Putting Pay TV Into the OTT Zone

As an executive at AT&T’s U-verse division, Jeff Weber helped to spearhead the telco’s push into the era of IPTV. Today, as the CEO of ZoneTV, he’s again looking to take the lead as pay TV providers develop strategies to mix their traditional video platform with increasingly popular over-the-top apps and services.

ZoneTV, formerly known as ES3, cut its teeth by supplying games and other apps running on Mediaroom, the Microsoft-developed IPTV platform that Ericsson acquired in September of 2013. That focus helped the Toronto-based company secure footholds with several telcos, including AT&T, Telefónica, MTS, Hawaiian Telecom, Telus, Frontier Communications and CenturyLink.

Weber, who was named ZoneTV’s CEO last October, said the company is now expanding beyond Mediaroom to pursue deals with other types of pay TV providers, including cable MSOs and satellite-TV operators.

“We’ve improved our platform and capabilities to jump in from a digital content and a media-first perspective,” he said.

Rather than focusing on games and other apps that can run on Mediaroom, ZoneTV is using its digital content deals to create “dynamic channels” that can be tightly integrated into an MVPD’s set-top box-based programming guide. The idea is to assemble a curated blend of digital content that, when combined with the guide, looks and feels like a linear channel, he said.

In addition to curating content, ZoneTV’s “magic wand” feature lets users essentially reprogram a digital channel based on viewing history. “We’re programming a channel exclusively for you based on what you’re doing,” Weber said.

ZoneTV, which in November scored a $4.1 million seed round led by Best Funds, believes its approach will be attractive to both digital content producers and MVPDs.

“We’re opening up a new distribution window for these [digital] content providers,” Weber said. “It’s through the pay TV service, so it’s an audience that they can’t get at almost any other way … it’s an incremental distribution opportunity for them.”

As for its pitch to MVPDs, ZoneTV believes it will be increasingly important for them to offer access to over-the-top video and apps within their own environments.

Several cable operators have already integrated Netflix and other OTT apps on leased set-top boxes. Comcast, meanwhile, offers Watchable, an ad-based OTT service, on its X1 set-tops, as well as via mobile apps.

Verizon’s new OTT service, go90, is currently offered on iOS and Android mobile devices, but the expectation is that it will eventually offer that content on its FiOS TV platform as well.

And ActiveVideo, a cloud-powered vendor now co-owned by Charter Communications and Arris, enables its partners to bring OTT services such as YouTube to settops via its new CloudTV StreamCast system.

ZoneTV’s business model is largely a revenue-sharing arrangement with its digital content and pay TV partners. “There’s really low risk for a pay TV operator,” Weber said.

ZoneTV has yet to reveal its digital content partners, but Weber said those agreements, as well as new deals with some major MVPDs, will be disclosed later this year.

Earlier this month, ZoneTV announced a deal to distribute Touch-Fit TV Georges St-Pierre, a fitness-focused app that features the mixed martial arts champion.

“2016 will be a significant year as we broaden out beyond Mediaroom,” Weber said.