphones the STB or DVR must a gateway device that can distribute Maybe DIRECTV, the U.S. sat- be able to perform CA to DRM the broadcast content and a combi- ellite operator, provides a pointer to translations and the equivalent of nation of STBs acting as clients and the future Pay TV home architecture. cloud-based thinking over the last managed (operator-controlled) transcoding to ensure the video is providing a great experience, which It provides a whole-home DVR ser- 12 months, especially when it comes The connected and unmanaged (OTT) services. It playable on the receive device. The we provide, and also apps for the tab- vice that uses a single DVR server to to storage and UI functions. “This then delivers both types of services ‘equivalent to transcoding’ refers to lets and smartphones.” share content with its own IP zapper could provide an alternative to do- entertainment through the home network to clients a technique that ADB has developed Nigel Walley, MD at Decipher set-top boxes and a small but growing things on a heavy client architec- ranging from IP set-tops to smart- for homes where new gateways with has been arguing that the connected ing number of compatible connected ture but for the next three years or so home phones, tablets and Smart TVs. “We transcoder chips are not yet present. PVR is the device that will enable TV devices, including Samsung and we will see pretty powerful devices STMicroelectronics provides the believe both operator-controlled in the home with their own storage, chipsets that support the in-device second and third room STBs will streaming and transcoding,” he com- video processing and connectivity co-exist with CE devices, all of them ments. needed for the multimedia gateway connected to the home gateway,” he Ben Schwarz says the most redistribution model, plus the re- confirms. likely architecture for the future Pay ceive/decode SoC solutions for basic ADB provides gateway func- TV home is a gateway device feeding zapper boxes that will act as clients tionality through software that can multiple IP clients, which could be on an entertainment home network. reside in powerful new multi-tuner operator STBs or CE devices bought Mustapha Bouraoui, Vice President devices or within set-top boxes that in retail by the customer. “Either the Marketing & Applications EMEA already exist in a connected customer gateway will get more intelligent or for the company, outlines the role of home. This means customers can de- the STB will get more network savvy,” the multimedia gateway as seen at a ploy advanced whole-home services he suggests. “But even if the cloud can growing number of operators. immediately if they need to. The tun- greatly enrich services to the home, This device bridges the Wide ers on any STB or DVR that reside on there will be a role for a central device Area Network (WAN) and the home the home network can be treated as in the home for the foreseeable future.” network where the WAN delivers a shared resource. Even a DTT tuner Virgin Media customers can use tablets to watch or control TV

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years as proof that there is a long life Decipher has been arguing ahead for this device category. He reckons multiscreen will boost the that the connected PVR is the market as operators deploy gateways Making DVR device that will enable Pay TV to that can serve PCs, tablets and other sharing secure dominate in its own subscriber devices. Where the ‘Operator as an App’ DVR sharing to multiscreen de- homes is being considered seriously it is the vices, rather than just to second- kind of virtual STB app pioneered soon Sony Smart TVs. into home gateways provided by ary set-top boxes, could be one of by TeliaSonera and Samsung, where The DIRECTV Pay TV experi- platform operators rather than into the next big service innovations. the operator interface launches au- ence is ported to the CE devices using televisions provided by CE manufac- It is something that ACCESS has tomatically and remains the default an application that provides the same turers. He pointed to the difficulty of been addressing, harnessing its environment for the customer unless features you would expect if there managing QoS when feeding apps NetFront Living Connect DLNA they choose to leave it. TeliaSonera is technology and making use of was a set-top box attached, including across an unmanaged network, and delivering a fully managed, multicast DTCP-IP link protection to enable full programme guide and of course the fact that only sub-sets of content IPTV offer to Samsung Smart TVs in A Samsung 2013 Smart TV in the Decipher labs greater operator/studio control the PVR functions. The operator en- are available via apps, rather than full some customer homes and the iden- over content once it leaves a local vironment is launched automatical- packages, due to rights issues. tical service to other homes that use DVR drive. ly; this is not an app store experience Perhaps more importantly, he STBs. “Connected devices do not ACCESS and Verimatrix an- where you go to the Smart TV portal pointed out that operators who re- There may be exceptional rea- replace set-top boxes; they nounced a pre-integrated solu- to find DIRECTV. “It is DVR with- move STBs are limited in what they tion earlier this year that covers sons for giving up the primary STB, out a DVR,” notes Alan Smith, Senior can do by the devices built by third- minimize the number that you CA, DRM and secure DLNA redis- however. Due to competitive pres- Product Manager at DIRECTV. parties. This hardware is outside tribution, including any necessary sures, Swisscom expects that it will need” In another reminder of why their control. “Connected devices do decryption and re-encryption in- eventually have to give away a 100 Where operator STBs and CE and content security functions of multiroom is so important, Smith not replace set-top boxes; they mini- side secure zones on chipsets on channel television service, bundled devices co-exist as clients on a home an STB. notes that the core business for his mize the number that you need,” was gateway devices. Verimatrix calls with broadband. This probably ex- entertainment network, the STBs There are important efforts to company is still viewing on the TV, his conclusion. it the ViewRight Gateway solu- plains why the IPTV provider is lead- could become smaller over time. We reduce the cost of STBs and gateways tion and it also covers the redis- something people will pay for. “The Arnaud Bensaid, VP Market- ing the hunt in Europe for an STB already have set-back boxes (which and these could have a bearing on the tribution of linear content. television set is still the social heart ing at SoftAtHome, which provides alternative. The likelihood is that the are small enough to hide on the back future role of these devices. Zenterio The ACCESS part of this of the house. People predominantly home operating platforms for con- telco would deliver its free service of a television – ADB introduced has an interesting solution to make solution is CA agnostic but the watch television in the main room vergent digital home services, points via connected TV apps and provide these years ago) and there is growing STBs easier and cheaper to manage, companies are jointly marketing and most still consume television to IHS Screen Digest forecasts for re- STBs for higher-tier customers. interest in HDMI dongles that con- for example. The company provides the productized pre-integration. in linear form. They want to watch cord STB shipments in the next two tain the essential tuning, decoding its own Linux OS that it is porting Joerg Eggink, Product Director, football on the big screen if they have Connected Home at ACCESS, says onto different makes of set-top box. that option.” one of the primary requirements The aim is to create a homogeneous There is a growing number is device domain control, so op- device environment where all the of platform operators who believe erators can decide which devices, STBs in a network run the same OS. that eventually they can replace sec- and how many, the Pay TV con- Then there is RDK, the Ref- ond and third room STBs with apps, tent is distributed to. erence Design Kit initiative led by in what is termed the ‘Operator as Comcast, which is expected to re- an App’ model. DIRECTV is one of duce costs and time-to-market for them. But there is little support for STBs and gateways, including those the idea of removing operator-sup- Vice President of TV Technology at delivering multiscreen viewing ex- plied Customer Premise Equipment S3 Group, which provides industrial- periences around the home. As one altogether. scale CPE testing, including for the example of how this is already mak- At this year’s Connected TV interoperability between gateways ing a difference, STMicroelectronics Summit, Daniel Simmons, Principal and multiscreen devices, RDK re- has pre-integrated RDK with its Orly Analyst, TV Technology at IHS pro- duces the time required on software family system-on-chip, reducing in- vided a list of what he sees as the flaws stack development. tegration time for customers. in the ‘Operator as an App’ model, “RDK aims to standardise the According to Philip Brennan, and why primary STBs will merge Mustapha Bouraoui, STMicroelectronics base platform of the future STB while The Verimatrix ViewRight Gateway for secure multiscreen sharing

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because RDK will help make “The multi-screen home STBs cheaper, it could secure environment now requires their role as thin clients on the in excess of 5,000 individual operator home network. functional test cases in the lab o box has a problem so we are coming Alcatel-Lucent Velocix includes net- to ensure a good Q E.” to fix it. But if the CE industry puts work-side management software provide support and guidance.” assistance.” that onboard then yes, we can work that takes the resource allocation de- Complexity can be viewed as He adds: “Quality, reliability with them.” cisions back from the client devices. an opportunity as customers will and the usability of services is a key ADB’s Bristow dislikes the at- This means you can set policies and be grateful to the company that element if you want to win market titude, inherent in the ‘Operator as then dynamically control session re- makes everything work for them. share and avoid competing on price. an App’ versus STB debate, that set- quests. As a use case example, if there Paul Bristow suggests that the more We believe that all these elements ef- top boxes are a Capex burden rather is limited bandwidth in the home, a screens there are where people view fect a customer’s willingness to pay than an investment. He says you only Smart TV can be given priority over Pay TV, the stickier the service should and we are leveraging them to sus- need to prevent a few customer care a smartphone. In practice this can become. “If you want to swap pro- tain ARPU, maintaining our premi- Nigel Walley, MD, Decipher Balázs Birck, Magyar Telekom calls before hardware devices start mean limiting the number of ABR viders you are not just changing what um price positioning in the market.” paying for themselves. If you can bit rate profiles that the smartphone happens in the living room now, but allowing operators to control and a seamless multi-screen experience,” anticipate problems you can prevent is allowed to access. changing what happens everywhere. differentiate on the User Experience. he says. “There also needs to be an customer care calls and when calls do Christy Thomas, Director Does the multiroom DVR service Cheaper STBs, faster, is the promise. increased focus on interoperability Conclusion happen it is easier to pinpoint prob- Business Strategy at Alcatel-Lucent, at Provider X work as well as mine? One major advantage is that leading testing of the product and applica- lems and work out remotely how you notes that this management solu- People will have to make a bigger The outlook looks pretty good for chipset vendors are investing in RDK, tion. The multi-screen home envi- fix them, then reduce the chances of tion is designed for operator TV leap of faith than they do today when Pay TV operators and a good deal making sure the drivers they develop ronment now requires in excess of them happening again. Everywhere content and where the changing providers.” better than it did three years ago, but are compliant with the RDK. This 5,000 individual functional test cases ADB provides the Epicentro operator has its own CDN. It only Telecom Italia sees a big op- there is no room for complacency. allows STB OEMs to have the RDK in the lab to ensure a good QoE.” PMP suite of remote management takes effect when there are conten- portunity in providing a quality ser- Various consultants are predicting software layer up and running on A spokesman at NC+ in applications to support the best tion issues inside the home but when vice from a trusted brand. Pier Luigi Smart TV consolidation around their new STBs very quickly.” Poland says ease of use and reliabil- possible customer experience. Any there is competition for bandwidth it Gardini, Consumer Marketing Fixed Android, Microsoft Windows TV or He adds that because RDK ity are key factors in the success of gateway solution must also manage overrules the greedy ABR clients and Offer Director, explains: “Italians maybe even iOS. That could sharpen will help make STBs cheaper, it could multiscreen around the home. “And resources when different screens are decides the allocation of resources trust our brand’s tradition. Quality competition between the Pay TV and secure their role as thin clients on the we do believe we deliver it. However, competing for services, Bristow adds. based on the best total outcome for of service means that a service works, open CE ecosystems. Netflix is intent operator home network. we sometimes face limitations be- This includes practical issues like tell- household customer satisfaction. on becoming a new HBO except, for yond our control. As customers can it is easy to use, well designed and ing customers that they cannot watch Service providers know they now at least, outside the Pay TV uni- use their own routers, access points attractive. That is absolutely a key a channel on their tablet because too will get the customer care calls for verse. and cabling, quite often these suffer differentiator. We have a good repu- Ensuring good many other screens are being used. failures in a TV Everywhere viewing Catch-up TV is still from technical problems. We have to tation for quality and for technical Until now, resource allocation session on a CE client, so reliability QoE has been a weakness of the OTT/ is crucial. That means there is a fo- Supporters of the multimedia gate- cloud delivery model for multiscreen. cus on interoperability and as John way model say it provides the Quality Adaptive bit rate streaming hands Maguire, Director of Strategy and of Experience guarantees that cloud over control of bit rate allocation to Marketing, TV Technology at S3 delivery cannot. Charles Cerino at the client devices. Each device then Group points out, this puts an em- MoCA argues that “unless the CE in- attempts to get the best bit rate it can, phasis on testing. dustry wants to put some telemetry which means they all compete with “Interoperability is critical. in every device they build, to tell you each other. There is good work going on at the how good the data connection is, you This is about to change, standards body level, like Home cannot work with that model. You though. Roland Mestric, Solution Grid Forum’s G.hn standard, to in- need to know when the set-top box Marketing for IP Video at Alcatel- crease the degree of interoperability is unhappy. You want to be proactive, Lucent, points out that the latest between the different transmission telling the customer that their set-top generation of CDN technology from systems, which we see as crucial for Velocix CDNs can help improve QoE in the home

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“The trick is to do what you do well across different platforms and devices and so defend your territory as the company that bills the credit card every month.” are raising their prices. “You choose a supermarket be- “If you look at young people cause their stores are nearer or they that don’t have Pay TV, most tried are priced better or they have the best it and left rather than never tried it. customer service,” Mitchell points Javier Lucendo de Gregorio, Telefónica Digital But one-third never tried it and that out. is significant because it is a much Balázs Birck, Head of Product dominated by the terrestrial broad- higher rate than among older adults. Development & Innovation at casters, never more than a tap away The problem with these consumers is Magyar Telekom, highlights the pow- on tablets. And the free-to-air plat- that they don’t seem to buy into the er of broadcast, the need for relevant forms have also raised their game value proposition of Pay TV.” on-demand services and the oppor- with next-generation solutions of For the young adults who left, tunity that multiscreen and OTT their own, offering good UIs and a price adjustment might be needed gives operators to increase their bun- companion apps. to get them back. Nobody is really dle, so exploiting an existing strength. John Barrett at Parks Associates catering for the low end of the Pay “The Pay TV industry is good at bun- has a warning about pricing for Pay TV market anymore, Barrett explains, dling; it is our core competence so we TV. He says cord cutting is more especially since the migration from need to create one core offering that about economics than anything else. analogue to digital. is easy for customers to digest with- “In the U.S. lots of people try Pay TV Younger consumers, accord- out having to educate them,” he says. but cancel because the price goes up ing to Parks Associates research, do Steve Christian, VP Marketing and the reason the prices are going not have quite the same connection at Verimatrix, whose content protec- up is because the content providers and loyalty to television that their tion solutions are helping a number parents have and their grandparents of service providers extend their had, when TV was the in-home en- reach to multiscreen devices, says the tertainment rather than one of the aim should be to provide universal options. Barrett says you can then access rights to content, whatever start considering the way that free or screen you are using. “That is the role low-priced Internet video can tip the of a good service provider and it is scales towards cancellation. why people pay their money to them,” For those consumers who can he says. afford Pay TV, the connected home He thinks the ‘Complete is the key to remaining at the centre Entertainer’ is a nice tagline for oper- of their world. Christine Mitchell at ators. “The trick is to do what you do Vodafone points out that you can of- well across different platforms and ten find the same content in multiple devices and so defend your territory places, and this puts the emphasis on as the company that bills the credit the whole customer experience. As card every month. That is the bottom an operator you need to give people line – literally. It’s the billing relation- a reason to use you in the same way ship. And bundling is a key aspect of that supermarkets fight to sell the what a Pay TV operator has provided Vassilis Seferedis, Samsung same branded food on their shelves. and continues to deliver successfully.”

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