Cloud technology and OTT are quietly transforming the pay-TV industry. While the set-top box (STB) has evolved over the years to make on-demand television a convenient reality for viewers, service providers can now offer many of the same services across all screens and at a lower cost using the cloud. The flexibility of cloud technology, and its potential to enable broadcasters to scale their resources according to demand, mean that more providers are considering how best to adopt it into their solutions. The idea of pay-TV delivered from the cloud is no longer merely blue sky thinking.
For the record
One of the key functions of the STB that can be optimised by cloud technology is video recording. Like in-home personal video recorder (PVR) STBs, cloud-based network PVR (nPVR) services enable consumers to watch content when and where they want. The key difference between cloud and STBs is that in an nPVR service, the physical recording is made, not in the user’s home on their STB, but remotely in the cloud. Service providers can even pass this flexibility onto consumers by offering subscribers the option to pay extra for more hours of recording; something you cannot do with an STB model.
An interface race
Pay-TV operators are also embracing a cloud-based user interface (UI) model, leveraging HTML5 and Javascript that provides several advantages over the traditional practice of hosting the UI natively in the STB. A cloud-based UI enables operators to quickly respond to changes in viewing habits, enabling rapid software-based updates and on-line deployments without the need for more complex STB upgrades. The same features available on the STB can also be delivered to new platforms, such as tablets and smartphones. This is significant because consumers are shown to want consistency in their UI and navigation experience.
The silver lining
But while regulatory hurdles are still holding back some providers from fully adopting nPVR, this is changing. For instance, legislation in France now provides a legal framework that encourages the deployment of cloud PVR solutions. Rights holders are also starting to realise that the cloud offers new interesting opportunities to monetise content with services aimed at a new generation of TV viewers. Advertisers too are seeing the potential in cloud. As cloud-based TV consumption increases, so too is demand for cloud advertising. The potential to personalise adverts to the viewer’s interests enables broadcasters to generate higher revenues, especially on specialty, long-tail channels. Viewer behaviour has changed and cloud-based systems can give content providers more control either by controlling ad skipping or by enabling them to charge a premium for targeting. Those that move fast will reap the benefits of emerging cloud-based technologies.
Moving STB functionality, such as PVR, to the cloud and adding VOD services meet a growing demand for multiscreen TV. The cloud enables providers to scale their investment to match user growth rather than make a large upfront investment. This can lead to overall cost reductions, thus enabling providers to offer more flexible prices. Beyond the economic benefits, providers can offer consumers a more personal, seamless and social experience across each of their devices.
In an age of television where consumers have more choice about where, when and how they watch TV, providers are increasingly turning to more flexible and scalable solutions to satisfy existing customers and attract new subscribers. Adding cloud capabilities doesn’t mean replacing existing services but building a service that utilises its speed and scalability to deploy new solutions and features faster than ever before.
