How mid-size US Cable Operators can compete in this new era of TV services?
July 5, 2019
Today, American cable operators face increasing pressure when it comes to their TV offerings. Cord cutters are switching to virtual multichannel video programming distributor (vMVPD) competitors such as Sling, DirectTV Now and FuboTV. Many are even doubling down by using SVOD services such as Netflix, Hulu and Amazon Prime Video. The pressure promises to intensify in the coming months with newcomers Disney and Apple entering the fray. Even the last bastion of national sporting events is being distributed over-the-top (OTT) right now.
Despite losing viewers, the cost of content rights remains high while TV services margins are steadily decreasing. Conversely, broadband and data are driving revenue in new and dynamic ways. Service providers are now forced to take defensive positions in the TV market, limit their investment and turn their focus to pure connectivity offers (enhancement of the home Wi-Fi, 10G plan, etc.).
I personally think that despite this cable operators are in the best position to offer the best TV experiences in the U.S. Let me try to explain my view. I will sometimes play devil’s advocate to highlight the most popular counter-arguments echoed in the industry. By doing so I will seek to demonstrate that, by choosing the right path cable operators can achieve this.
So, how can American cable operators move forward in such an environment? They must modernize their TV infrastructure to compete.
In order to win back the hearts of lost customers, operators first need to find the right technology in order to compete at the same level as their rivals listed above.
First, to simply and efficiently reach any device, service providers must transition to IP video delivery. The reception devices can be traditionally managed STBs, but also any Bring-You-Own-Device (BYOD) that the customer may want to use (Roku, Amazon Fire, Smart TVs, video games consoles or even laptops and phones/tablets). If operators combine IP and HTTP, they can reach all screens in an on-net or off-net way, which is pretty useful if there’s a will to build a service that can be used anywhere – like any OTT offering.
Unfortunately, using IP on its own is insufficient. Cable operators need to use Adaptive-Bitrate (ABR) streaming protocols, such as DASH or HLS, to easily adapt streaming quality based on a customer’s available bandwidth. One additional advantage of ABR is the personalization of the streaming experience. By using the concept of manifest file, DASH and HLS can create a unique stream for each region, each home or even each customer.
What’s the hold-up? Making any changes to existing TV infrastructure is scary.
For the time being, several challenges remain in the race for the future dominance of the television market. Benching broadcast in favor of HTTP essentially replaces a highly scalable technology with one that is natively point-to-point. Since HTTP uses unicast, it must be scaled based on the number of users, whereas broadcast scales based on the number of channels. As a result, HTTP will likely consume a big piece of the broadband bandwidth. This is concerning if you consider broadband to be your main source of revenue.
Additionally, existing TV platforms are staples of many American households and continue to prove their worth as a time-tested service. They also include many additional features that are not available yet on OTT (emergency alerting systems, blackouts, and simultaneous substitution in the case of Canada). When transitioning to new infrastructure, operators must account for these differences and ensure additional features are not lost.
While maintaining functionality is important, it is equally important to understand the very obvious flaws embedded in the HTTP ABR experience, which are relying on DASH and HLS. Any experienced user of OTT pure players services can attest some misadventures.
Originally designed for the Open Internet, the protocols require large buffers on the player side, which create high latency that starts at 30-40 seconds after broadcast and may increase depending on the number of freezes experienced by the end user. I can tell you how mad I was during the last soccer World Cup when, as a French person living in the US, I was receiving Whatsapp texts from friends in France celebrating goals before they happened in front of my eyes.
The quality of the viewing experience is also variable. Buffering and delayed start-up times can occur if the streaming server is not physically close enough. Issues with HTTP ABR also arise when live-streaming on two side-by-side screens. The streams can become desynchronized, which is especially inconvenient when operators intentionally target highly social businesses such as bars or restaurants. Finally, end-users are incredibly reliant on local PVR – but is it possible to replace that with a new TV platform? These are the main concerns faced by operators when envisioning the new generation of television.
So why are cable operators different? They have all the ingredients necessary to win the TV race.
By owning their own infrastructure, it is actually very easy for operators to prioritize the traffic they want inside their network. The new TV platform feeds can be part of this symbiotic ecosystem, which has obvious benefits for guaranteeing both the feeds’ bandwidth and quality. OTT offerings will have to rely on CDN services, along with their unpredictability and variable volume costs.
In fact, controlling the home gateway and Wi-Fi will become a decisive advantage for operators, which can then leverage the CPU, storage and bandwidth available in the home for their own TV service. This is one area in which OTT players will never be able to compete.
Moreover, by having a direct relationship with the end customer – often for years – operators maintain an unparalleled advantage when it comes to proposing content and creating specific experiences based on location, hobbies or social profile (gender, family status etc.). They can then leverage this to build a completely personalized TV experience for their customers.
Ultimately, because service providers have dealt with content providers and broadcasters for decades, they have an easy way to monetize their new infrastructure. They are the only ones able to provide the local content people are looking for. They can also local cache content, and be in a win-win situation where they find allies to counter pure OTT players and aggregators.
How can cable operators win? Choosing the right technology is the boost needed to win the race.
The combination of assets listed above with the right HTTP ABR technology can truly allow cable operators to out-compete OTT services and even out-perform vMPVDs.
Broadpeak recommends deploying a regular OTT platform composed of the following traditional building blocks:
- OTT transcoders to create multi-bitrates ATS
- Origin to package in DASH/HLS, encryption using Widevine/Fairplay, recording for delinearized TV such as Cloud PVR, Catch Up and Start-Over/Pause TV
- Cache streaming servers
- Service Platform with a web background/culture
- Android STB
To be a real competitor in the future, Broadpeak also suggests adding two major components:
- CMAF combined with CTE: this new ABR container permits very low video fragments
- Multicast ABR: the only technology that allows operators to replicate broadcast advantages in HTTP ABR
If recommendations are used, the results will exceed expectations of even the most demanding of cord-cutters! Cable operators will be able to offer:
- A TV service that is always on and uninterrupted, even during peak bandwidth since multicast ABR will be there to absorb any high traffic volume (remember the boxing fight disasters, the mano e mano between Tiger Woods and Phil Mickelson not delivered, and so many other examples of disappointments coming from OTT?)
- A multi-screen offering with the same latency as broadcast, even (and especially!) for sport events as CMAF/CTE reduces buffering considerably. In parallel, vMVPD will always lag behind broadcast, with events occurring later than notifications from Twitter.
- A pristine quality for TV services on any screen because a managed network can easily guarantee the bandwidth for multicast ABR. OTT offers will always face buffering wheels when CDN partners experience difficulties.
- A perfect synchronization between all screens in the local network, enabled by the local multicast ABR agent that controls the start of each session.
Broadpeak is your ideal partner in this race.
Implementing the plan described above is fairly simple, as it doesn’t need to impact the existing DOCSIS network deployed, which is already compatible with IP and multicast. It will reduce costs by replacing CAS with DRM, and expensive STBs with cheaper boxes. It will unify the headend by creating one, unified platform responsible for video delivery on any screen, and for any kind of service. To conclude, it’s a straight-forward migration path towards implementing full IP while maintaining the many benefits of broadcast.
Broadpeak can help make this plan become a reality. It ‘s the only vendor in the market experienced in delivering multicast ABR technology, and is the only vendor that has a CMAF/CTE end-to-end delivery chain. We have a multi-skilled local workforce in the U.S., ranging from Denver, New York, and Indianapolis to as far south as Houston and Miami.
Contact us today to explore in detail how we can help you build the best TV experience in the market.