One case in point can be seen in the momentum building around the cloud-based switched digital video (SDV) solution pioneered by Adara Technologies, which not only greatly reduces the costs of this bandwidth-saving approach to adding HD services but also opens a low-cost path to IP migration and on-demand services. Adara co-founder and CEO Joseph Nucara reports the firm’s SDV platform, as first described in July (p. 27), is rapidly gaining acceptance among smaller operators across North America, including most recently Cass Cable TV, which serves 16,000 subscribers in central Illinois.
Moving on a separate track, IP hosted services provider Clearleap, leveraging a new relationship with billing systems supplier Great Lakes Data Systems (GLDS), is offering a turnkey approach to launching OTT on-demand services that lowers costs of delivering branded VOD services and helps mitigate the negative effects of off-net OTT video. A small Arizona operator, Orbitel, is putting the Clearleap service into play in conjunction with an agreement with connected-device and aggregated service provider Roku, which has been touting its desire to work with operators to help them create self-branded VOD services.
In essence, these new developments offer an early glimpse of how innovative IP-based hosted solutions could change the business prospects for network owners operating in smaller markets and, eventually, for companies operating in larger markets as well. As Clearleap CTO John Carlucci notes, the expanded cloud-based service streaming capabilities now on offer from his firm provide ways for large as well as small NSPs to cost effectively enhance their service offerings in primary and secondary markets alike.
“Four of the top five service providers are using our media services,” Carlucci says, in reference to Clearleap’s foundation IP Content Management solution, which allows service providers to upload content from anywhere and publish that content over IP to their legacy VOD and linear channel headend systems. For example, Verizon is using that Clearleap platform to aggregate and publish hyper local coverage of sports events, news and weather for distribution to local subscribers and, in some cases, to its VOD system for access by all FiOS TV customers.
Now, with its development of IP-based Stream On Demand, Clearleap has given operators a turnkey means either to start up a VOD service or, in the case of larger operators, enhance legacy offerings with additions from OTT providers like Netflix and Hulu. “We think the value we bring with our streaming service will be harvested by large as well as small operators,” Carlucci says. “The larger operators will use different pieces to fill in and complement what they’re doing with other suppliers, such as to facilitate delivery of programming to connected devices.”
Clearleap has teamed with GLDS, a leading supplier of billing, subscriber management and provisioning systems in the lower tier markets, to make it easy for GLDS customers to add the cloud-based VOD service to their existing operations. “Our integration with Clearleap ensures smooth subscriber authorization, transaction processing and a single, integrated billing solution, allowing our broadband operator customers to cost-effectively offer new advanced on-demand and personalized services,” says GLDS President Garrick Russell.
Now serving hundreds of operators with 200,000 or fewer subscribers, GLDS well understands the cost and risk factors that hold many of them back from getting on board with on-demand services, Russell says. “Our message to them now is that, with the Clearleap option, they can provide a high-quality service within their existing back-office domain at much lower costs,” he adds. But he acknowledges that while the “check writers” at these companies well understand the advantages, the idea of moving to a hosted IP-based service that relies on IP set-tops and connected TVs to deliver VOD is a harder sell with operations people.
“Right now we’re seeing slow adoption,” Russell says. ”But everybody knows Netflix is taking over their networks with OTT on-demand that eats up bandwidth and nets them nothing.”
A development that could go a long way toward igniting faster adoption is the FCC’s newly adopted Net Neutrality rules, which make clear that while service providers cannot block traffic, they can charge for high levels of usage either on the basis of incremental consumption over established caps or through data rate-based pricing tiers. Either way, operators now can safely begin charging for the high levels of usage that characterize consumption of Netflix and other OTT video content, which creates an incentive for their customers to avoid those fees by getting their on-demand content over the SP’s managed network.
“You can allow the traffic from Clearleap to pass free of charge in terms of bandwidth usage, because it’s part of your premium content offering,” Russell notes. “Even if you’re metering usage on OTT, you’re still not getting compensation from those services.”
Adds Carlucci: “People have to take into account the implications of not monetizing traffic when it gets to the levels we’re seeing with Netflix. Looking at usage research, we see that Netflix is consuming 40 percent of operators’ broadband bandwidth when they don’t offer a VOD service of their own. When they do, the Netflix traffic share drops to about 20 percent.”
Clearleap and GLDS are hoping the example set by Orbitel Communications as the first announced customer for the new integrated solution will inspire other NSPs to follow suit. Orbitel, operating in Maricopa, Ariz. with 9,500 subscribers, was able to quickly deploy a VOD service that offers unlimited hours and titles of on-demand content over its existing network to branded applications on the Roku box, says Orbitel president and CEO Keith Kirkman.
Orbitel achieved the launch “at a low cost capital investment with nominal storage costs and without the need to add any additional personal,” resulting in “a tremendous advantage in terms of ROI and time to market,” Kirkman adds. “Our subscribers now have access to a vast array of on-demand movies, TV, local and Web video – all aggregated, authenticated and managed in one place.”
Because it’s an IP-based service the company will be able to employ the Clearleap multi-format publishing service to reach multiple types of devices, Carlucci notes. “Orbitel is walking before they run, but they’re going in that direction,” he says.
The Clearleap platform is designed to work with a variety of aggregation and device partners so that the OTT content supplied to the operator from an aggregator becomes part of the user’s navigation experience within the UI environment of the device supplier. In a demonstration with the Roku box, an LG Electronics connected TV and an iPad at last month’s SCTE Expo in Atlanta, Clearleap showed how the UI sets the operator’s service as the first point of navigation while also giving subscribers visibility into the device supplier’s OTT content options.
Meanwhile, as the cloud-based Clearleap initiative allows operators who have been thwarted from offering legacy VOD to leapfrog to next-generation multiscreen service, Adara’s cloud-based approach to supporting SDV overcomes long-standing barriers to freeing up bandwidth for such services. For example, says Cass Cable TV president Gerald Gill, the Adara solution will enable Cass to maintain and cap its Motorola headend and digital set-top box investment while simultaneously delivering all its channels in HD using Cisco SDV technology and advanced Web-connected set-tops.
“Over the past two years, we looked at a number of upgrade options, including
analog reclamation using DTAs (digital terminal adapters) in particular,” Gill says. “But the huge investment required versus the ultimate benefit to us and our customers did not come close to meeting even a reasonable threshold.”
In contrast, he continues, the Adara solution “delivers an order of magnitude more, at a fraction of the cost. None of the other options were even close from every important perspective, including cost, time-to-market, effective capacity increase, new services and revenues enabled, future-proofing and IPTV migration.”
To achieve these cost and operational benefits Adara provides the digital control system and applications servers that run the locally installed universal session resource managers, SDV QAMs and SDV client software on Cisco 4600 and 8600 set-tops. These resources and the engineering expertise Adara provides can be shared across hundreds of cable systems serving millions of subscribers, thereby lowering the costs for each participating operator, says Joseph Nucara.
“We cut about 80 percent of the costs of implementing SDV and 100 percent of the complications and deliver 100 percent of the benefits,” he says. “All of a sudden the economics are turned on its head, and SDV becomes the obvious route to take.”
In the typical implementation of the hosted SDV model an operator might have a 550 MHz plant offering a combination of analog and digital SD channels, where the SD channels are delivered through 256 QAMs controlled by a legacy digital Motorola or Cisco headend video processing and conditional access system. All it takes to simulcast the entire lineup in HD is to free up eight 6 MHz channels for installation of the Cisco SDV QAMs, Nucara says.
The fact that Cass Cable as a “Moto shop” embraced the solution provides a strong validation to Nucara’s assertion that old assumptions don’t apply in this situation. “As a Moto shop, it never occurred to us to look at a Cisco-based solution,” says Tom Allen, vice president and chief operating officer at Cass. Not only is its past investment in Motorola “completely secure,” he adds. “We are now in a position to offer hundreds of HD channels, whole home DVR, and many more advanced services, and this is only the beginning.”
With several other customers announced prior to Cass, momentum is building rapidly, Nucara says. “All told we have about 80 customers either in the pipeline or already deployed,” he says. “You can expect a new customer announcement coming out about every other month from now on.”
Capabilities on the Adara system are set to expand dramatically with its conversion to the Cisco VideoScape platform in the year ahead, Nucara adds, noting that Cisco acquisitions of Extend Media and other entities have transformed the TV Everywhere paradigm to include multiple devices and linear as well as on-demand content. “VideoScape is already being used for TVE by many operators and content providers,” he says. “We’ll be fully integrated with VideoScape during the first half of 2012.”