Big Video Opportunities in Small Cable

While major U.S. MSOs such as Comcast, Charter Communications and Altice USA push ahead with their own, internally developed next-generation video platforms, smaller, independent cable operators are turning to technology partners that have developed new, IP-based multiscreen systems tailored to suit their needs.

The need or desire to build and launch new pay TV platforms has created a sizable window opportunity for a mix of vendors that include Evolution Digital, MobiTV and TiVo.

There’s no one-size-fits all approach for these hundreds of tier 2/tier 3 operators. Some are looking to transition to managed, internet protocol-based services that deliver full-freight programming packages. Others are looking to build and launch over-the-top offerings that can deliver slimmed-down pay TV bundles to broadband-only customers.

Some Will Team With vMVPDs

There’s also a wildcard option emerging. Rather than building an OTT-delivered skinny bundle and hammering out those programming deals, some operators want to work with virtual multichannel video programing distributors that have already stood up and launched such services.

Consolidated Communications is one such example, teaming with fuboTV, the sports-oriented OTT TV service, to offer a pay TV option to broadband-only customers. That deal also links back to fuboTV’s agreement with the National Cable Television Cooperative, which has a similar arrangement with PlayStation Vue, Sony’s OTT-based pay TV offering.

Whichever path is chosen, interest and discussions (and even deployments) involving new pay TV options are starting to heat up following last year’s budget season.

“Those budgetary discussions are now turning into formal quotations, and we expect deployments in the 2018 time period,” Evolution Digital president and chief technology officer Brent Smith said.

The industry is at the early stage of this process. Smith characterized 2017 as the “starting point” of the IP video transition in the small-to-midsized MSO market. Several providers (about two dozen for Evolution) have been starting off with IP-delivered VOD to hybrid boxes that still use QAM transport to deliver linear TV.

VOD is the “logical first step” into the IP video world, Smith said. It helps MSOs increase capacity in part because they can deliver content in the more bandwidth-efficient MPEG-4 format while also boosting the overall user experience.

Meanwhile, 2018 is shaping up to be a “banner year” for OTT-delivered skinny bundles among indie cable operators, while others are starting to look at a full IPTV transition, he said.

“We’re seeing a significant number of RFPs,” or requests for proposal, Smith said.

For the OTT/skinny bundle opportunity, Evolution recently introduced EVUNow!, an app-based offering that can run on retail streaming devices as well as an operator-supplied Android TV box that would be leased to customers and default to the cable operator’s video service when the device is switched on, while still supporting other apps, like Netflix and Hulu, that are available through Google Play.

That OTT option is new territory for many operators, so negotiations with programmers are sensitive. Still, Evolution has some field trials of EVU-Now! underway and expects to follow with commercial deployments “very soon,” Smith said.

Other smaller operators are mulling a transition to a fully managed IPTV service supporting their full spectrum of channels, but those projects take longer and will likely emerge in phases. That’s partly because the full lineup requires an all-IP device in the home, plus more network capacity because the MSO would likely have to simulcast the entire service in IP while still supporting its legacy video platform.

“The advantage of the skinny bundle [OTT] solution is that it’s something that could be stood up quickly … and address the cord-shavers,” Smith said. “It’s more of a complementary service to an operator’s core video strategy.”

The video opportunity in the tier 2/tier 3 cable operator sector has also drawn in new products and platforms from TiVo and MobiTV.

TiVo, which already works with a multitude of midsized MSOs including GCI, Mediacom Communications and Midco, will help operators make the leap to IPTV with a new app-based platform that can run on retail devices such as Apple TV and Amazon Fire TV, as well as on a client that runs on an MSO-managed Android TV device.

TiVo demoed its new approach earlier this month at CES and believes it will help partners start to pivot away from QAM-based digital video distribution systems and move to an IP-based video architecture for VOD, DVR services and linear TV. The new approach also bakes in TiVo’s new fourth-generation user experience (formerly code-named “Hydra”).

MobiTV Joins Indie Cable Scene

Somewhat newer to the small cable scene is MobiTV, which obtained a long-in-the-works agreement to help the NCTC’s indie operator members migrate to a next-generation, IP-based platform that eschews traditional set-tops.

The agreement, focused on the MobiTV Connect multiscreen video platform, extends beyond a typical “hunting license” with the NCTC, as it includes components that establish a deeper business relationship between the co-op and MobiTV.

Smith sees increased competition for video deals with tier 2/3 operators as a “validation of our philosophy that we’ve had for the last three to four years.”

Although going all-IP is a future end game for many MSOs in this group, Smith also stressed the importance of implementing strategies centered on hybrid QAM/IP systems to put operators into positon to make that migration.

“If the operator is trying to resuscitate the video business, [it’s] going to need something that bridges legacy and IP,” Smith said.