By Fred Dawson
March 20, 2013 – Connected TV platforms are gaining ground as targets for premium TV service operators in various initiatives around the world, thanks in part to advances in technology that are making it easier for distributors to satisfy rights holders’ requirements.
While the ability to deliver pay TV services directly to smart TVs and IP set-tops without incurring the usual pay TV set-top costs would seem to hold a lot of appeal to MVPDs (multichannel video programming distributors), there are formidable barriers to progress on this front having to do with securing content rights, cutting mutually beneficial deals with CE manufacturers, accommodating the simultaneous delivery of services in IP over broadband with traditional service delivery and the inefficiencies of developing service templates for every brand of smart TV and IP set-top.
Nonetheless, as Michael Lantz, CEO of TV app supplier Accedo notes, as technology makes it easier to get past these hurdles key players in the market are responding. “The trends vary from country to country depending on market structure, content rights and strategies among the major distributors in each market, but it is clear that we will see an increased amount of pay TV providers launching smart TV applications,” Lantz says in a recent article he wrote for various trade publications.
“In the short term, the main driver for the pay TV providers will be to improve subscriber loyalty, and the long-term benefit will be an increased reach for a lower subscriber acquisition cost,” Lantz says. “Close partnerships between TV manufacturers and pay TV operators will emerge in some markets to promote new offerings for mutual benefit.”
It’s been a long time coming and has a long way to go, but with Time Warner Cable’s recent agreement to deliver its live and on-demand content to Roku-connected TVs, even U.S. operators appear to be taking a more serious look at the connected-TV options after some false starts two years ago. But the early action is mostly abroad.
One new case in point is South Korea’s LG U+, a provider of mobile and fixed broadband service that has been delivering pay TV over broadband for some time and now has been certified by Korea’s Telecommunications Technology Association to deliver 1080p quality service to smart TVs supplied by LG Electronics and Samsung. A big factor in this move is the efficiency achieved by the LG U+ encoding supplier Envivio with recent advances on its Muse platform, which means less bandwidth is required to handle the unicast streams going out to large-screen smart TVs.
The LG U+ move follows the firm’s launch late last year of a new version of its pay TV service, dubbed LG u+tv G, which augmented its 126-channel live TV and on-demand offering with Google TV apps and content for delivery to a special set-top box. LG U+, an amalgam of LG Telecom, LG Dacom and LG Powercom within LG Group, which also controls LG Electronics, is the nation’s second largest LTE mobile provider and competes in pay TV with Korea Telecom and several cable companies.
The 1080p capability, utilizing a de-interlacing technique to convert the pay TV channels to the higher quality progressive scan HD, has been introduced on the LG u+tv G set-top as well as the smart TVs. Hyunil Moon, general manager of the LG U+ IPTV business team, credits Envivio for providing the means to distribute these services at quality levels suited to TV viewing.
“The Envivio encoders were selected because they provided the best video quality at any given bitrate, on any device,” he says. The choice of Envivio to support LG u+tv G “was reinforced by the fact that our previous implementation of multiscreen with the Envivio systems has proven to be an extremely reliable, robust architecture.”
Telstra of Australia is another Asia-Pacific powerhouse that’s now delivering its premium TV service, “BigPond TV,” to Samsung and LG smart TVs, also with the help of Envivio encoding technology. “These are live and on-demand services to primary screens,” says Arnaud Perrier, vice president of solutions marketing at Envivio, in reference to both LG U+ and Telstra. “They’re really ahead of the game.”
But similar moves are afoot elsewhere, Perrier says, including even North America where the pace of adoption to delivery of premium content to connected TVs has been slower than Asia and Europe. “We have a number of customers with smart TV strategies in various stages of implementation,” Perrier says. “It’s definitely something we’re focusing on.”
A key trend that could streamline efficiencies associated with MVPDs’ ability to stream premium content over broadband is operators’ interest in moving away from traditional hardware-based encoding systems in their headends to software-based systems. Envivio and other software-based suppliers have been pitching the idea for some time, but now it’s starting to catch on with big North American MVPDs as well as operators in other parts of the world, says Envivio president and CEO Julien Signès.
“The majority of our commercial engagements began with people wanting to distribute their service to iPads and other connected devices,” Signès says. “But now people are looking for a converged solution, and having seen what the benefits are with our solution in the IP domain they realize they can bring their traditional TV and multiscreen into a single headend. We’ve seen this happening internationally and now more and more we’re seeing it happen domestically as well.”
Signès says several factors play into MVPDs’ interest in the Envivio encoding platform for these converged headend scenarios, starting with the encoding efficiencies it has achieved by building its own encoders from the ground up rather than relying on commercially available codecs. “We’re able to differentiate the processing,” he states. This allows the company to leverage its software expertise to maximize the various extensions that are part of the coding standards, including MPEG-2, MPEG-4 H.264 and the new HEVC (High Efficiency Video Coding) platform. By virtue of its support for IP, ASI and SD/HD-SDI interfaces along with redundant power supplies and hot-swappable nodes, the new platform can be used for all premium service environments, he notes.
“We look at all the latest chipsets used in encoding and find that, on average, we’re 20 percent more efficient,” Signès says, noting this is the case whether the Muse system is running on the high-density Envivio 4Caster G4 server or on Intel-based commercial servers. “Now we’ve gone into statistical multiplexing and other aspects of the traditional TV encoding domain with unique algorithms that can be applied on MPEG-2 and MPEG-4 encoding to create greater efficiencies for a converged headend that supports multiscreen service as well.” From a cable operator perspective, this means they can squeeze more HD streams into their QAMs (quadrature amplitude modulators) than before.
Indeed, he adds, totally apart from the multiscreen requirements, many operators are shifting to the Envivio platform owing to their inability to support encoding requirements for vast increases in the volumes of linear and VOD content delivered from their headends without undertaking major expansions in the capacity of legacy hardware systems. “They realize they can do a better job of handling these increased traffic loads using our technology,” he says.
The argument for a software-based system is also gaining strength by virtue of operators’ recognition that HEVC and the new ultra-high HD resolution format 4K are looming on the horizon, requiring still another potential headend transition that would entail introducing new hardware if operators remained committed to legacy solutions. By moving now to consolidate headend operations on the Envivio platform, operators will have assurance they can introduce HEVC and 4K without hardware upgrades, Signès says.
“These new requirements, which will start impacting operators in 2014 and 2015, represent just another software upgrade for us,” he notes. “We’re already working with operators with new trials in these areas. They’re tired of having to buy new headends, and so the idea of a software-based transition to a datacenter approach to headend operations on HP, IBM, Cisco and other server blades has become very appealing.”
As advances supporting converged headends make it easier for operators to deliver HD-quality content directly to connected TVs Accedo has implemented a new app template to expedite service providers’ and programmers’ efforts along these lines. Accedo’s TV Everywhere Solution integrates content distribution and management platforms with the application environment for any given device to support access to subscription content by authenticated users, says David Adams, vice president of corporate development for Accedo.
“We find everybody is trying to launch on all these device platforms, but it’s very hard trying to bring your content into these domains one app at a time,” Adams says. “We were doing the same thing over and over again with customization for each customer to distribute into iOS, Android, various smart TVs, Xbox – it didn’t make sense. We saw we could package the solution as a template and allow some customization on top to lower the costs and time to market.”
The move to streamline the integration of a premium TV service into the connected TV environment comes amid an intensification of discussions between service providers and CE manufacturers who are interested in playing the set-top role for operators, Adams says. But he acknowledges the business issues are tough to resolve.
“Microsoft is telling operators, ‘We have 22 million Xbox Live customers, so we can cut a deal with you where you download your app and we become your set-top box,’” he says. “But now the operator has to negotiate with Microsoft or whoever on the economics, and all these companies are trying to make a living. As soon as you say, ‘I’m a cable operator, all these guys say they need a piece of the action.’”
But with the growing leverage that comes with being able to offer ever more compelling content from OTT providers, the smart TV and connected set-top suppliers are making it hard for operators to walk away from such deals. “We haven’t seen the operators in the U.S. take on these challenges the way things are happening in Europe and Asia,” Adams says. “But the interest is there, so it may be just a matter of time.”