ActiveVideo Networks, the technology company behind Charter’s Spectrum Guide cloud-based video delivery system, is expanding its act for pay TV operators who want to enable their customers to use Android-based OTT apps.

The San Jose, California-based tech company, jointly purchased in 2015 by Charter and Arris for $135 million, has announced the launch of AppCloud, a new cloud based video delivery system that allows users to tap into OTT apps based on Android APK, no matter how much in the way of computing resources their set-top has.

In Europe and, increasingly in the U.S., pay TV operators have been sating the subscribers’ desire for OTT apps by deploying thin-client, Android TV-based hybrid QAM/IP set-tops, which allow operators to deliver managed network services while simultaneously allowing the customer to tap into any OTT app found in the Google Play store.

Debuting at the IBC Show in Amsterdam this week, ActiveVideo’s AppCloud takes the concept one step further — now, the operator doesn't even have to replace the legacy set-tops.

ActiveVideo’s technology is based on having all app processing done in the cloud — what appears on the user’s TV is actually MPEG video virtualization fo the user interface generated in the cloud … and not the actual user interface.

“There are thousands of Android-based TV apps available today, and with ActiveVideo AppCloud, we bring an immediate breadth of TV apps to the operator,” said Jeff Miller, ActiveVideo CEO, in a statement. “Service providers can...maintain direct relationships with their subscribers, expand the services they offer, and drive new digital advertising approaches with the ActiveVideo AppCloud framework.

Notably, Charter has been in the market with Spectrum Guide since 2014. The cable operator put out a press release Thursday reminding everyone that ActiveVideo’s technology is already available in “millions” of its subscribers' homes. (In its IBC press release, ActiveVideo noted that it is already “delivering virtualized content in 18 million set-top devices.)

“Spectrum Guide has been deployed to millions of set-top boxes across our footprint providing a reliable, modern navigation experience, and virtualization has been key to that success,” said Jake Perlman, senior VP of software development at Charter. “Working with ActiveVideo allowed us to realize the promises of virtualization, deploy a world-class, next-generation TV service at scale and have a flexible platform that supports new features and services.”

While Cisco Systems was identified at last week's CES gadgetfest as a “key” supplier of Charter Communications’ new "Worldbox” through 2015, the market “overreacted” to the news, according to Bob Stanzione, Arris’s chairman and CEO.

“The conclusion was jumped to that Cisco was going to take a big share of this Worldbox business,” Stanzione said Tuesday during an investor conference in New York put on by Needham & Company. Such an interpretation is "absolutely incorrect," he said. 

To be fair, Charter CEO Tom Rutledge stressed at last week’s Cisco presser in Las Vegas that the beauty of the Worldbox approach, which will use an “open” downloadable security platform from Cisco, is that it will allow the MSO to buy boxes from multiple suppliers that can be used in all systems that have implemented the new security system. He also brought up Arris by name as one of its STB suppliers, and mentioned that the new platform will also give Charter an opportunity to support devices sold at retail.

But concerns about Arris’s role with Worldbox came up during Stanzione’s talk, so he wanted to clear up that he expects Arris to have more than a fighting chance to be in the mix. Worldbox, he said, “levels that playing field” for set-tops. “Quite honestly, I don’t see this as changing the competitive dynamic in terms of our ability to sell CPE to Charter,” Stanzione said, noting that the company will have “equal opportunity to bid on the Worldbox, as any other competitor.”

And he said the technical specs around Worldbox aren’t “completely specified” yet, so there.

But it’s also understandable that last week’s announcement got the attention of Arris investors.

After all, it’s got some significant turf to protect. Arris, which became a fixture in the STB market after buying Motorola Home in April 2013 for $2.35 billion, held a leading 32% of the cable set-top market from a revenue standpoint in the third quarter of 2014, according to Infonetics Research.

Stanzione also addressed the role of ActiveVideo Networks, which will allow Charter to bring its new UI to all boxes – the new IP-capable Worldbox and millions of already-deployed set-tops that don’t speak IP.

Stanzione acknowledged that the approach will decrease the number of boxes Charter will need to buy, “but it doesn’t eliminate the need for new set-tops,” as older ones won't last forever and will still need to be replaced eventually.  Comcast, Arris’s biggest customer, has been conducting a small test with ActiveVideo in Chattanooga, Tenn., (for a VOD interface) but has not announced any plans to expand on it.

But Worldbox wasn’t the only topic. With earnings on the horizon, Arris is in a quiet period, but Stanzione reiterated that Arris is pushing ahead while four of its top five customers (AT&T, Comcast, Time Warner Cable, and Charter Communications) are all involved in mergers and acquisitions that will further consolidate the industry.

“I can only say business is good,” he said, but was hopeful that there will be an acceleration in spending in areas where Arris is involved when those deals get wrapped up.

He’s also bullish on the prospects of DOCSIS 3.1, noting that it will spark a “big replacement cycle” for CPE, as it did during cable’s move from DOCSIS 2.0 to DOCSIS 3.0, and will cause MSOs to update their network gear.

Stanzione also weighed in on the specter of broadband being reclassified under Title II, but said it was tough to predict its impact until it's known how heavy or light a hand will be applied. 

In the meantime, it does introduce a “subtle effect,” burdening Arris's customers to lawyer up and spend resources negotiating with regulators. Despite the rhetoric around Title II, Stanzione was confident that cable, telcos and satellite operators will still need to invest in their networks. 

Six months into a rollout of an apps platform that integrates YouTube with the set-top box, the percentage of available subs accessing the popular online video service via the STB UPC Hungary’s footprint has risen to 80%,  Arpad Jordan, CTO of UPC Central and Eastern Europe, said at the OTT World Summit in London, according to remarks supplied to Multichannel News.

As we noted in June, UPC Hungary, a unit of Liberty Global, is using ActiveVideo Networks’ CloudTV StreamCast system to deliver YouTube, Flickr, Picasa and other apps to legacy, non-IP boxes.  

According to Jordan, 80% of UPC Hungary customers who access YouTube at the set-top return for repeat views. He also estimated that the hardware cost to UPC Hungary for this functionality is less than 1 Euro per set-top.

UPC Hungary launched the effort in May on about 200,000 HD set-top boxes. In the coming months, the MSO plans to introduce it on another 250,000 standard-def boxes, which will complete the rollout to UPC Hungary’s installed base, he said.

Jordan touted the cloud-based approach, which gives UPC Hungary the ability to deliver advanced services to its full subscriber base without having to first deploy IP-capable devices.

“I think the beauty of this solution is 200,000 set-top boxes all overnight,” he said, according to the remarks supplied to us. “This is not like the usual OTT ramp up where you need to somehow distribute your devices or you need to deal with a very fragile or fragmented operating system or platform in general.” 

UPC Hungary, a unit of Liberty Global, is using a cloud-based delivery system from ActiveVideo Networks to deliver YouTube and a range of other apps to legacy set-tops that don’t speak the language of IP.

The operator, GigaOm reported Wednesday, is offering access to more than 20 apps, including YouTube, Google Maps, Picasa, Flickr, as well as games to its legacy boxes. According to an announcement made by UPC Hungary in May, the operator expects to enable the new feature, called UPC TV Apps, to all 1.5 million homes in its footprint by the end of 2014.

ActiveVideo chief marketing officer Murali Nemani followed up in this blog post that UPC Hungary is using the vendor’s CloudTV StreamCast platform to bring the entire YouTube experience, including its “Leanback” user interface, along with dozens of apps from Metrological that were originally written for Liberty Global’s high-end, IP-capable “Horizon” boxes --from the cloud to hundreds of thousands of legacy “D4A” set-top boxes that don’t speak IP.

Introduced in April, StreamCast is a new component for ActiveVideo’s CloudTV platform that converts user interfaces, video and other content from Web formats to formats that can be rendered and displayed by non-IP set-tops. That conversion and bridging process covers elements such as content protection and content delivery.

Liberty Global has not announced further plans to integrate YouTube on the set-top in other markets, but UPC's approach in Hungary comes into view as cable operators continue to seek out ways to blend OTT content with their traditional pay-TV offerings.

Of recent note, several operators, including Liberty Global’s Virgin Media unit in the U.K., Com Hem in Sweden, as well as RCN, Suddenlink Communications, Grande Communications, and Atlantic Broadband have integrated Netflix’s streaming service on IP-connected, TiVo-powered boxes they’re leasing to customers. Comcast, meanwhile, is using the IP capabilities of its X1 platform to integrate apps from sources such as Facebook and Instagram.

ActiveVideo, however, touts the fact that its cloud-based approach enables operators to deliver apps to both IP-capable and older, QAM-only devices.

“[W]hat really sets UPC Hungary’s YouTube deployment apart is this: the truly global potential of making online video content available on pay-TV systems at scale—without the cost and time-to-market obstacles of rolling out expensive new, PC-like STBs,” Murali wrote. “UPC Hungary’s success in bringing YouTube directly to D4A boxes has broader implications for Liberty Global and the pay-TV industry,” he added, noting that Liberty Global could use the same “virtualization of CPE functionality bring YouTube to its entire footprint of millions of D4A boxes throughout Europe and Latin America.”

UPC Hungary is the first announced customer for CloudTV StreamCast.  ActiveVideo’s customer roster includes Cablevision Systems, Charter Communications, Ziggo of the Netherlands, Time Warner Cable, Deutsche Telekom, and another Liberty Puerto Rico (another Liberty Global unit). Comcast, meanwhile, has been testing ActiveVideo for a VOD interface that runs on QAM-only boxes.