Pay-TV operators are facing growing pressure from OTT operators, and bundled offerings from telecom companies. These companies must provide new application experiences that can reach the market quickly and be delivered consistently across devices.
A key technology is cloud TV and virtualisation – i.e., moving set-top box (STB) functionality online, into the cloud. This way, operators can deliver new services at online speeds, without distributing new STBs. However, opinions differ about which applications would benefit the most from cloud technology, and how much STB functionality can be moved to the cloud.
Digital TV Europe has surveyed more than 150 video industry stakeholders from over 40 countries, to discover their views on the above subjects. A report on the survey is available for free, and can be downloaded from http://tinyurl.com/ouywm6e.
Some of the salient points from the report are found below:
The report indicated that, while cloud TV is important, the humble STB will not be replaced in the near future. Although many operators believe that TV will eventually move online, they are continuing to invest in advanced STB platforms. Essentially, the cloud is currently perceived as a complement, not competitor, to STBs in the home today, although this may change.
42% of respondents believe that more and more services will be delivered from the cloud – but that operators will continue to invest in STB platforms and deploy STBs. By contrast, 21% believe that the majority of pay-TV services will be delivered from the cloud in the future, and that operators will progressively move away from STB investments. 16% see the cloud as ‘the future of pay-TV’. Only 4% believe that the cloud will play a marginal role in pay-TV’s future.
A ‘consistent, advanced multiscreen user guide’, which integrates OTT, multiscreen and linear content, is seen as a key app for cloud TV. As well as this, operators are seeking to migrate DVR functionality to the cloud – few want to deploy HDD-enabled boxes. 36% currently offer these products, with ‘a much smaller’ number planning to do so over the next 12 months. Just over 20% offer cloud- or network-based DVR, with a similar number planning to do so over the next 12 months.
DTVE concluded that TV operators are well aware of cloud TV (more than 95% claimed awareness of what the term meant), but do not view it as a cure-all. Operators want to match the speed and innovation displayed by OTT providers. They see the cloud as more useful to extend their technical reach, than to extend the range of content that they offer. Personalisation is also of interest.
Analyst Comment
Personally, I have a feeling that the cloud will drive a lot of simpler STBs out of the market over time. There are big advantages for operators in avoiding the need for big platform upgrades. You can try new things in the cloud much more easily and that may drive innovation in interfaces and ways of consuming content. Of course, the satellite and terrestrial TV operators are in a more difficult position than cable or IPTV suppliers as they can’t really offer the customisation in video feeds that those that also supply broadband can do.
However, behind the reluctance to give up the STB business is “The battle for the remote”. It remains the case that whoever owns the remote that the user prefers has, by far, the best chance of capturing the viewer’s “extra” spending on PPV etc.
One of the trends in recent years has been to extend the functionality of STBs to go beyond simply video viewing. If you want to exploit a home gateway with security, home automation etc, then you will need a box for that purpose. A virtual STB may not be able to match the functionality of a dedicated box, if only because of the need to be closely integrated into a home network and have multiple radios. (BR)
