February 28, 2012 – Amid headline-grabbing changes in its front office lineup and cost-cutting staff reductions SeaChange International is quietly playing a global role in expediting MSOs’ transition to multiscreen services on a software foundation that frees operators from reliance on legacy set-top vendors.
With the multiscreen tide nearing tsunami strength cable operators are anxious to drive down costs of sustaining ever greater demand for IP-based content streams, which means they must find a way to introduce hybrid set-top gateways at the lowest possible prices. Ergo, there needs to be an influx of cable platform-compliant set-top providers who can leverage mass production cost savings to compete aggressively for cable business.
This is where SeaChange comes in. By providing set-top manufacturers like South Korea’s Humax the software mechanisms essential to operating seamlessly across the cable tru2way and IP domains, SeaChange is helping to expand the supply chain for cost-conscious purveyors of TV Everywhere (TVE) services, says Anthony Landamia, general manager for the home division at SeaChange.
“We do now truly have a complete end-to-end solution that encompasses every aspect of the strategies MSOs want to implement for moving TV from QAM (quadrature amplitude modulation) to IP,” Landamia declares. He says the company is working at multiple customer tiers, including MSOs, set-top providers and chipmakers, to infuse hardware with the software mechanisms that allow set-tops to execute whatever iteration of multiscreen whole-home service an operator might devise.
SeaChange, of course, is not alone in offering a set-top agnostic software platform aimed at supporting a transition from QAM-based to IP-based TV distribution. But it appears to be building momentum on its strengths in workflow convergence and tru2way knowhow at a moment when operators need absolute certainty that hybrid gateway solutions will perform flawlessly to deliver content and advanced applications seamlessly across all devices.
“MSOs see what they can do with our solution and are making known they want it,” Landamia says. “Set-top providers are coming to us and beating us up on how fast we can help them do a demo in a production environment. And we have Broadcom and other system-on-chip (SoC) makers saying, how fast can you work with us? Right now it’s hard to keep up with demand.”
The acceleration in uptake on the hybrid multiscreen service solution has left many people playing catch-up, including the MSOs themselves. SeaChange at last year’s NCTA Cable Show was quietly floating its ideas to test interest, demonstrating its middleware and universal navigation system on Technicolor set-tops.
Now, with strong market response to those concepts, SeaChange has gone public with its hybrid-support middleware, dubbed Nucleus, and with higher profile branding of its Nitro navigation system. “It’s really been an evolution of tru2way where the MSOs woke up and said, we want to be able to move to IP on these tru2way boxes,” says Chet Dagit, director of product management at SeaChange. “So we developed our solution to support that, which is allowing a lot of big OEM brand names to enter the cable market.”
The cable industry is moving on two tracks to bring IP-based programming to its subscribers. On the one hand, operators are developing Web portals like Comcast’s Xfinity to stream premium content directly from the Web. At the same time, they’re enabling conversion of QAM-based programming to IP either at the home gateway or at some other point in the HFC infrastructure.
The latter approach, by utilizing the managed cable network rather than the unmanaged Internet as the distribution medium, creates a means under existing licensing parameters of getting all subscription programming to connected IP devices in the home. In contrast, the over-the-top approach relies on specific licensing deals to enable streaming services that can compete with a growing lineup of OTT suppliers like Netflix, Amazon, Wal-Mart’s Vudu, Hulu, Best Buy’s CinemaNow and Apple’s iTunes.
Both modes, with service limited to authenticated cable subscribers, fall under the TV Everywhere umbrella. But it’s the availability of all programming to connected devices over the HFC managed network that represents cable’s (and telco TV providers’) biggest leg up over the pure Web plays, which so far are largely prevented from offering first-run TV and motion picture content. The one big advantage with the portal-based cable offerings is the licensing deals typically allow distribution to devices outside the home and, in some cases, are being negotiated to support offerings beyond the service providers’ franchise footprints.
However it’s offered, TVE, once viewed primarily as a value-add to keep subscribers engaged as multiscreen usage proliferates, is emerging as a major revenue driver for cable operators and program suppliers, according to Needham & Co. senior analyst Laura Martin. “We estimate that the roll-out of TV Everywhere over the next three to five years could add approximately $12B of revenue annually to the US television ecosystem,” Martin says in a recent bulletin.
“These dollars dwarf any near-term revenue streams from digital platforms (Hulu, YouTube, etc),” she adds. “Additionally, these are low risk dollars as adding services to the TV bundle suggests additional revenue rather than economic cannibalization.”
Ad revenues will comprise the biggest share of that $12 billion with about $10 billion going to content companies, Martin says, noting Time Warner and Disney are leading others in TVE rollouts. At the same time, TVE “could add approximately $1.7B per year of revenue to the cable, satellite and telco distributors owing to incremental pricing power driven by new services.”
With such benefits at hand the market is awash in solutions designed to give operators a converged means of managing distribution and advertising on content across all devices. In this managed service domain, hybrid gateways represent one major line of attack where QAM-delivered services are converted to IP for distribution along with OTT content to IP TVs, tablets, smartphones, game consoles and computers (see, for example, September issue, p. 1). Cloud-based solutions, designed to overcome the need to install new hybrid set-tops, are the other main line of attack (see January, p. 14).
The interest in cloud-based solutions to speed expanded coverage for multiscreen premium service is strong, acknowledges SeaChange’s Anthony Landamia. “A cloud-based version of what we’re offering is very much on our roadmap,” he says. “Very large operators have come to us and asked us to be the supplier of this technology for them.”
Indeed, the cloud versus hybrid gateway approaches are not at all mutually exclusive. A next-generation hybrid gateway, wherever it can be cost justified, offers the most advanced version of a multiscreen whole-home service. With the cloud version operators can extend some aspects of the offering to all subscribers as they wait for conditions to justify installation of more gateways.
One of the big non-traditional suppliers to jump into the cable set-top market employing the SeaChange platform is Humax, a global player with a big installed base of set-tops with DirecTV but not much penetration in North American cable. The company hopes that will change following debut of its new tru2way hybrid set-top at CES in January, says Albert Son, president of Humax Americas.
“The joint efforts with SeaChange on the Humax platform will be the launching point into the next-generation server-client markets,” Son says. He notes the new hybrid gateway is entering lab testing with a major U.S. MSO.
As demonstrated at CES, the gateway supports capabilities such as media sharing across multiple DLNA-enabled and IP-connected video devices, including Apple and Android tablets and smartphones as well as game consoles. The set-top box is powered by three Broadcom SoC processors – the BCM7425 Dual HD Transcoding, MoCA 2.0 Gateway SoC platform; the BCM3128 Full-Band Capture Multi-Receiver SoC; and the BCM3383 DOCSIS 3.0 cable gateway SoC.
One of the strengths SeaChange brings to the end-to-end multiscreen operations environment is its deep experience enabling workflow integration, going back to operators’ needs to tie together linear and on-demand programming with advanced advertising. Over time, the firm’s Adrenalin multiscreen video back office and client publishing system has become the linchpin to many next-generation service strategies, including the multiscreen Horizon service Liberty Global is rolling out in the Netherlands, Switzerland and Germany.
Adrenalin is designed with open interfaces to work with other vendors’ middleware and navigation systems, as is the case with the Liberty deployments. But, so far, the SeaChange Nucleus middleware and Nitro navigation systems are positioned to work solely with Adrenalin.
This is about to change, Landamia notes. “We understand some operators don’t want to use all three products,” he says. “Not everyone is going to take the Nitro front end, so we’ll allow Nucleus to interface with other UIs. And nothing stops us from customizing Nitro and Nucleus to another back office. We’re not showing that yet, but we’re developing that solution.”
Another key leverage point for the SeaChange solution set, which goes to the emerging monetization opportunity with multiscreen service, is its experience in advertising insertion and management. Last year the company introduced the SCTE 130-compliant Infusion Advanced Advertising Platform to provide a highly scalable means of on-the-fly insertion on linear programming across all devices. As previously reported (July, p. 16), Infusion supports up to 150,000 insertable channels from a single Web-centric datacenter with access to ad libraries that can scale to more than five million advertising assets.
Nucleus, unveiled in January, is the heart of the SeaChange end-to-end multiscreen service platform. Landamia says the middleware is capable of supporting multiple gateway configurations with multiple tuners for video, DOCSIS 3.0 and for OTT content along with support for MoCA, Ethernet and Wi-Fi interfaces. And the software can be configured on lightweight IP clients within the home that have a smaller footprint and no local tuners or storage.
Nucleus consists of two main components. The Nucleus Engine provides full control over STB functionality, including channel changes, VOD/DVR playback and trick mode; enables media sharing throughout the home via DLNA, and serves as the backend proxy to cache program event information and create an optimal subscriber experience