RDK - Digital TV Europe

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02/03/2015 14:59

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Digital TV Europe February/March 2015

Contents 10. The anniversary survey To celebrate Digital TV Europe’s 30th anniversary, we asked a panel of industry experts 30 penetrating questions about the future of TV.

18. RDK: the progress report The RDK software framework has won strong backing – not least from Liberty Global in Europe. With new extensions tackling fresh categories of device, can it fulfill its promise of bringing webspeed innovation to cable? Stuart Thomson reports.

24. Advances in orbit

18

The increasing trend towards IP-delivered video is changing the face of the broadcast industry, but what steps are the satellite operators taking to remain relevant? Andy McDonald reports.

30. Cable Congress 2015: the preview Cable Congress returns to Brussels this March with a packed line-up of speakers ready to discuss the latest developments in the European cable market.

31. NAB 2015: the preview With the NAB Show due to kick of at the Las Vegas Convention Centre on April 11, DTVE highlights some of the new innvoations that will be on display.

24 32

32. ANGA COM 2015: the preview Ahead of this year’s ANGA COM, the event’s managing director Peter Charissé talks to DTVE about the rise of online video, net neutrality and regulatory issues – just some of the topics that are likely to get people talking on the trade-show floor in June.

Regulars 2 This month 4 News digest 34 Technology 38 People 40 Final analysis

Visit us at www.digitaltveurope.net

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1 02/03/2015 19:49

This month > Editor’s note

Issue no 317 Published By:


The pay TV years

Informa Telecoms & Media Mortimer House 37-41 Mortimer Street London W1T 3JH Tel: +44 (0) 20 7017 5000 Fax: +44 (0) 20 7017 4953 Website: www.digitaltveurope.net Editor Stuart Thomson Tel: +44 (0) 20 7017 5314 Email: [email protected] Deputy Editor Andy McDonald Tel: +44 (0) 20 7017 5293 Email: [email protected] Contributing Editor Stewart Clarke Contributors Kate Bulkley, Andy Fry, Adrian Pennington, Adam Thomas, Anna Tobin, Jesse Whittock Correspondents France: Julien Alliot; Germany: Dieter Brockmeyer; Italy: Branislav Pekic Sales Director Patricia Arescy

Thirty

years is a long time in the TV world. Digital TV Europe – and its predecessor, Cable & Satellite Europe – have been around more or less since the dawn of European pay TV in the mid-1980s, with the creation of Canal+ in France, followed by the launch of Astra 1A, the first commercial direct-to-home satellite, and the home of Sky, at the end of that decade. The pay TV business has been transformed completely in the three decades since then, fuelled by the advent of digital and, subsequently, internet-based video. Milestones along the way have included the creation of a commercial cable business across territories, the launch of IPTV by telecom operators, the birth of HD (and the stillbirth of 3D TV), the emergence of over-the-top internet video and the creation of the smartphone and tablet. In our special 30th anniversary, rather than dwell on the glories of the past, however, we’ve asked a panel of experts from different parts of the business to take a look into the future, asking 30 questions covering the main topic areas currently of interest. The cable industry has been transformed in the 30 years of Digital TV Europe’s existence and European cable is now leading the dash for high-speed broadband as well as delivering innovative TV services. Ahead of March’s Cable Congress event in Brussels, we also look at the progress made by the industry in developing a single platform for advanced set-top boxes and other devices – the RDK. Satellite technology, which was behind much of the early growth of pay TV in Europe, is now sometimes seen as yesterday’s technology, as service providers look to deliver advanced IP-based on-demand services targeted at multiple devices. Also in this issue, we look at some of the ways in which satellite operators are innovating to ensure the continued relevance of their infrastructure. Elsewhere in this issue of Digital TV Europe, we talk to ANGA managing director Peter Charissé about some of the issues facing the German market ahead of the annual ANGA COM event as well as looking at some of the highlights of Cable Congress and the NAB Show. l

Tel: +44 (0) 20 7017 5320 Email: [email protected] Art Director Matthew Humberstone Publisher Tim Banham Printing Wyndeham Grange, West Sussex

SUBSCRIPTION HOTLINE INFORMA GROUP TEL: +44 (0) 207 017 5533

© 2015 Informa UK Ltd All rights reserved Reproduction without permission is prohibited

2 p02 Ed Note DTVE FebMar15v2st.indd 2

Stuart Thomson, Editor [email protected]


02/03/2015 19:43

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27/02/2015 11:15 2/26/2015 4:31:09 PM

News > digest


News digest > 4 Vivendi accepts Numericable-SFR offer > 5 Discovery plans Euro-OTT expansion > 6 Sawiris to take majority in Euronews > 8 FCC adopts strong net neutrality rules

Vivendi accepts Numericable-SFR offer for remaining stake By Stuart Thomson > Vivendi has accepted Numericable-SFR’s e3.9 billion offer to buy out its remaining stake in the company. The agreement took observers by surprise given that its value represents a considerable discount on the current price of Numericable-SFR shares. Vivendi said the sale of its 20% stake in Numericable-SFR to the company and its majority owner Altice would deliver a premium of 20% over the closing price of its shares when the sale of SFR was completed in November. It also noted that “the low level of liquidity in the Numericable-SFR shares would make a future exit under optimal conditions uncertain”. The deal means that Vivendi will have realised e17 billion from the sale of the telco in total. The company said it would re-

Belgium CAB > Belgacom TV gains Belgacom ended the fourth quarter with 1.593 million subscribers to its Proximus TV service, an 8.7% year-on-year increase. Announcing its fourth quarter and full-year results, the firm said that its decision to group all of its services under the Proximus brand last year had resulted in “strong operational results” with Belgacom’s mobile customer base and internet base also growing

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turn e5.7 billion to shareholders this year. Vivendi will pay out a e1 dividend for 2014 and plans a share buyback programme of approximately e2.7 billion. Reporting its full-year results, Vivendi said that pay TV unit Canal+ showed a solid increase in revenues thanks to the strength in its overseas activities, offset by a slowdown in France resulting from the VAT increase at the beginning of the year. The pay TV unit posted sales of e5.456 billion, up 2.7% or 0.4% at constant exchange rates. Canal+ had 15.3 million subscriptions at the end of the year, up 678,000 year-on-year,

year-on-year. The firm said that of its total TV base, 304,000 were multiple set-top box users and that quarter-over-quarter it added 35,000 TV customers thanks in part to a popular year-end Proximus promotion. Belgacom said that fourth-quarter 2014 TV revenue grew by 11.6% to e77 million, as a result of continued subscriber growth and TV-options such as football subscriptions and TV-replay. Proximus TV revenues for full year 2014 totalled e292 million, up 9.3% compared to 2013. In the quarter, TV average

thanks to a strong performance in Africa and Vietnam, as well as growth in France of its Canalplay SVoD offering. The total number of individual customers is now over 11 million, up from 10.4 million at the end of 2013. Vivendi posted revenues of just over e10 billion for the year, down by 1.4% year-on-year at constant exchange rates, EBITA was up 8.1% at constant exchange rates to e999 million. Credit rating agency Moody’s has meanwhile placed SFR-Numericable under review for downgrade following its joint offer with majority owner Altice to buy out Vivendi’s 20% stake in the company. Numericable-SFR intends to acquire half the stake through a share buyback programme, to be submitted to its general assembly by April 30. The other half is to be acquired by Altice France at the same time, with a payment to be made

no later than April next year. “Today’s rating action is prompted by significant uncertainties about the funding of the envisaged e1.95 billion share repurchase programme and its impact on Numericable-SFR’s liquidity, leverage and operational flexibility. Moody’s views the potential transaction as aggressive given that the company closed the large acquisition of SFR only recently and is still in the early stage of integrating the acquired asset,” the ratings agency said at the end of February. Separately, SFR-Numericable has launched a new quad-play offering under the Virgin Mobile brand, with a new box and a new TV service. The package comprises a TV Evolution decoder and a separate modem. The associated mobile offering incudes 20GB of 4G data for e15 a month for those who sign up by April 14.

revenue per user grew by 5.6% year-on-year to e20, driven by more TV options.

transaction, through their company W&W, Wouter Vandenhaute, CEO of De Vijver Media, and his business partner Erik Watté will keep 25% of the shares of De Vijver Media. Corelio will keep the remaining 25% of the shares in the company. Telenet, W&W and Corelio have given undertakings to guarantee that the channels of the company will remain available to other television providers to secure the green light. Telenet has also undertaken not to consolidate the activities of De Vijver Media.

CAB > Telenet green light The European Commission has granted approval for Liberty Global-backed Belgian cable operator Telenet to acquire a 50% stake in local programmer De Vijver Media. Telenet announced its deal to take the stake last June via an acquisition of Sanoma of Finland’s share for e26 million and an additional cash investment in the company of e32 million. After the


02/03/2015 20:17

News > digest


Germany CAB > Maxdome first Liberty Global-owned cable operator Unitymedia KabelBW is adding ProSiebenSat.1-owned on-demand service Maxdome to its TV offering, allowing Unitymedia KabelBW to subscribe to Maxdome directly as part of their bundle at a fixed monthly price. The SVoD content from Maxdome will be integrated into Unitymedia and KabelBW’s TV platform, available via its settop boxes and via its multi-screen service Horizon Go on PCs and mobile devices.

IPTV > VDSL boost for TV Deutsche Telekom saw strong growth for its domestic Entertain TV service in the fourth quarter and also saw a solid performance

from TV in its other European markets in 2014. Deutsche Telekom had 2.442 million IPTV and satellite TV customers in Germany at the end of the year, up 65,000 quarter-on-quarter and up 12.2% year-on-year. Demand for FTTH and VDSL broadband increased in the German market. In the fourth quarter, 323,000 customers opted for a fibre line, 143% more than in the prior year. Deutsche Telekom recorded particularly strong additions in the VDSL rollout areas, triggered by the market launch of 1.3 million vectoring households in the fourth quarter. The operator said that 40% of new VDSL customers were opting for Entertain. Telekom recorded 3.714 million TV customers from its activities in other European countries, up 44,000 quarter-on-quarter and up 6% year-on-year.

PROG > MTV in SVoD Play MTV has launched new international over-the-top apps, MTV Play and MTV Trax, in an effort to target millennials and adapt to “changing consumer viewing habits.” MTV Play is a VoD service featuring many of MTV’s most popular shows, while MTV Trax is a music streaming app designed for casual music consumers. MTV will launch MTV Play on March 5 with mobile network partners in Germany, Switzerland and Romania. Consumers with MTV Mobile branded tariffs will get free access to MTV Play, while others will be able to access the same content for e2.99 per month or e29.99 per annum. MTV is launching MTV Trax as a direct-to-consumer subscription service in the UK on March 3, through the App Store, Google Play or Windows Store.

Discovery plans European OTT expansion By Andy McDonald > Discovery Communications plans to expand its Nordic overthe-top service Dplay to more European markets this year and grow its online Eurosport Player by taking more sports rights. Speaking on Discovery’s fourth quarter earnings call, company president and CEO David Zaslav said that Discovery plans to acquire “specialty rights at a low cost” to strengthen its OTT Eurosport Player offering, and aims to deploy Dplay to additional markets outside Norway, Sweden, Finland and Denmark. Zaslav also said that while Discovery is committed to partnering with pay TV operators in the US to support TV Everywhere, if this doesn’t develop “the way it should” in years to come then channel providers may be forced to go direct to consumers.


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Zaslav: European OTT lessons for the US market.

“In Europe, we’ve gained subscriptions, valuable insights and a new marketing and sales platform with our own direct-to-consumer products. One is Dplay in the Nordics and the other is the Eurosport Player, which we distribute across the continent,” said Zaslav. “Those services have almost 0.25 million subscribers, bringing in an average of US$8 per month. Our European OTT offerings is giving us a growing revenue stream, a growing direct-to-consumer offering and valuable learnings that we can apply in the US and other markets.” The Discovery boss said that

the firm has seen spikes in signups for its subscription Eurosport OTT service ahead of major events like the Tour De France and the Australian Open, but this is “not affecting our viewership on Eurosport at all”. He said the extra coverage provided online appealed to ‘superfans.’ He highlighted sports and kids content as “probably the two areas that most lend themselves to a superfan and the direct-to-consumer [model]” and said there could be an opportunity to monetise this in Latin America. In terms of TV Everywhere, Zaslav said that the distribution deals Discovery signed last year with US partners including Suddenlink, Cablevision, NTTC and Mediacom, which was announced this week, all offer subscribers authenticated access to Discovery content inside and outside the home.

Events Cabsat 2015 Date: March 10-12 2015 Venue: Dubai World Trade Centre, UAE W: www.cabsat.com Cable Congress 2015 Date: March 11-13, 2015 Venue: The Square, Brussels, Belgium W: cablecongress.com Satellite 2015 Date: March 16-19, 2015 Venue: Walter E Washington Convention Centre, Washington DC, USA W: www.satshow.com NAB 2015 Date: April 11-16 2015 Venue: LVCC, Las Vegas, Nevada, USA W: www.nabshow.com MIP TV 2015 Date: April 13-16 2015 Venue: Palais des Festivals, Cannes, France W: www.miptv.com FT Digital Media Conference Date: April 28-29 2015 Venue: King’s Place, London, UK W: www.ft-live.com TV Connect Date: April 28-30 2015 Venue: ExCel, London, UK W: tvconnectevent.com Broadband TV Connect Asia (co-located with CDN Asia) Date: May 12-13 2015 Venue: Suntec, Singapore W: broadbandtvconnectasia.com ANGA COM 2015 Date: June 9-11 2015 Venue: Köln Messe, Cologne, Germany W: www.angacom.de

5 02/03/2015 20:17

News > digest


Global Wrap

Italy

The assets of OTT TV service Aereo have been sold to three buyers for a combined sum of under US$2 million (e1.8 million). This effectively brings to an end the story of Aereo, which went up against the US broadcasters in court over the right to stream their broadcast signals and lost last year. TiVo paid US$1 million for Aereo’s trademarks, domain names, and customer lists, while Alliance Technology Solutions took equipment and RPX Corp bought Aereo’s patents. Shipments of 4K TVs jumped by 699% year-on-year in 2014 to 11.6 million units, according to estimates by research firm Futuresource Consulting. The new research forecasts that by 2018, 100 million 4K sets will ship per annum, with 4K TV ownership to exceed 20% in leading markets. Former Hulu boss Jason Kilar claims his video venture, Vessel, could earn content creators up to 20-times as much as they get on ad-supported video sites. Speaking at the Code/ Media conference in California, Kilar said that Vessel, which launched in January in beta, allows content creators to get higher revenue than free sites. Nintendo has cancelled plans to launch its TVii service in Europe, citing unexpected challenges in localising the offering for different markets. There will be a five-fold increase in SVoD revenues across emerging markets between 2014-19, according to new research. Pyramid forecasts that cumulative emerging market SVoD revenues will total US$18.8 billion in a five-year period with markets in Asia Pacific and Latin America accounting for the bulk of that amount.

OTT > Wuaki TV launches


Movie and TV streaming service Wuaki.tv has launched in Italy, its fifth country launch to date. The rental and purchase VOD service aims to be in 15 European countries by late 2015. Wuaki is already available in Spain, the UK, France and Germany, and plans to add Ireland and Austria “in the coming months.” Wuaki.tv CEO Jacinto Roca said that the service “continues to grow exponentially” and is gaining “good acceptance” in Europe. The firm, which is owned by Japanese e-commerce giant Rakuten, closed 2014 with more than two million users in Europe, 400,000 of whom were in the UK. Wuaki posted year-onyear growth of 85% during 2014.

DTT > Mediaset for RaiWay Mediaset-owned digital-terrestrial tower business EI Towers is making a e1.22 billion bid to take control of the rival transmission business owned by public broadcaster Rai. EI Towers, in which private equity company BlackRock holds a minority stake, is offering e4.50 a share for RaiWay, including e3.13 in cash and 0.03 new EI Towers shares for each RaiWay share. The price represents a premium of 22% on the price of RaiWay shares as of February 23. RaiWay floated its stock in November last year. EI Towers said the acquisition would create a single major player in the market. The company said it would continue to ensure non-discriminatory access to all TV players. EI Towers’ bid comes shortly after Fininvest, the investment vehicle

of the family of former Italian prime minister Silvio Berlusconi, reduced its holding in Mediaset to about 30%. A move to take over Rai Way may be blocked by prime minister Matteo Renzi, who has said the state will not give up its majority control.

PROG > TI integrates TIM Telecom Italia is to buy out minority shareholders in the Telecom Italia Media (TIM) unit and integrate it with the parent organisation. The operation will be completed on a cash-free basis, with 0.66 new ordinary shares and 0.47 new savings shares in Telecom Italia being granted for each share in TIM. The operation is expected to be approved by the boards of both companies by March 19, with the merger to be completed by the third quarter.

Sawiris to take majority stake in Euronews By Stuart Thomson > London-based Egyptian telecoms magnate Naguib Sawiris is to take a majority stake in Euronews under a plan adopted by the international news broadcaster’s board. The news channel’s supervisory board has already approved a €35 million capital increase and authorised CEO Michael Peters to enter negotiations for 60 days for one of Sawiris’ investment vehicles to take a 53% stake, according to information obtained by French daily Le Figaro. Euronews is currently controlled by about 21 European public or state-owned broadcasters, with six channels owning 90%. Peters told AFP that the partners would put in place a new governing structure that would guarantee its continued operation in “the general Euro-

Sawiris: taking a 53% stake in Euronews.

pean interest” to public service shareholders and the EU. The broadcaster envisages that the governance structure would include the right of veto on the part of public broadcast shareholders on editorial matters through the creation of a trust. Peters told French financial daily Les Echos that the need for a capital injection had been accepted by existing shareholders as part of the strategic plan he put in place four years ago and that Euronews had not been able to invest significantly in digital. Sawiris is the CEO of Oras-

com, a holding company with telecom, cable and media interests in a wide range of countries in the Middle East, North Africa and elsewhere, including Egypt, Lebanon and North Korea. Separately, Euronews has extended its reach in Lusophone Africa thanks to a new agreement with South Africa-based pay TV provider DStv, and has launched a programming strand on the Senegal-based Ouest TV channel in Francophone Africa. DStv Africa has launched Euronews Português on GoTV+, its digital-terrestrial service in Mozambique. DStv has also allocated a specific channel to Euronews Português for its customers in Mozambique and Angola. The latest deals come ahead of Euronews’ planned launch of Africanews, a dedicated multilingual pan-African news channel later this year.


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27/02/2015 11:16

News > digest

Luxembourg SAT > HD, Europe boost SES SES saw a 5.1% increase in HD channels broadcast over its satellites in 2014 as it posted solid full-year results, with revenue up 4% to €1.919 billion and EBITDA up 5% to €1.428 billion. Infrastructure revenue grew by 3.8%. European revenues were boosted by the sale of eight transponders to Eutelsat, as part of the comprehensive agreement in January 2014 covering the previously contested UK orbital slots of 28.2/28.5° East. Overall the European business grew by 9.1% at constant exchange rates. During the year, the total number of TV channels broadcast via SES’s satellite fleet increased by 4.7% to 6,529, which represents 17% of the world’s total satellite TV channels. This includes an increase of 5.1% in HDTV channels from 1,793 to 1,885 broadcast by SES, representing 25% of the total market, according to the company.

Norway PROG > TV2 buyes C More Norwegian commercial broadcaster TV 2 has bought Nordic pay TV channel provider C More’s Norwegian sports operations, as part of a major content deal between the two firms. Egmont-owned TV 2 has acquired all C More’s sports rights and sports channels in Norway, including its C Sports service, in a deal that includes Norwegian national football league coverage. The firms have also entered into a long-term cooperation regarding C More’s film and series offering on the Norwegian market, with TV 2 taking over the Norwegian activities of C More Entertainment from Bonnier. Film and series will continue to be distributed under the C More brand, but the long-



term partnership will see TV 2 take responsibility for marketing, sales and packaging. TV 2 said the deal is part of its strategy to strengthen its position in the Norwegian pay TV market and better compete against global players.

Portugal CAB > Iris 60% of NOS base Portuguese cable and pay TV provider NOS saw strong advanced TV platform growth and strong uptake in convergent packages in the fourth quarter, contributing to a solid 2014 full-year performance. NOS’s Iris advanced TV service added 60,400 customers in the fourth quarter, taking the Iris total to 694,000 or 60% of the cable pay TV base. NOS said that Usage of Iris is growing exponentially,

with over 140 million interactions per day, over 90,000 streams at peak time and 165,000 unique visitors to the Youtube player. NOS recorded positive Pay TV net adds of 7,100 in 4Q14, a combination of net growth in the DTH base of 6,700 and of 400 in the cable base, the first growth recorded since 2012. NOS added close to 400,000 revenue-generating units in the quarter, taking its total to 1.85 million. Convergent or multi-play customers now account for 30% of the base. On the financial side, NOS managed to arrest its quarterly decline in Q4, with revenues down just 0.7% yearon-year. Revenues for the year were €1.384 billion, down 3%, while EBITDA was €510.5 million, down 4.9%. Net income was €74.7 million, up 17.8% compared to the previous year.

Russia PROG > CNN return Russian media regulator Roskomnadzor has reportedly approved US news channel CNN’s application for a new broadcast licenCe. According to reports by the Moscow Times and RBC news agency, the move paves the way for CNN to return to the Russian airwaves after it ceased broadcasting in the country in December. CNN cut its Russian presence after the firm’s parent company Turner International said in November that it was “assessing its distribution options” in light of the new media regulations. However, in a statement issued last month, Turner said that it had held a “productive meeting with the regulator to discuss our mutual interest in getting

US FCC adopts strong net neutrality rules By Stuart Thomson > The US FCC has adopted strong net neutrality rules, going beyond goals set by FCC chairman Tom Wheeler last year and reclassifying broadband providers as telecommunication services under Title II of the US Federal Communications Act, effectively subjecting them to stronger regulation. “There are three simple keys to our broadband future. Broadband networks must be fast. Broadband networks must be fair. Broadband networks must be open,” said Wheeler. The FCC’s Open Internet Order, according to Wheeler, reclassifies service providers as telecom services under Title II but modifies the meaning of that classification to avoid “utility-style burdensome regulation that would harm investment”. The rules will ban paid pri-

Wheeler: broadband networks must be open.

oritisation so that “’fast lanes’ will not divide the internet into ‘haves’ and ‘have nots’,” in Wheeler’s words. They will also ban blocking of lawful content and throttling – degrading access to certain content by reducing the bandwidth available. The rules will for the first time apply to both fixed and mobile networks, which the FCC estimates now account for 55% of internet usage. The FCC has also extended its remit to include interconnection between backbone networks and last-mile service providers – the issue that has excercised OTT provider Netflix

over the last year – as well as the last-mile networks themselves. Cable giant Comcast said it supported Open Internet but decried the reclassification under Title II. “We are disappointed the Commission chose this route, which is certain to lead to years of litigation and regulatory uncertainty and may greatly harm investment and innovation, when the use of Section 706 alone would have provided a much more certain and legally sustainable path,” said EVP and chief diversity officer David Cohen in a blog post. Cohen called for Congressional action to reverse the reclassification. Netflix welcomed the ruling, saying: “The net neutrality debate is about who picks winners and losers online: internet service providers or consumers. Today, the FCC settled it: consumers win.”


02/03/2015 20:17

News > digest


CNN International back in Russia and the procedural requirements for doing so.”

CAB > ER-Telecom acquires Russian service provider ER-Telecom, which operates under the Dom.ru brand, is to acquire Yaroslavlteleset, a leading cable operator in the Yaroslavl region in western central European Russia, according to local press. According to the trade news site ComNews, ER-Telecom is to pay RUB305.5 million (e4.5 million) for Yaroslavlteleset, with the deal expected to close imminently. Yaroslavlteleset is currently owned by the Yaroslavl city authorities. Local politicians have been critical of the sale, according to ComNews, with Yaroslavl Oblast deputy Sergey Balabaev claiming that the asset was undervalued in the sale. The deal is expected to make ER-Telecom, which already operates

in the city, with an 18% share of the broadband market and a 12% share in pay TV, the leading cable operator in Yaroslavl, which has a total population of about 600,000 inhabitants.

Spain IPTV > Telefónica passes 5m Spanish telecom giant Telefónica saw its global pay TV subscriber base grow by almost half over the last year to more than five million. The telco saw TV numbers over all the territories in which it operates grow by 48% in organic terms to reach 5.1 million. The figure compares with 17.7 global broadband subcribers, up 138,000 in the course of the year. Fibre broadband homes numbered 1.8 million in December up two and a half times over the course of the year. In Spain, Telefónica

Chameleon:

had 1.9 million TV subscribers, a threefold increase on the 2013 figure. The 2014 figure included the addition of 131,000 ‘TV Mini’ customers in the second quarter. Multi-play penetration increased, with Telefónica’s Movistar Fusión offers attracting 3.7 million homes, up 27%. However, overall fixed access revenue generating units dipped by 1% to 41.2 million due to the disconnection of inactive mobile subscribers. Elsewhere, Telefónica saw pay TV numbers in Brazil rise by 20% to 770,000, while TV numbers from Telefónica Hispanoamérica – covering Spanish-speaking America – grew by 14% to 2.4 million. Fibre, mobile contract and pay TV now form the three main pillars of Telefónica’s strategy, helping it to consolidate its position in Spain. Overall, full year revenue amounted to €50.4 billion, while operating income was €15.5 billion.

UK CAB > UK gets super-fast Some 32% of UK broadband connections are now ‘superfast’, up from 24% in November 2013, according to research by Ofcom. The UK broadcast regulator said that average broadband speeds have increased by a fifth in the six months to November 2014, thanks to increasing uptake of broadband connections that are 30Mbps or above. The average broadband speed is now 22.8Mbps, up from 18.7Mbps in May 2014. Breaking it down by technology, Ofcom said that as of November, the average ADSL speed was 7.3Mbps, the average fibre speed was 41.6Mbps and the average cable connection was 54.4Mbps – with the latter helped by a speed upgrade programme by the UK’s largest cable broadband provider, Virgin Media.

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02/03/2015 20:17

30th anniversary > Industry survey


The anniversary survey To celebrate Digital TV Europe’s 30th anniversary, we asked a panel of industry experts 30 penetrating questions about the future of TV.

1

What do you think will be the single most import trend to impact the digital television space in 2015?

For respondents to our survey, OTT, ultra HD, the blurring of the lines between broadcast and broadband, and multi-device delivery are the key topics for the year ahead. “Digital TV is adding the ability to address individuals as well as households: we are already in the midst of a large scale evolution from a single main screen to multiple screens, the majority of the new ones being personal screens particularly smartphones and tablets,” says Ed Barton, head of TV and principal analyst at Ovum. OTT services are driving the idea that viewers are individuals

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and personalisation is key. Pay TV operators are following this trend. For Steve Plunkett, CTO at Red Bee Media, 2015 will be crucial for UHDTV. “There is an increasing consensus that more pixels will not provide the average consumer with enough benefit to justify the end-to-end costs,” he says. “With more 4K TV sets arriving in the shops, despite a lack of industry agreement on exactly what Ultra HD is, should be, and how it is to be delivered, we risk a consumer backlash down the line. This is why we must make progress on UHDTV in 2015.” Simon Walker, chief commercial officer and president at multi-channel network (MCN), Rightster, on the other hand focuses on the fact that “the line between traditional and online is going to become even more

blurred” and believes the online migration of ad spend will have a major impact. Steve Shannon, general manager, content and services at Roku also believes that “we will see more major TV networks offering their content to consumers over the internet”, citing plans by HBO and CBS to launch OTT streaming services this year as well as the recent Sling TV launch. For Jette Nygaard-Andersen, EVP of Nordic pay TV operations at Modern Times Group (MTG), multi-device distribution is the key trend, along with a need for pay TV operators to differentiate themselves through superior customer service. “It will be increasingly important for service providers to be able to cater for how the individual subscriber wants to consume content,” she says.


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What do you anticipate will be the most disruptive new technology in the coming years? Personalisation, cloud and hybrid technologies will have a disruptive impact on the TV industry over the coming years. “Personalisation, as a single theme, will be very important and could change the nature of broadcasting,” says Red Bee’s Plunkett. For MTG’s Nygaard-Andersen, data analytics and the cloud will have the greatest impact. “I believe the technologies that are most likely to facilitate disruption across entertainment are those associated with data analytics and cloud storage,” she says. “The effective harvesting, analysis and management of data will better facilitate personalisation of content, services and price packages for consumers.” For Régis St Girons, CEO of TV technology firm HTTV, “technologies that properly mix broadcast and OTT in the TV will make a difference in the coming years”. He highlights Android, already used by multiple TV manufacturers, and the HbbTV standard and notes that the pair “could be combined for the better as they are complementary”. For Roku’s Shannon, the application of internet advertising techniques to TV streaming services “will enable new business opportunities and models that we haven’t seen before. I am confident that it will change the world of TV advertising forever.” Luke Gaydon, VP of strategic initiatives, media at OTT video specialist Brightcove, says the democratising effect of live streaming and other new technologies will change “the notion of ‘premium content’”, expanding it beyond movies and broadcast series. Ovum’s Barton, on the other hand, believes that “the impact of cloud computing and technology has yet to be fully felt” with cloudbased broadcast and DVR services and digital lockers likely to grow in appeal.

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How different will the broadcast industry look in five years’ time?

With the full impact of disruptive technologies still to be felt, major changes may be in store for the broadcast business over the next five years, and that is certainly the view of Jim Denney, VP, product marketing at TiVo.


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“A few key factors will be that mobile consumption will continue to grow. Personalised experiences are going to be critical and streaming, whether from the operator or from other OTT sources are going to be an even bigger part of the overall experience,” says Denney.

Denney: personalised experiences are going to be critical and streaming will play a bigger role.

OTT and non-linear consumption will likely be the major sources of change, unsurprisingly. “Increasing amounts of revenue will be created through cable VoD, internet services, mobile services and OTT, for example,” says Brightcove’s Gaydon, who believes unbundling and flexible packaging will be the norm. “As this shift of revenue to digital delivery continues, broadcast will be another distribution endpoint but no longer the distribution endpoint.” For St Girons, the flexibility of OTT could mean that pay TV operators – the drivers of the broadcast business in mature markets – will ultimately dispense with set-top boxes altogether, despite the role of these boxes as a differentiator up to now. “Pay TV operators have already started extending their services on consumer tablets and smartphones. Thanks to Android or HbbTV 2.0 or a combination of both we could envisage that in five years’ time pay TV operators will also take full advantage of the hybrid TV sets and get rid of their proprietary STBs,” he says. Roku’s Shannon goes further. “Personally I expect the pay TV market to decline as a result of streaming services that will thrive in the coming years,” he says. The industry will clearly be different in five years’ time, but how different is still a matter of debate. “Not as different as Google thinks it will, but more different than ITV thinks it will,” says Claire Tavernier, managing director at Shine Group-owned MCN ChannelFlip. Ovum’s Barton also believes change will be gradual. “Outside of technology and service evolution I think it will look broadly similar to today, certainly in terms of the composition of the value chain,” he says. “One change is that more TV will be sold in bundles with fixed and mobile broadband than today. There is

unlikely to be some grand disruption by a technology titan as has been much speculated upon over the last half decade.” For Nygaard-Andersen, the essentials of TV will remain constant. “Things will change, but the cornerstone is still content and the great stories we can tell and share with our viewers and each other,” she says. Nevertheless, she says, there will be “major shifts in the power balance and emergence of a new, parallel OTT value chain” with “device and infrastructure players [taking] new roles in the value chain” leading to new constellations and partnerships.

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What impact do you think the spending power of OTT players will have on the content market in 2015? OTT players including Netflix and Amazon have emerged as big content players in their own right. For MCNs, business is also

Tavernier: demand for premium scripted content will continue in 2015 as demand for talent increases.

booming. “It’s a great time to be producing premium scripted content, and this will continue in 2015 as the competition for talent in this space increases. I think this will benefit primarily English-speaking productions though, and it will be interesting to see what happens in markets with strong local language producers, such as Germany, France or Italy,” says ChannelFlip’s Tavernier. “Much of the focus to date has been on long-form scripted dramas like House of Cards and Orange is the New Black, but as the Golden Globe for Amazon’s comedy Transparent demonstrated there’s a lot of excitement about other genres too. It’s all good news for the creators of great intellectual property,” says Righster’s Walker.

5

Are there still fresh opportunities to be had for traditional media companies in the OTT space?

Despite the emergence of new players, traditional broadcasters are increasingly

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playing a role in the OTT space. “There are absolutely interesting opportunities in that space for a bundled approach between OTT and broadcast. Some of the US cable channels are trialling various options to go direct to consumers. Finding the right partnerships on an international basis will probably be key here,” says Tavernier.

limelight,” says Walker, citing the growing popularity of YouTube personalities among the young. “From Rightster’s acquisition of Base79 and Viral Spiral Group, to Disney’s purchase of Maker Studios and Big Frame’s sale to Dreamworks, online video businesses and the talent and content they work with are hot properties in today’s market,” he says.

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Will OTT supersede pay TV in the next 10 years?

Whatever the disruptive power of OTT, broadcast pay TV still has staying power, and even OTT players themselves do not believe streaming services will take its place. “I think the definitions of what we mean will change. The audience doesn’t care whether content is shown on an internet delivered service or a packaged cable or satellite service. The success comes from coupling great content to a great consumer experience. The value proposition for paid TV may have to evolve, but it’s not going to be beaten outright by OTT in the next 10 years,” says Righster’s Walker.

Do you predict an increase in the number of online originals being made and trialled by non-online content firms such as linear broadcasters?

“I would expect pay TV to remain propped up by sports rights for the next few years. OTT doesn’t have yet the capacity for mass broadcast of popular sports events,” agrees ChannelFlip’s Tavernier.

For the MCNs, the clear answer to this question is ‘yes’. “Absolutely – a prime example of the shift to online originals is Simon Cowell announcing at last year’s MIPCOM that he plans to launch Syco Entertainment’s next show on a digital platform rather than with a traditional broadcaster. In his keynote speech, he proclaimed: “I think it’s a bit of a game changer. The market for our shows is three times the size of what we had two or three years ago,” says Walker. “We already know there will be more coming from the BBC and C4. The question is whether they’ll be successful. The BBC Taster channel is interesting conceptually, but remains very experimental, and will struggle to get returning users without heavy promotion,” says Tavernier. “Channel 4’s strategy of strongly linking online original with broadcast programmes, as in Cucumber, Banana, Tofu, is also worth looking at. Ultimately though there still is quite a limited understanding within broadcasters of what makes a good online original.”

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While OTT will not ‘beat’ broadcast, it will influence broadcasters. “Short-form video’s success is all about the talent. Staying relevant is at the forefront of broadcasters’ programming strategies as MCNs see rapid growth rates from this massive young online audience base. Short-form video stars, who have built an audience primarily on online platforms such as YouTube, have taken the

For MCN executives, the acquisition of MCNs by broadasters can make sense, but only if it’s done in the right way. “Due to the talent and content they work with, many MCNs are in demand, which can be seen as both an opportunity and challenge to traditional TV companies. For those broadcasters who have already joined the online video revolution, this is an amazingly exciting opportunity. It’s only a challenge for

Walker: pay TV will have to evolve, but it’s not going to be beaten outright by OTT.

How will the success of shortform content on sites like YouTube influence the programming strategies of broadcasters?


Does the acquisition of MCNs or web content aggregators by traditional TV companies make sense?

TV companies that are not involved,” says Walker. Tavernier is more cautious. “It will very much depend on how the companies are integrated – or not,” she says. “The track record of traditional media companies buying tech startups is dismal. We are seeing at the moment two main strategies – an arms’ length approach, which is what the RTL Group seems to be doing with their assets, and a very aggressive integration push by Disney around Maker. Both strategies can work if they are managed correctly, but we will have to wait and see.”

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What challenges still exist when it comes to offering content anywhere, across any screen?

Multiscreen delivery is now a must for OTT players and broadcasters alike, but challenges remain.

Gaydon: the need to support legacy devices can stall innovation, but is a necessary part of the equation.

“The landscape for delivering video content to any screen, reliably and with quality, is still highly complex,” says Brightcove’s Gaydon, with new devices coming out constantly and content providers having to take decisions about which new and legacy platforms to support. “New TVs are introduced with more features but it doesn’t mean people will refresh. Legacy devices affect performance, expectations on connectivity and features. As a result, supporting legacy can stall innovation, yet it is still a necessary part of the equation.” The broad lack of consistentlyapplied standards for content protection, advertising, analytics and audience measurement implies “an intimidating level of fragmentation”. For pay TV broadcasters themselves, ease of use and access is key, according to Modern Times Group’s Nygaard-Andersen. “We work closely with licence holders to secure rights that match the different platforms in the best way. The industry is gradually breaking down barriers existing around rights, access and distribution,” she says.


02/03/2015 20:01

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Can pay TV operators and broadcasters make additional money from TV everywhere services?

Offering multiscreen may now be obligatory, but making additional revenue from it has proved challenging as consumers come to see it as a standard feature. However, broadcasters and OTT providers believe making money is possible. “TV Everywhere and multi-screen services are very popular and in great demand, as they offer customers true additional value, therefore TV Everywhere products will enable us to stay relevant and is part of a premium service. So TV Everywhere can offer both revenue opportunities as well as acting as a customer retention driver,” says MTG’s Nygaard-Andersen. For Brightcove’s Gaydon, advertising can deliver value to OTT players, while the retention power of multiscreen can benefit pay TV: “The more mature VoD services that we work with have been generating positive revenue for over two years now and traffic for VoD services is increasing year-on-year across the board. Online CPMs are now there or thereabouts and services like Netflix have proved that there is a strong appetite for paid content. For pay TV providers, additional OTT services increase ‘stickiness’ and loyalty to the core business.”

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How long will it be before ubiquitous access to content across devices becomes the norm?

Pay TV operators are increasingly agnostic about how to reach consumers, although the set-top box remains a key component. “Today we offer a portfolio of entertainment products to our customers. The way we view our pay TV services is not bound by platform or device, but by offering a portfolio of different content, products and services,” says Nygaard-Andersen. “Our goal is to create a great customer experience by offering the best and most relevant stories and content for all platforms, which we can only achieve by understanding what our customers really want and being innovative on behalf of the customer all the time.” For Brightcove’s Gaydon, ubiquity is already the norm.“I’d argue that we’re pretty



much there now. Consumer demand for video content keeps growing. That content might not all be ‘professional’ or ‘broadcast’ content yet, but that doesn’t matter,” he says. “All video offerings, whether professional or otherwise, are vying for our limited attention spans. The challenge to service providers will be to keep up with this demand and with the next wave of technological innovations in the consumer electronics space.”

more a judgment on their implementation of cloud TV and its violation of the regulatory structure within the US,” he says. “However, the positive outcome of Aereo is that it demonstrated the consumers’ desire for these types of services and raised awareness of the legal and technical challenges for the industry. IT has helped the participants to challenge decisions that were made in a very different technological context.”

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How far do you believe cloudbased linear TV platforms will become the norm in the coming years?

One of the technology innovations that is having most impact is the availability of cloud-based delivery of services, thanks to ubiquitous connectivity.

Sandford: cloud-based ondemand services can have a significant impact if content licensing permits it.

“The question is how long until linear workflows switch wholesale to the cloud. This is the area where the timeline is going to vary by region. But very few are disputing that the cloud is the way that linear TV will be distributed in the future,” says Gaydon. “The technology will support it. This form of distribution can have a significant impact on the landscape if content licensing permits it,” says David Sandford, VP and general manager, international at TiVo. However, he says, the growth of on-demand will be key. “Cloud based linear only changes the delivery mechanism, not the consumer value proposition,” he says.

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How far do you think regulatory and legal setbacks such as the block on Aereo in the US will hinder the development of cloud TV?

The Aereo judgement in the US has placed a cloud – so to speak – over cloud delivery, but this has, according to Brightcove’s Gaydon, a silver lining. “I’d suggest that Aereo’s approach, as judged by SCOTUS, was less of a comment on cloud TV and

To what extent do you think cloud technologies will transform TV?

The broader impact of cloud technology is clearly going to be significant. “Cloud based technologies will have a massive impact on the future of TV. From Cloud distribution, to experiences, to big data technologies for recommendations and analysis, the cloud will impact every aspect of the TV experience,” says TiVo’s Sandford. Brightcove’s Gaydon agrees. “One thing that ‘the cloud’ has proven across industries is that it accelerates the rate of innovation – people can write and iterate applications faster than ever, and this applies to the pace at which content providers are experimenting with different content distribution options – for example, EVS and SnapChat,” he says.

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How do you think the role of the second screen as a tool to enable viewers to interact with TV will evolve in the next few years?

Second screen interaction is now commonplace, but more innovation lies ahead. “If you watch TV you need to know what’s on, and most existing TV guide experiences are so awful that there’s clearly an opportunity for a refreshing take on finding something to watch. People love TV guides, but there’s no viral social factor to them, nor great sex appeal, and so this market category is thriving, but not generating a great deal of press attention,” says Anthony Rose, founder of second screen app provider Beamly. “Smartphones and tablets offer a better control interface than the big screen, but direct connectivity with that screen is still clunky. I’m looking for smoother auto-discovery and the next generation of Google Cast and Airplay. Opted-in push


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notifications from TV to smartphone/tablet, and a host of mainstream casual games built for two screens will, I hope, create new types of family-orientated entertainment and educational experiences,” says Tom McDonnell, co-founder and CEO at second screen specialist Monterosa.

McDonnell: smartphones and tablets offer a better control interface than the big screen.

“I think we will see more innovation in this space. As content to the primary screen is delivered to a connected device, rather than a one way broadcast outlet, things could get a lot more interesting,” says Red Bee’s Plunkett.

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Will there be a rise, fall, or a leveling out in the popularity of dedicated ‘second screen’ apps?

While second screen innovation still has a way to go, how the second screen experience is structured is a matter of debate. “This depends on the quality and utility of dedicated apps. It does feel as though the initial excitement and industry hype around second screen apps has waned so there is a risk that the whole concept loses consumer interest. Unless we see something new I think the popularity will fall away,” says Plunkett. However, McDonnell disagrees. “The fact is, for bigger shows on bigger networks, dedicated apps work. They generate enough usage to be valuable to brands and can encourage commerce, data capture and other monetisation,” he says.

Rose: ‘participation TV’ is a better term than ‘second screen’.

“The vision of second screen companies was a future where programme makers created new forms of entertainment that didn’t just beam out at users, but allowed users to participate in the show. That is happening, but more slowly than many had



hoped for,” says Rose. “The only problem is with the term second screen – for my part I never liked it and we never referred to ourselves as a second screen app – that would be defining your market segment based on a user’s device or seating position. Instead, we use the term participation TV, and that is something that’s the equivalent of, and as inevitable an update, as allowing people to comment and share in your web site.”

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Will TV become more personalised and less of a common experience?

While a full picture of the future of the second screen has yet to emerge, there is general agreement that the future will be personalised. “I expect TV to become much more personalised going forward. Everything from the content recommended to you on a VoD platform, to the ads served during a show and the linear schedule itself will be much more contextual. This will drive the adoption of connected devices and standalone broadcast TV will look increasingly outdated,” says Red Bee Media’s Plunkett.

Plunkett: I expect TV to become much more personalised going forward.

“All TV will become more personalised; even live TV will have companion content, stats etc. that audiences can switch on or off. I think viewing will diverge with live broadcast event TV at one end of the spectrum and ondemand drama, factual and niche content at the other. However, that’s all from a broadcaster-centric viewpoint. From an 18 year old’s perspective, none of that matters and they’ll spend more time on YouTube, SnapChat and other ways to watch video,” says Monterosa’s McDonnell.

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Will the TV will be at the centre of the connected home?

For cable, IPTV and other pay TV operators, if OTT TV is both a threat and opportunity, their role as gatekeepers to the home does open up

the possibility of playing a key role and more and more devices become connected. “It is likely that the TV will have a special role to play in the connected home. As a relatively large shared space and focal point within the home it would make sense to direct information to it. For example, flashing an alert on the screen when home energy consumption goes beyond a threshold or switching a video feed from the door entry system when a caller is outside,” says Red Bee Media’s Plunkett. Monterosa’s McConnell agrees that the TV will be key: “TVs, their operating systems, and devices like Chromecast and Amazon Fire are finally getting a lot better.”

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Will the Internet of Things have an impact on how consumers engage with and consume media? Ubiquitous connectivity will, most agree, have a transformative effect on people’s lives, not least in the way they consume media. “The Internet of Things helps to provide context and interactivity with our physical environment. The everyday and mundane objects that surround us will gradually transition from being passive to active. It bridges the worlds of atoms and bits, so it would be very surprising if that did not impact our relationship with media going forward,” says Plunkett. Monterosa’s McConnell agrees, but with reservations. “In sports, player tracking will totally change how fans enjoy sports. Smartwatches will fail to ignite in the way everyone thinks, then someone will crack it and we’ll all be wearing them,” he says.

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Beyond TVs, tablets, smartphones and game consoles, will other video-ready devices be widely used in the coming years? How ubiquitous connectivity exactly shapes the pattern of media consumption is difficult to predict. “The Internet of Things is predicated on a notion that anything that will benefit from a networked connection will get one. The same could prove true for video enablement of many devices,” says Red Bee Media’s Plunkett, citing the longer-term potential of

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smart watches that provide video, currently held back by cost and battery constraints. He also highlights the possibility of “fridges and ovens with screens on the door so you can glance at the contents without the limitations of glass windows”. For Monterosa’s McDonnell, “wearable glasses of some sort will find a variety of specific uses; showcasing new cars before they’ve been manufactured for example”. However, he says, “I expect we’re a couple of generations from the killer AR or VR app.”

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Do you think 4K/Ultra HD will be successful and why?

Despite earlier skepticism, most now believe that UHDTV will be a success, ultimately.

Motohashi: UHDTV is just a means and a tool for enhancing creativity.

“I believe ‘yes’. Broadcasting and TV services are always developing and upgrading their services and utilising the latest technologies, so I think going UHD is inevitable. But UHDTV is just a means and tool for enhancing creativity,” says Keiya Motohashi, head, executive office, and senior strategist, UHDTV & Smart TV Services at the NexTV Forum, Japan. “It will be successful, eventually, taking longer than TV makers would like to have you believe. Why? Unlike 3D or curved TVs, 4K fundamentally is just better TV – so just as all TVs eventually became HD TVs, all TVs that you can buy will eventually be – at least – 4K,” says Ovum’s principal analyst, TV, Paul Jackson. Content will increasingly be filmed in 4K ahead of devices and infrastructure becoming widely available. “Yes, I most certainly believe that 4K will be successful. Simply because 4K offers better picture quality and that message resonates extremely well with consumers,” says Roku’s Shannon. “I also believe that streaming will be the primary platform for the delivery of 4K content to consumers. There are already 4K streaming services available.” Roku recently unveiled a 4K TV reference design and TCL will be its first technology partner, with Netflix



being its initial 4K content partner. “Evolution towards UHD is a natural development for TV, which always tends to provide better image quality and to improve the user experience with bigger screens. We could, therefore, reasonably guess that it will be successful overtime,” says Regis St Girons, who in addition to being CEO of HTTV is also a leading figure in promoting new formats as president of the HD Forum. However, given the average TV viewing distance in homes, only the largest available screens – over 80 inches – will provide “that true feeling and experience”, he says.

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What challenges does 4K adoption face, and what needs to be done to overcome these? 4K and UHDTV do still face challenges. “People in mature markets are not going to rush out and buy a brand new 4K TV overnight – especially when the increase in perceived quality is less than the SD to HD shift,” says Ovum’s Paul Jackson. “Lower pricing of displays will help, though ironically this will mean the TV makers don’t get the boom years of margin some are – unrealistically – hoping for.” Growth markets including China could push adoption, while other devices, including smartphones and VR headsets, could take off earlier. “I think the remarkable spread of internet technology will both challenge and support UHDTV,” says NexTV’s Motohashi. “Now many people enjoy various video content on their mobile devices anytime, anywhere, interactively. This is a most different situation from 25 years ago, when HDTV appeared. We have to consider how we manage broadcasting services in cooperation with the internet.” St Girons meanwhile points out that “the industry is already working on a second Ultra HD generation referred as UHDTV1 phase 2 that not only provides more pixels but also better pixels”, delivering improvements that “are visible to the user regardless of the viewing distance and screen size”. Shannon warns 4K has other implications for broadcasters: “Many traditional distributors may never upgrade their facilities to support 4K due to the bandwidth requirements. And don’t forget that the production cost for 4k content is a lot higher.”

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Which industry players are best placed to deliver 4K/UHD?

“The OTT TV players certainly have the early advantage, given they rarely have to upgrade consumer hardware or pay for (much) infrastructure – Netflix and Amazon have been very smart in positioning their services as some of the only places that you can get 4K programmes, certainly up until Q4 2014,” says Ovum’s Jackson, who nevertheless argues that “the traditional service providers will fight back”. Physical formats like 4K DVDs will fail to take off, while smart TV manufacturers will push online 4K without reaping financial benefits, he says.

Shannon: streaming services are clearly the ones to succeed in delivering 4K.

“Streaming services are clearly the ones to succeed in 4K delivery to consumers because they are the ones with a platform that is already technologically capable, together some satellite carriers,” agrees Shannon. Motohashi believes that “broadcasting services and OTT/IPTV services are complementary to each other”. The position of terrestrial broadcasters is more complicated “because the terrestrial spectrum in Japan is too crowded”. But Japanese terrestrial TV broadcasters are those producing the video content. “So terrestrial TV broadcasters are expected to be main players as producers and suppliers of quality UHDTV content.” For St Girons, “OTT platforms will have an advantage over more traditional broadcast networks as, on one hand, the production cost will be much lower for OTT content… and on the other hand OTT distribution costs will be proportional to user demand.”

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How predominant will ‘quadplay’providers be in delivering TV services over the next few years? Fixed-mobile convergence and quad-play offers are playing an increasingly prominent role in the strategy of many leading TV service providers.


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“We believe the quad play is going to be an important factor in TV services going forward as service providers increasingly integrate to offer all services and use bundles to differentiate their offerings and provide more competitive packages. As more consumption is done on mobile devices, the importance of mobile in any television offering is increased,” says David Sandford of TiVo. Modern Time Group’s Jens NygaardAndersen sounds a note of skepticism however. “Triple-play bundles are popular and increasing in penetration, whereas quad-play penetration is much lower and the availability varies a lot between regions and countries,” she says. While telcos are clearly pushing quad-play offerings. “there is no immediate need for a consumer to link the mobile subscription to the fixed subscription for technical or connectivity reasons,” says Nygaard-Andersen. “Most consumers are used to having different providers or bills coming from different companies, especially when it comes to mobile subscriptions. Thus, the consumer benefit of quad-play is less obvious than triple-play.”

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What challenges do you think quad-play service bundles face in winning adoption? The impact of quad-play – on take-up and pricing – has largely still to be felt. For TiVo’s Sandford, “choice and the quality of each component of the offering” will be crucial, with offers that limit choice or offer a poor experience likely to suffer. Nygaard-Andersen’s scepticism about quad-play is founded on the lack of tangible benefits it seems to offer.

Nygaard-Andersen: quadplay providers will need to offer tangible benefits to sell four products in one package.

“For the customer it is all about the value proposition offered – why should I change subscription or put all eggs in one basket? The quad-play providers need to offer tangible benefits to the consumer in order to sell all four products in one package,” says NygaardAndersen.



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With service providers delivering similar bundles, how will they differentiate their offerings? With convergence becoming the rule, operators face a choice between competing on price and competing on value. “A price discount is not a viable solution and also a dangerous long-term strategy for service providers,” says MTG’s Nygaard-Andersen, for whom “content is and will continue to be the differentiator”. Sandford believes that “experience” will be key. “Optimising the consumer’s touch points with the provider are going to set the tone for how consumers respond,” she says.

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Does the pay TV model of today have a finite lifespan?

Pay TV providers are already taking advantages of the opportunities provided by OTT, whether as a defensive move or because they see money to be made. “The pay TV industry has proven able to adapt over the last years to changing customer behaviours and new value chain dynamics,” says MTG’s Nygaard-Andersen. “We see an emergence of new players, services and business models. The value chain of OTTdelivered TV services as a major distribution form has offered major opportunities both to existing pay-TV operators and new players.” She cites MTG’s SVoD service Viaplay which sits alongside the company’s eight DTH satellite platforms, with growth of the latter fuelled by innovations like time-shifted TV and TV Everywhere. “This indicates that payTV operators are able to capture an increasing share of the total media spend,” She says. “By that definition, the current model has a finite lifespan. The question is when and how will it change,” says TiVo’s Sandford. Content availability for multiple applications will be key, but pay TV operators do have the advantage of offering a simple proposition.

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Will there be more unbundling and greater subscription choice in the next few years? Unbundling and the emergence of à la carte options has been visible of late, notably in the

Nordic markets. “A clear trend is that the consumers are faced with an increasing number of content options, ranging all the way from premium to user-generated content,” says MTG’s Nygaard-Andersen. Consumers also have multiple ways to consume content and are increasingly turning to social media to guide them. Operators including MTG are responding by offering greater flexibility in terms of packages and options, which she believes will take the sting out of demand for a fully à la carte offering. “Consumers have never had more choice and flexibility than today, for instance we offer different packages, flexible packaging options and access to relevant content, both à la carte and unbundled,” she says. “Therefore I don’t see à la carte or a completely unbundled service as “the next big thing”, at least not for the average consumer. It is too complex for the normal consumer and the value of curation and social recommendation clearly outweighs the value of full flexibility.”

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How significant will the revenue-earning potential of SVoD be relative to the overall pay TV pie over the next few years?

The ongoing shift from linear viewing to on-demand is clear, but revenues from this sector are still relatively small. “We believe that VoD will be an important factor going forward. Between DVR and VoD, consumers will get used to having large content libraries at their fingertips. As consumption in these forms grows, the revenue opportunity grows with it,” says TiVo’s Sandford. “New technology has driven an increase in overall total media consumption as consumers now have access to an infinite range of content at their fingertips, making the pie much larger,” says MTG’s NygaardAndersen, who says her company’s Viaplay SVoD service enables it to reach a younger customer base than its DTH business. “At the same time, old habits die hard, and the majority of families still have and will continue to subscribe to a satellite or cable TV subscription, which provides the broader entertainment package catering to the whole family’s needs. So the key is that the total media consumption is expanding.” l

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The RDK software framework has won strong backing – not least from Liberty Global in Europe. With new extensions tackling fresh categories of device, can it fulfill its promise of bringing web-speed innovation to cable? Stuart Thomson reports.

Web

-speed is the new watchword for traditional pay TV providers. Much of the innovation driving the evolution of the TV experience is now coming from OTT players and app developers. Meanwhile, the spectre of an emerging generation of ‘cord-nevers’ – younger consumers who have never signed up for a pay TV service and see no reason why they should – has unsettled companies that no longer hold a monopoly on video distribution, even to the big screen in the living room. The problem of OTT upstarts being able to provide a more compelling user experience than cable and other service providers, combined with the flexibility that web distribution gave them to experiment with different designs and functions, has given rise to efforts by slower-moving pay TV operators – by the cable industry in particular – to cooperate in the face of the new threat. The Reference Design Kit (RDK) was cable’s answer to the problem of being outflanked by OTT providers in delivering a compelling TV experience to users. Conceived initially by Comcast and taken up by other US cable players, the RDK adopted the open-source

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software model that has underpinned much web innovation and tried to adapt it to the cable world. Industry players including vendors and operators collaborate by contributing code to the project that is shared amongst licensees. The RDK software stack is designed to create a common framework that will enable a degree of interoperability for applications between devices. The stack, unlike previous attempts to create a common middleware – such as the MHP – is not a standard as such and does not go beyond a common baseline – namely the point where operators can differentiate their offerings through the creation of revenue-earning added-value services. This is left to them to do on top of the RDK on a proprietary basis.

Growing interest RDK software is now believed to be deployed in over five million devices with multiple operators in multiple markets. According to Steve Heeb, president and general manager of RDK Management, the independent body in charge of administering

the RDK, a number of European operators are at different stages of deployment of the platform. Most vendors involved in RDK also say they have seen significant growth in interest in the platform over the past few months as operators look to implement new TV features in order to compete with the likes of Netflix and other OTT sources of video. Interest is not confined to the cable operators that originally backed the concept but also extends to IPTV providers, according to Jaison Dolvane, CEO of TV software specialist and RDK licensee, Espial. “We certainly have seen significant interest that has increased over the last six months. We ourselves have secured tier one customers in North America and Europe. It’s not just cable – telcos and satellite players have expressed interest,” says Dolvane. “The problem around legacy technology is more amplified in cable but they and the telcos have shared problems innovating. They still think about [implementing changes] over 12-18 month periods, when competitors like YouTube and Netflix can change quickly. Part of the reason why operators have this type of problem is the


02/03/2015 17:37


This year’s RDK conference in February: RDK-B is now on the agenda.

legacy of closed systems with middleware that has blocked them from doing too many new things.” Dolvane says that the RDK can be adopted by operators irrespective of their scale, but the means by which they approach the implementation may vary. He suggests that operators with a million-plus subscribers will look at RDK seriously. Smaller providers will likely require an off-the-shelf product to deliver advanced TV. This could of course be RDKbased, with vendors providing a pre-packaged application framework on top. “As we get more operators adopting it we will see more off-the-shelf solutions,” says Dolvane.


of room to deliver innovative software on top, according to Hahn. “RDK is an important part of the software stack but it is not the complete picture,” he says, pointing out that the user experience makes use of Seachange’s own Nucleus software platform to deliver the end-user experience by providing the business logic and application frameworks. “This is above the RDK layer – all that needed to be optimised to meet Liberty Global’s requirements,” he says. Hahn says that Liberty Global now has a platform in place that will enable it to create

“every feature and line of code” to see whether it could better be rendered in the cloud than in a set-top, he adds that operators “still see the need to deploy boxes to control the user experience and have a presence in the living room”. “They want to have a spot on the table where the remote control is,” says Hahn. “But they also want to limit the time to market and be more agile in rolling out new features. This is where you see a trend of moving features like the UI into the cloud.” The advantages of cloud-based provision

“There is clear strategic direction from the top level of RDK Management that keeps everything on the straight and narrow.”

Liberty Global John Maguire, S3 Group

Adoption of RDK has been led by US operators including Comcast, the originator of the project. However, the principal European backer of RDK to date has been Liberty Global, which has used the RDK framework to launch the latest iteration of its Horizon advanced TV platform for UPC Poland, previous versions of Horizon in western Europe having been based on a proprietary platform. Peter Hahn, director of product management at SeaChange, says that the Polish deployment “proved that the flexibility of RDK would work in commercial deployments outside the US”. The deployment went live in January after significant delays, due to a variety of factors including the complexity of integrating DVB conditional access, the hooks for which had not yet been defined as part of the software. Other aspects that required detailed work included picture-in-picture functionality and getting channel change right. SeaChange contributed code to RDK to provide the required extensions to support DVB features. Liberty Global’s implementation of RDK for Horizon in Poland left SeaChange with plenty

a much faster user interface development cycle because the UI is independent of the underlying software in the box. “You can change things on the UI layer without changing anything else,” he says. Alternatively, the same UI can easily be ported to different RDK-based set-top boxes. In the case of Liberty Global, one result should be that the operator can deploy Horizon in different markets much more easily than before. The RDK is designed to enable operators to reduce costs and increase the speed of new service delivery, but it requires proprietary software on top to deliver a meaningful service. “One benefit that our product provides is that it can run in different configurations. We have in-home distribution and our stack can run over a headless gateway or over a tiny USB stick with the same software spec or OTT back office,” says Hahn. “We can distribute the signal in the home through MoCA or WiFi or Ethernet or whatever is supported in the box.” While Hahn says SeaChange weighs up

of things like DVR management, schedule management and conflict management need to be weighed against the challenges that cloud-based delivery can face in the real world through bandwidth limitations. The RDK itself is neutral, says Hahn, because it just provides a set of standard consumer premises device features.

Extensions With European deployment in mind, the RDK recently embraced extensions to cover the requirements of European networks, including DVB extensions covering things like Teletext and subtitling and, more recently, support for DVB Service Information – the elements that bind DVB transport streams together and allow EPG data to be transmitted. These have minority use cases; many European operators are moving towards or have already moved towards sending EPG and other information out-of-band via IP rather than as part of the DVB transport stream, but others prefer to continue with in-band transmission. Further likely developments include support for IP multicasting, seen as a crucial element for future video delivery. Heeb says that DVB conditional access Liberty Global’s Horizon box: the operator has adopted RDK in Poland.


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19 02/03/2015 17:37


components added last year are now integrated with the RDK trunk. DVB SI components, for which Arris contributed code, became available in February. “In the case of DVB SI there were multiple contributors. Sometimes a lot of people contribute and then they see which is the best to adopt. They select one vendor submission and work with that. The onus now falls on us to fix the bugs,” says Charles Cheever,s chief technology officer, customer premises equipment at Arris. Cheevers says that, while DVB SI may only be used by a minority, European operators in general are committed to supporting QAM transmission of linear channels into the future. On the conditional access side, the two leading DVB CA providers have already plugged into the RDK, and the third-ranked player is expected to do so soon. The RDK does not currently support the European CI+ common interface standard for conditional access modules, but Cheevers says a number of operators are looking for ways to support this and the HbbTV hybrid broadband-broadcast interactive TV standard. Heeb meanwhile says that extensions to the trunk to support IP multicast and multiple DRMs are likely in the future. Despite all these signs of recent progress, RDK is not without its critics. One company notable by its absence from the list of RDK licensees to date is Nagra, which has focused on developing its own full middleware stack – OpenTV 5 – instead. According to Anthony Smith-Chaigneau, senior director of product marketing at Nagra, the regional and network differences between US cable and DVB cable networks mean that implementations will in any case require adaptation, “which means time, investment and testing as well as actual large scale deployments required to prove that any software can prevail”. Smith-Chaigneau contrasts RDK, which he describes as a “project-oriented integration”, with OpenTV 5, which he characterises as a “product”. He adds that OpenTV 5 itself uses many of the open-source web technologies that RDK has embraced, including HTML5, web-page rendering framework Webkit and GStreamer, the open-source media player framework, “so we believe that we have already proven that we can deliver a full CPE stack in accordance with the cable operators’s vision”. “The disadvantage of the RDK approach is that it is only a very small piece of an extremely



complex puzzle. You have to deliver the UIuser experience, application framework, broadcast technologies, headend and cloud technologies that all make up a modern cable television offering and that will entail quite some bespoke work on a per deployment basis,” says Smith Chaigneau. “There is a lot more to define, build, control, support and maintain. You cannot, with a small baseline software package for a CPE, deliver all these

services – that costs time, investment and money and ownership for maintenance and support.”

Room for innovation On the other hand, supporters of the RDK say the structure and self-imposed limits of the framework has worked well.

RDK-B: the new frontier for open-source Cable operators are looking to deploy a range of consumer premises equipment to capture the market for the connected home, including TV set-top boxes and broadband gateways. While the DOCSIS standard has long been an enabler for cable operators in helping them capture a huge share of the broadband access market, no such common platform exists for gateway middleware. Enter RDK-B, the latest profile of the RDK software initiative. “RDK was not created specifically as a settop platform. Operators have multiple end points in their network. These end points should have software that the operator should control and innovate on,” says Steve Heeb, president and general manager of RDK Management. “Operators have as many modem router end points as set-top boxes, and had a similar issue as with set-tops. Each system-on-a-chip vendor or OEM used different software and the operators had to manage that complexity.” RDK-B, says Heeb, can give operators a common software platform that will enable them to simplify the process of developing

Heeb: RDK-B will enable operators to simplify service development across multiple hardware types.

services across multiple hardwares. Cisco was the major contributor of open-source routing software to the RDK community last year as a key component for future RDK-based broadband products in order to bring the RDK concept to a new class of products, including gateways and routers. Heeb believes that adoption of the RDK-B profile will be faster than

for set-tops as operators are now becoming accustomed to this new way of working, and adoption will likely be led by those players that have already adopted the TV software. Other vendors are broadly supportive. For Charles Cheevers, chief technology officer, customer premises equipment at Arris, RDK-B will leave vendors with room to innovate, for example by installing features that make apps run better, features that reliably report signal strength to users and by introducing extensions related to the Internet of Things. “Innovation is about everything from installation to telling the user something has gone wrong before they know it,” says Cheevers. As with the TV side, elements that become ubiquitous or commoditised are ultimately likely to be incorporated into the common pool of the RDK. RDK-B provides a trunk of code that delivers a standardised way to steer packets for DOCSIS gateways, and WiFi and MoCA LAN connectivity. Comcast is the most advanced operator and it is likely that the code will be opened up to third parties when the US cable giant has thoroughly tested it on its own network. “What is recognised is that with more IP distribution over WiFi the goal is to have a consistent router implementation to take IP video streams, manipulate those in a defined environment and forward them to an IP settop box reliably,” says Cheevers. Operators can take advantage of a common management platform to set their own policies, for example prioritising 4K streams on their own devices. Cheevers thinks that RDK-B gateways will coexist with existing proprietary products, but points out that the launch of RDK-B coincides with the rollout of DOCSIS 3.1, where consumer expectations may drive demand for RDK-B as operators start to install new DOCSIS 3.1 gear.


02/03/2015 17:37

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SeaChange Nucleus TV: vendors will differentiate through the UI and apps.

“We structured this as an open-source licence, and for companies used to the open source world this is not an issue. For others it is an education process,” says RDK Management’s Heeb. “Licensees get full access to the RDK source code and continued access to the broader RDK community – it is an education process for people not used to working in the open source world.” John Maguire, director of strategy and marketing for TV technology specialist S3 Group, which is responsible for managing the RDK on behalf of RDK Management, says that the RDK now has about 200 licensees and that activity on the RDK portal is significant and growing. For Maguire, the division between what the RDK covers and what is left to vendors or operators to decide on is overt. “The position today is very clear [and] there is clear strategic direction from the top level of RDK Management that keeps everything on the straight and narrow,” says Maguire. RDK’s focus on “the basic plumbing” is clear and extensions for different regions are commendable, “but differentiators that are service-specific belong above the line”, he says. The RDK’s supporters say the framework is not designed to provide a complete solution to enable operators to deliver a service, but rather to provide a base on which they can then build their own differentiated offerings. “It provides part of the solution but it requires system integration and apps to complete it,” says Espial’s Dolvane. The RDK approach essentially envisions three layers – the core platform, RDK extensions and the application layer, where operators and vendors are left to innovate on their own by creating new user experiences and revenue-earning added value services. Dolvane says that one of the aims of the initiative was to avoid the mistakes of the past where technologies such as OCAP and


MHP tried to establish standardised ways of delivering a user experience. “It is up to operators to use the code base and stay true to it,” he says. The companies that have signed up to RDK do so in the belief that any intellectual property they give away will be more than compensated for by their ability to create value higher up the chain towards the user experience itself. “The general feeling is that if RDK is successful that means the industry will be more successful and we will be more successful as a result. A high tide floats all boats,” says Dolvane, who adds that Espial is innovating by creating a fast-performing user experience, including fast channel change and other features that operators are looking for. The company’s focus on the user experience includes enhancements to performance and aggregating OTT and web content with broadcast video. “It is about bringing in recommendation and the metadata being used for VoD and live TV,” says Dolvane. “We have been able to take huge strides forward because RDK is transparent and goes down to the system. In the past you would have to rely on proprietary set-top box software which might not perform well or be wellarchitected,” he says. RDK Management’s Heeb says that smaller operators are often to be seen driving innovation. Heeb says that the RDK has to some extent liberated smaller players from the need to follow the larger players in the market. “Smaller operators that have often been held captive by larger operators or vendors are no longer in that position,” he says. Such players can benefit from the use of a common platform by larger players while being set free to experiment at the application layer. Heeb says that there is a “clean line” separating the elements in TV delivery covered by the RDK, such as tuning, the DRM interface and resource and conflict management, and ‘above the line’ features that could be used to gain revenue, such as the UI, apps, videoon-demand interfaces and so on. While the line is not immovable, the elements covered should not include money-making features, where it should be left to individual companies to innovate as they see fit, says Heeb. “If the operators agreed on a common method on apps and doing purchases they bring it in and


it would have to be a common interface but all revenue generating services should be above that,” he says. For Arris’ Cheevers, the elements that have been included in the RDK are now common currency for operators – the basic building blocks of set-top boxes that formerly had a significant value as proprietary intellectual property but do so no longer. Operators and vendors have plenty of further scope for innovation above that line, deploying technologies that make boxes boot up faster, for example. Vendors and operator customers still have plenty of options to choose from and plenty of ways to innovate. Cheevers cites the example of solid-state hardware for DVR applications. This is still seen as too expensive to replace mechanical hard drives in consumer premises equipment but could be applied to cloud-DVR services. Operators can also choose whether or not to run a full browser implementation in their set-tops or not. Cheevers admits that certain elements of the RDK that are currently ‘above the line’ may become standard features in the future to the extent that they will be included in the RDK trunk. “If something becomes ubiquitous there will be pressure to fold it in – that’s part and parcel of things,” he says. However, the revenue-earning elements that differentiate one service from another will always be beyond the remit of the RDK software bundle. In the case of SeaChange, Hahn says that it can provide additional layers and features on top of the RDK software, including services such as the SeaChange helpdesk. “We also see ourselves as a system integrator. We take different pieces and integrate them with the set-top and take responsibility,” he says. SeaChange is responsible for implementing features including fast channel change and can work with CDN providers to deliver this in the case of IP video providers. How widespread RDK adoption becomes, particularly in Europe, is still to be seen. Its overall efficacy, versus that of integrated middleware, is unproven. The adoption curve is promising, and a substantial number of vendors are supportive of the overall model. Whether this means faster delivery of new services and a cycle of innovation that matches that of web-based service providers – or whether the complexity of integrating and deploying services in the real world will take its toll – only time will tell. l


02/03/2015 17:37

Cheers to DTVE

on 30 years! We’ve seen it all together. Keep your voice strong for thirty more.

schange.com

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25/02/2015 15:50

Technology focus > Satellite


Advances in orbit

The increasing trend towards IP-delivered video is changing the face of the broadcast industry, but what steps are the satellite operators taking to remain relevant? Andy McDonald reports.

The rise

of internet delivered video services has marked a major development in the TV industry. With the likes of Netflix and Amazon Instant Video establishing themselves as major consumer brands in just a few short years, changing consumption habits seem to point to an inevitable transformation in broadcaster and pay TV operator strategies. According to IHS Technology research from last year, the growth of Netflix has lead to a “three-fold” increase in long-form video consumption in the US alone and should act as a “wake-up call” to the industry. Parks Associates, meanwhile, recently claimed that the average US broadband household now watches more than 17 hours of non-

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linear video per-week, compared to just 11.5 hours of linear video, with non-linear video accounting for 49% of video consumed on the TV. Among 18-24 year-olds this rises to 60%.

Counting the costs With the costs of CDN-based delivery gradually falling, some doomsayers have even predicted that broadcast in general and satellite specifically could become irrelevant in years to come. The major satellite operators dismiss this idea, but what innovations are they bringing to the table that will keep them relevant well into the 21st century?

Digital TV Research predicted last year that satellite TV revenues for its sample of 138 countries will climb from US$87.8 billion (e77.6 billion) in 2013 to US$99.9 billion in 2020. Over this period, report author Simon Murray predicted that satellite TV revenues in 19 countries will decline due to greater competition, forcing satellite TV platforms to offer cheaper packages that will lead to lower ARPUs. The outlook for satellite is a mixed picture. Digital TV Research predicts that the number of pay satellite TV homes will climb from 192 million at the end of 2013 to 271 million by 2020. Subscriber totals will fall in 13 countries but more than double in 47 countries. Gains in growth markets including Asia Pacific and


02/03/2015 18:01



Intelsat’s next-generation EPIC class of satellite (left).

Latin America will help satellite TV operators in years to come, but how will they fare in developed western markets with higher broadband penetration and faster internet speeds? Intelsat’s vice president of media product management, Peter Ostapiuk, concedes that there is significant market fragmentation and that viewership of OTT platforms is growing, but says satellite remains complementary to the CDN network. This is largely because – when it comes to broadcasting live, linear events to many people at once – satellite remains the most economical delivery option. Ostapiuk points out that while CDN costs may be coming down, they remain variable and are based on the number of viewers


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accessing content. “Even though that permegabit price might be falling, I think as you see the increased growth of the subscribers viewing OTT content, the costs of the delivery of the broadcast, especially linear content over-the-top, will be actually rising,” he says. Wilfried Urner, chairman of SES Platform Services, agrees that in economic terms satellite is “by far” the best solution for content delivery to the home. With a flat rate charged for satellite capacity, rather than pricing that is dependent on how many concurrent users you have, he claims “it’s always cheaper, regardless what the price of the CDN is, to use satellite.” “The question, perhaps, should be whether terrestrial networks can cope with the increasing demand. Let’s assume for a minute that today’s video content was to be conveyed by terrestrial fixed networks only. In this case, data consumption per household in Europe would be multiplied by a factor of at least 35. Something in my view that is not economically feasible at all,” says Urner. Hispasat’s chief commercial officer, Ignacio Sanchis, describes the costs involved in delivering linear TV services using overthe-top technology to mass audiences as an obstacle that will remain for some time to come. By way of an example, he says: “CDN costs would need to fall by a factor of 8,000 to 10,000 to fulfil the UK national TV demand at the same cost as the most efficient broadcast technologies.” In late 2012, IHS Technology released a study called ‘Scaling OTT: Do the economics stack up’, in which it claimed that the CDN cost-per-hour to provide OTT streaming of standard-definition video exceeds satellite when the audience reaches 8,000. Sanchis says that even if CDN prices have dropped by roughly 5% year-to-year in the last two years, the costs still remain heavily in satellite’s favour.

“If I look ahead to such a period, 10 years from now, we estimate that satellites – other types of broadcast networks as well but satellites in particular – would still remain significantly cheaper for linear programming,” says Sanchis. However he admits this does not apply to the “very longtail type of channels.” Eutelsat Communications’ director of innovation, Antonio Arcidiacono, agrees. “Of course, if you are starting a video service for 1,000 people and you are targeting only the main cities in Europe where you have fibre connection and so on, I would not recommend you to do it via satellite, because it would not make sense. But if you are targeting millions of customers in all continental areas, that’s a totally different story.”

Advent of 4K Ultra High Definition 4K video has been the talk of the trade shows in recent years and looks set to be the successor to high-definition video in the not too distant future. While OTT services including Netflix have made headlines by throwing early support behind the technology, the capacity requirements needed to deliver UHD over IP will only exacerbate existing cost issues for massdelivery over CDNs – according to Urner by a factor of “three or four times”. Satellite’s usefulness in delivering 4K to wide audiences is a compelling argument for its continued use in the broadcasting chain, and a number of pay TV providers are already experimenting with the technology. Last October, Tricolor TV in Russia began testing a pilot, satellite-delivered, Ultra HD channel. In the US a month later, DirecTV claimed to be the first multi-channel video provider to offer 4K Ultra HD programming direct to customers’ TVs, doing so through its Genie HD DVR and compatible Samsung UHD TVs. Meanwhile, Sky has staged 4K broadcast

“We probably will be seeing within the next 24 months the launch of several linear 4K networks.” Peter Ostapiuk, Intelsat

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trials in both the UK and Germany, with rumours that a commercial service is due to follow. Speaking at the SES Ultra HD conference in London recently, Stephan Heimbecher, head of innovation and strategy, Sky Deutschland, seemed to confirm this, saying that Sky would address the million plus 4K-capable devices already in the market with a German 4K service at the end of this year or early next year. Though it did not announce its involvement at the time, Sky Deutschland initiated an endto-end 4K trial with SES back in November. The satellite operator broadcast a live concert by US rock band Linkin Park from the O2 World arena in Berlin via the Astra satellite position at 19.2° East, encoded in 10-bit HEVC/H.265 in 4K resolution. SES’s Urner believes that “a lot of channels” will start to broadcast in 4K quality over satellite from the end of 2015 to 2016 and beyond as new TVs start to support 4K as a de facto standard. At Intelsat, Ostapiuk says that the same shift that the industry saw with the move from standard definition to high definition – brought about by the advent of DVB-S, 8PSK modulation and MPEG-4 compression – is beginning to happen again with UHD. “We probably will be seeing within the next 24 months the launch of several linear 4K networks. With DVB-S2X modulation and with highly efficient video coding, also known as HEVC or H.265, you’ll see a 30% to 40% efficiency on the modulation and 50% efficiency on the compression,” he says. Ostapiuk argues that with both these new technologies, the price of transmitting UHD content over satellite “is going to be comparable to what it costs to deliver the HD channel in MPEG-4 and DVB-S 8PSK today.” For delivery of 4K over-the-top, on the other hand, he says you would need a roughly 20 Megabits-per-second connection in the last mile. “Very few consumers today have that. It almost requires fibre-to-the-home infrastructure to be able to achieve that on a consistent basis.” Hispasat’s Sanchis agrees. “Satellite led the digitisation of TV, satellite led the deployment and the penetration of high definition TV. We expect the same to happen with regards to Ultra High Definition – be it 4K or 8K,” he says. “We believe so much in the fact that satellite will be driving this new paradigm of TV that we already decided one and a half years ago to launch our 4K channel –



DVB-S2X: the pros and cons Released last year, DVB-S2X adds new features to the earlier DVB-S2 standard, but does this technology offer a significant enough stepchange to encourage broadcasters to adopt it? Newtec, the firm behind the DVB-S2X technology, claims that the standard produces a 15-30% efficiency gain in a typical distribution network and is made up of a combination of technologies that improve transmission over satellite links. Describing some of the changes, Newtec founder and chief technology officer Dirk Breynaert says that DVB-S2X implements a smaller roll-off percentage than that used in the DVB-S2 standard – adding 5%, 10% and 15% to DVB-S2’s 20%, 25% and 35%. “The roll-off factor determines the steepness of the carrier slope, and, therefore, the usable bandwidth on a given transponder,” explains Breynaert. “In addition to smaller carrier rolloff factors, the DVB-S2X standard comes with more granular and higher efficient modulation and coding schemes – MODCOD – and Forward Error Correction – FEC – choices compared to DVB-S2.”

Breynaert: DVB-S2X offers smaller rolloff percentages than DVB-S2 and efficient modulation and coding schemes. Newtec claims that the improved transmission efficiency of DVB-S2X will allow the satellite industry to increase its profits and grow in areas ranging from high speed IP to broadcast and VSAT.

Hispasat 4K.” Hispasat first launched the promotional 4K feed in Europe in 2013, adding North and Central American coverage in 2014. It now has plans to add South America in the near future. “Today we are delivering HEVC-based video below 18Mbps for a full 4K channel. Our expectation is that we will probably, in a couple of years’ time, be close to the mark of 10 Mbps for a 4K channel. This will certainly push the commercial deployment of linear

“The efficiency technologies contributed by Newtec to the new DVB standard boost the satellite link up to 20% in direct-to-home networks and up to 51% in other professional applications compared to DVB-S2,” says Breynaert. However, is all this enough to convince the industry to upgrade? Oscar Glottmann, executive director and chief marketing officer at NovelSat, a rival to Newtec that develops its own proprietary technology, is not so sure. Glottmann claims that one major drawback of DVB-S2X is that it is not backwardscompatible with DVB-S2, something, he says, “that means the incentive to move to DVB-S2X is not that great.” Glottmann also calls into question how compelling the improvements claimed for DVB-S2X truly are. Having done extensive tests, he claims that it is actually possible to achieve, “most of the efficiency improvements that you did in DVB-S2X, with a 5% roll-off, with DVB-S2.” “All the equipment that is designed for 20% roll-off will still be able to receive the transmitted signal with minimal degradation and there are at the same time many set-top boxes and many cheap sets that allow for 5% roll-off. Basically our conjecture is that you can achieve most of the benefits DVB-S2X gives you with DVB-S2,” he says. Looking ahead, Glottmann predicts that heading into 2017 or 2018, as satellites improve further and as 4K and Ultra HD channels start to become a common concern, it will be possible to take the technology further and create efficiencies that are 20-50% better than S2X does now. “S2X will just not be enough; that’s our take,” he says.

[4K] channels,” said Sanchis. As Eutelsat’s Arcidiacono points out, “The Amazons and the Netflixes are showing that 4K is a reality, they are pushing the 4K, [but] now they have enormous problems in delivering 4K at a reasonable quality level, because of the terrestrial lines.” For Eutelsat, he says, “this is good news” because audiences are being educated about the kind of high quality content that they will also be able to access through satellite – something that will be especially useful to


02/03/2015 18:01

Take Center Stage with the AMOS Satellites

See us at

SATELLITE 2015

Spacecom’s AMOS satellite constellation, consisting of AMOS-2 and AMOS-3 co-located at 4°W, AMOS-4 at 65°E and AMOS-5 at 17°E provides high-quality broadcast and communications services across Europe, Africa, Russia, Asia and the Middle East. With the upcoming launch of AMOS-6, Spacecom is expanding its coverage over Europe and Africa. The result: greater capacity, high-throughput Ka multibeam capabilities and affordable end-to-end satellite services. Spacecom. Expect More.

March 16-19 Washington D.C. Booth # 5061

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p27 Spacecom FebMar15.indd 1

02/03/2015 18:26


viewers that live outside of fibre-connected cities.

Hybrid innovation For the satellite operators, innovation does not begin and end with 4K delivery and, far from being a threat, many in the satellite industry believe that the advent of IP-delivered content actually presents an opportunity for the operators to deliver advanced hybrid services. “I think that satellite is the perfect complement to fibre and the CDN network, and I think the future is really around building the network,” says Ostapiuk at Intelsat. He claims that the hybrid model brings with it the flexibility to choose the best distribution path based on geographic location and type of content – be it on-demand or linear. Hispasat’s Sanchis says that with a large number of people now consuming linear content on multiple devices in the home, receiving that content via CDN may not be the most efficient way when there is already a satellite broadcast feed to the home. “Using satellite-delivered content and then redistributing IP in-home seems to be a much better approach for two reasons: costefficiency, and quality of service,” he says. With this in mind, Hispasat started work on project SATURNO (SATellite Universal Redistribution NetwOrk) back in 2010, with an aim of developing solutions that converge


industry.” As such, Hispasat has now joined forces with SES to work jointly on the SAT>IP open standard. Founded in 2012, SAT>IP is designed to tackle the same concept that Hispasat was working on independently – converting the satellite signal to IP format, either in the antenna itself or in a SAT>IP server connected to the IP-switch or IP-router. SAT>IP thus allows satellite programmes to be received not just on IP capable set-top-boxes but also on other modern IP capable devices like PCs, laptops, tablets and smartphones. Sanchis says the aim is to now open out SAT>IP to even more industry players: “We are going to create the SAT>IP Forum, which is open to satellite operators, to DTH operators, to broadcasters and to consumer electronics companies to jointly develop the SAT>IP standard and make it available in a competitive way to manufacturers and operators. This is certainly one of our key targets in video innovation.” SES announced its first IP-LNB (low-noise block down-converter) device, capable of delivering and forwarding eight concurrent channels from the transponders of a satellite via IP unicast or multicast to fixed and portable devices, back in 2013. Urner says SES will “definitely continue” with developing SAT>IP and supporting manufacturers. He adds that the firm has “a lot of ideas” for how to come up with other IP applications, related to areas such as navigation and TV guides.

“Satellite led the deployment and penetration of HD TV and we expect the same to happen with regards to UHD.” Ignacio Sanchis, Hispasat

with high-speed IP technologies (Gigaconnectivity) and re-use cabling available in the home. Its main objectives focused on research and development activities related to various points on the distribution chain for multimedia distribution in the home. However, Sanchis claims that “last year we also reached the conclusion that if we want this to succeed and we want the consumer electronics companies to adopt this kind of solutions in their devices, we will probably better push a singular standard as an


According to Eutelsat’s Arcidiacono, “the convergence towards IP is opening up a whole series of services” that will be helpful “for the end-customer and for the broadcasters.” He says that Eutelsat started to develop products to marry the two worlds of broadcast and IP around five years ago, with an aim of not only delivering IP-content directly to end customers, but also providing interactivity. Eutelsat’s resultant Smart LNB enables it to offer low-throughput applications via

satellite. By swapping LNBs designed purely for reception of DVB TV with the Smart LNB, Arcidiacono says the antenna can “receive, demodulate, IP encapsulate and distribute to the home IP-streaming services, push VoD services and all sorts of IP services, while at the same time be interactive.” With Smart LNB, broadcasters and platform operators can expand their offers with in-home and interactive applications, covering the likes of audience measurement, home automation and security and e-health. Other areas of innovation for the satellite operators include evolving the design specs of the satellites themselves – deploying spot beams in the C-band, for instance. “Our current satellites are all Ku, but the future designs include the C-band spot beams as well,” says Ostapiuk at Intelsat. “Because of the greater efficiency [and] the more bits per MHz that we can transmit, we can actually decrease the cost of the transmission for regional channels.” He claims that deploying spot beams in the C-band will allow broadcasters to regionalise its output in smaller markets where they don’t already offer dedicated channels. Over at Hispasat, Sanchis says that it is expecting growth of Ka-based throughput satellite architectures, which will allow it to deliver multi-spot satellite broadband as part of a “full satellite triple-play” offering. With this innovation plan, he says “we will get the TV broadcast breaching the household on Ku wide-beams, and we will get broadband reaching on Ka spot-beams.” “We’re working on the technology. Most parts of the technology exist, but there’s still some developments and integrations to be done. We expect that these solutions can probably be available a few years from now,” says Sanchis. While consumer viewing habits may increasingly be turning to multiscreen and on-demand, the reliability, pricing and farreaching coverage of satellite – particularly for linear content – will keep it relevant for years to come. There is also room for satellite to grow in terms of innovating on the services that it can provide. With large areas of even developed countries still suffering from slow or variable broadband speeds, and pay TV operators keen to keep a competitive edge in a fragmented market, the advent of 4K is sure to arrive via satellite; just not on an exclusive basis. l


02/03/2015 18:01

Our world. The largest Arab community in the sky at 26º East. Your world.

www.arabsat.com

p29 Arabsat DTVE FebMar15.indd 1

27/02/2015 11:22

Cable Congress 2015 > Preview


Cable Congress 2015: the preview Cable Congress returns to Brussels this March with a packed lineup of speakers ready to discuss the latest developments in the European cable market.

This

year’s Cable Congress comes on the back of an eventful year in the cable industry with consolidation and fixed-mobile convergence the order of the day. Last March Vodafone agreed to acquire Spain’s Ono for the equivalent of E7.2 billion in its second blockbuster cable deal following its buyout of Kabel Deutschland, which closed in Ocotber 2013. Elsewhere, Liberty Global completed its tender offer for Dutch cable operator Ziggo back in November, with Liberty CEO Mike Fries predicting the deal will drive “substantial cost and revenue synergies” with its Dutch subsidiary UPC Netherlands in the coming years. Both Fries and Vodafone’s European CEO Philipp Humm are due to keynote at this year’s Cable Congress, with Fries’ on-stage interview set to close day one of the event and Humm’s presentation to open day two. Other speakers confirmed for the event include RTL Group co-CEO Guillaume de Posch, who will discuss the ‘digital transformation of the TV industry’ – in particular industry fragmentation, non-linear viewing and competition on the distribution side from tech powerhouses like Google, Netflix and Amazon. Organised by Cable Europe, the not-for profit organisation that aims to connect leading cable TV operators and their national trade associations, Cable Congress will this year focus on the interplay between platforms and content. In an increasingly converged world, it will look particularly at the challenges and opportunities emerging from this new media landscape. “The last year will go down in cable history as one of strategic shifts, featuring greater investments in mobile and new partnerships with content and technology players. Cable has always been a technology leader, making massive investments in infrastructure and bandwidth to enable a truly smart pipe capable of delivering best-in-class customer experiences,” says Cable Europe executive chairman, Matthias Kurth. Kurth, alongside Liberty Global senior

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Liberty Global CTO Balan Nair will speak at this year’s Cable Congress.

vice-president and chief policy officer, Manuel Kohnstamm, will open this year’s Cable Congress. They will also introduce the opening panel, which will be a ‘view from the top’ discussion by: Google’s president, EMEA business and operations, Matt Brittin; Turner Broadcasting System’s president EMEA, Giorgio Stock; Kabel Deutschland CEO and Vodafone managing director Manuel Cubero; and SES Platform Services chairman Wilfried Urner. Later on in the opening day a ‘technology trends and new frontiers’ panel will consider how cable MSOs now have to operate multiple services across increasingly heterogeneous networks. This is thanks to the addition of mobile services and the move to FTTH. Liberty Global CTO Balan Nair and NBCUniversal International’s senior vicepresident, operations and technology, Andrew Jordan will share their views on this topic. Day two will open with a panel looking at how programme makers are adapting to and profiting from new digital technologies, featuring the managing director of Shineowned digital producer ChannelFlip, Claire Tavernier, and the distribution director of BBC Global News, Colin Lawrence. A money panel will follow after the morning coffee break, looking at growth opportunities in the context of continued shifts in cable company ownership structures.

The afternoon of day two will split into three tracks looking at technology, marketing and policy. The latter of these includes panels on the future of telecom regulation and the ongoing transformation of the content landscape and will feature speakers from the European Commission and European Audiovisual Observatory. The third and final day of the conference will round things out with the continuation of the technology and marketing tracks. Day three’s technology track will consider topics like virtualisation strategies for homes and businesses and the advances in distribution architectures. The marketing track will look at, among other things, the next generation of entertainment discovery, while Viacom’s vicepresident of research and insights, Christian Kurz, is due to present new research about how television viewing habits are changing. “This year’s Congress will highlight our increased integration with content creators, apps players and over-the-top platforms, the role private sector investment should play in our future, and pathways to better regulation – all while keeping the consumer top of mind,” says Kurth. Cable Congress will run from Wednesday March 11 to Friday March 13 at The Square meeting centre, Mont des Arts, Brussels, Belgium.


02/03/2015 19:41

NAB 2015 > Preview


NAB 2015: the preview With the NAB Show due to kick of at the Las Vegas Convention Centre on April 11, DTVE highlights some of the new innovations that will be on display. Broadpeak STAND SU6118

WHAT’S NEW? CDN in a Box WHAT DOES IT DO? Broadpeak’s ‘CDN in a Box’ solution is designed to simplify video streaming service deployments by providing operators with: Cloud PVR TV capabilities; the BkM100 CDN Mediator, a unified CDN manager; the BkA100 video delivery analytics software solution; fast channel change technologies for live IPTV services; and the umbrellaCDN selection solution. The Cloud PVR TV capabilities let operators offer start-over, time-shifting, and catch-up TV, as well as impulsive recording, while only storing content once. Meanwhile, the BkM100 CDN Mediator manager features an enhanced GUI and new bandwidth optimisation features that enable operators to limit the number of devices that can simultaneously access a service within the home, and adapt the bitrate of streamed content to the type of device. CONTACT www.broadpeak.tv

Globecast STAND S215LMR WHAT’S NEW? US Media Factory WHAT DOES IT DO? Globecast is introducing a range


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of US market developments to its media management capabilities. This follows its recent completion of a new Media Factory facility at Culver City, California, as well as a new Media Hub in Miami. Globecast says that this significant investment strengthens its presence in providing media management and playout services. The new facilities in LA and Miami, along with already established Media Factories in Singapore, London, as well as the Media Centre in Paris, form a global, interconnected network that can deliver media services to all locations. CONTACT www.globecast.com

Grass Valley STAND SL206 WHAT’S NEW? Glass-to-Glass IP Solution; Karrera K-Frame S-series Video Production Center; LDX 4K Camera System; Pegasus SDN; K2 Dyno Replay System with DynoZoom WHAT DOES IT DO? Grass Valley’s “Glass-to-Glass” approach to IP spans a range of products used in production and playout applications, including cameras, servers, production switchers, routers, multiviewers, IP gateways and control systems. The solution uses proven IT technologies, such as commercial off-the-shelf IP routing switches and Software Defined Networking (SDN) control, to maximise flexibility. The Karrera K-Frame S-series Video Production Center has multiformat support including 1080p and 4K. The LDX 4K Camera System is designed for sports and live production content. The Pegasus

SDN is aimed at customers that want to transition to IP alongside SDI, while the K2 Dyno Replay System with DynoZoom can be applied to high frame-rate camera systems including 3X 1080p, 6X and 4K/UHD. CONTACT www.grassvalley.com

high-quality graphics, branding, and playout functionality and offers increased operational flexibility in a single 1-RU appliance. CONTACT www.harmonicinc.com

Netia STAND C1759

Harmonic STAND SU1210

WHAT’S NEW? Electra X Advanced Media Processor Family WHAT DOES IT DO? Harmonic will demo the latest generation of its Electra product line, the Electra X family of advanced media processors for broadcast and multiscreen content delivery. Harmonic claims the Electra X is the first encoder family to support graphics, branding, and playout functionalities, as well as high quality video and full-frame Ultra HD live encoding. Powered by the Harmonic PURE Compression Engine, Electra X’s appliance-based media processors are designed to boost video compression efficiency across a range of formats and codecs — including MPEG-2, AVC, and HEVC codecs — over CBR, VBR, and ABR encoding schemes to support a broad array of devices from handhelds to UHD TV. The multicodec and multiformat nature of Electra X makes it suitable for video processing by broadcast, cable, satellite, and telco operators. The Electra X2 media processor also integrates real-time SD and HD encoding,

WHAT’S NEW? NETIA Media Assist Software Suite WHAT DOES IT DO? NETIA’s new Media Assist software suite unites the functionality of its radio broadcast automation and media management products with a SQL database, which provides a cross-media-production asset management system. NETIA says that with this new solution, users can manage all types of content, in any format, on any platform, from anywhere and at any time. Media Assist’s new media sharing features allow content or media assets to be published or exported to cross-media platforms, and also allow the sharing and exchange of content across multiple sites within a broadcast operation. The Media Assist software suite includes a client platform and a web-based interface. NETIA says this will allow journalists to go fully mobile while maintaining their ability to access, search, edit, and repurpose content. Integrated audio and video editing tools enable content to be delivered from the field. CONTACT www.netia.com

31 02/03/2015 19:30

ANGA COM 2015 > Preview


ANGA COM 2015: the preview Ahead of this year’s ANGA COM, the event’s managing director Peter Charissé talks to DTVE about the rise of online video, net neutrality and regulatory issues – just some of the topics that are likely to get people talking on the tradeshow floor in June.

What are the main themes of this year’s ANGA congress? In the area of television we have the key words ‘Multiscreen’, ‘TV Everywhere’, and ‘All over IP’ at the top of the agenda. With regards to broadband, network rollout in regions that are still poorly served remains a permanent issue. In this field, there will be many investments over the coming years. In Germany especially, new state subsidy programmes that are running into the billions will add momentum.

What strategic and regulatory issues do you expect to be high up the agenda this year? Future developments in premium content, both in traditional pay TV and online video,

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will be an important strategic issue. In the regulatory field we even have two panels planned on net neutrality and one on issues in media competition law. The president of the Bundeskartellamt, the German Federal Cartel Office, has already confirmed his participation in the latter.

With the high-profile launch of Netflix in Germany in 2014, how is the German cable industry responding to changing viewing habits? Do you expect further disruption from the online video market in 2015? As to Netflix, in Germany it’s still too early to say how it impacts the market as the launch occurred only last autumn. However, maybe we’ll know more in June, when ANGA

COM takes place. In general, we think that competition in premium content will increase in intensity. Most importantly, viewing habits of TV users are actually changing. Our cable companies are responding to this with IPTV offerings of their own that complement the traditional cable TV offering and can also be used with tablets, PCs and smartphones.

How important a topic do you think net neutrality will be in 2015? Is all web traffic equal and should cable providers be expected to shoulder the burden of delivering the web’s considerable video traffic? This year, there are many decisions to be made during the regulatory debate on net neutrality – on a national and on a European


02/03/2015 19:40

ANGA COM 2015 > Preview


level. Our focus is on the refinancing of the network upgrades continually necessitated by the new online video services. There has to be a fair distribution of the added value. The network operators also have to participate in the new revenues achieved via their networks. To this end new business models must be possible, offering customers and service providers added value by quality-assured services. A ban on the marketing of particular transmission qualities is the wrong approach; it would primarily have an adverse affect on the opportunities of smaller companies to enter the OTT market. The principle of nondiscrimination has to be the major focus, however, not solely when it’s to the network operators’ disadvantage but also when it’s to their advantage.

“There are many decisions to be made during the regulatory debate on net neutrality on a national and European level.” Peter Charissé, ANGA COM

Do you think the relationship between cable operators and content providers will change or evolve as more online content providers start to emerge? Definitely. It’s the order of the day for traditional TV cable operators and traditional TV broadcasters to cooperate even more closely, for example in the marketing of videoon-demand.

How realistic do you think the prospects are for further consolidation in the German cable market? Our cable operators are currently very well positioned in the competition. Nonetheless, it is our impression that the European Commission now takes a less critical stance on mergers than it used to do on a national level.

How important to cable TV providers is the ability to offer quad-play services now becoming? Will the walls between mobile and fixed line operators continue to crumble? Quad play has become an important topic for German cable operators. Due to the limited or at least more costly data volume in mobile broadcasting there will, however, remain significant differences in product design and pricing in the area of TV and video for the foreseeable future. Therefore, it is not to be expected that fixed and mobile will become completely interchangeable.

What industry associations will be present at ANGA COM this year and what will they contribute to the show? We are now partnering with 12 industry associations who will in particular take an active part in our congress panels. In addition to all leading German broadband associations these also include partners from the US, the UK and Austria. This underlines our international orientation, which has already resulted in recent years in one in two of the ANGA COM visitors in Cologne coming from abroad. l ANGA COM will run this year from June 9 – 11 at the Congress-Centrum Kölnmesse in Cologne, Germany.

ANGA COM: Last year’s event attracted 17,000 participants from 70 countries, a 1.5% increase compared to 2013.


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33 02/03/2015 19:40

Technology > in focus


Technology in focus Infrastructure, equipment and product news for digital media distribution

In Brief

UK UHD screen market passes 200,000 a year

German TVs go large

Ultra HD flat screen sales are growing at a faster rate than expected in the UK and other European markets, according to Nigel Catlow, business group director, consumer electronics at GfK. Speaking at SES’s Ultra HD conference in London in February, Catlow said that 200,000 UHD flat screens had been sold in the UK last year, up from 62,000 in 2013, with France and Germany turning in similar volumes. Germany recorded 211,000, up from 57,000, while France saw sales of 196,000, up from 64,000. Catlow said that GfK has grown more optimistic about sales, predicting UK sales of 1.68 million units by 2016, representing 26% of the volume of the market. Catlow said that 75 UHD models were on sale at the end of 2014, up from six in July 2013. Three quarters of UHD sets are from the top four brands. In the 60-inch plus screen size segment, two thirds – 62% – of the value of sales is now on UHD products, compared with 23% of total TV sales, he said. Catlow added that manufacturers need to encourage innovation to keep prices up and are therefore pushing affordable 50-inch-plus TVs. To put the figures in context, said Catlow, cumulative flatscreen sales by the end of last year numbered 68.9 million sets in the UK, meaning flat-screen sales are therefore now a replacement market. Innovation from manufacturers over the past 10 years has included a massive increase in screen

The popularity of larger screens boosted German TV sales in 2014, but the value of sales fell year-on-year due to continued price erosion, according to figures released by consumer electronics trade organisation the GFU. According to the organisation, TV sales were up 3.8% in terms of units shifted in 2014, with larger screen sizes of 37 inches and over accounting for €3.6 billion worth of sales and 80% of the market.

Middleware to pass $2bn The global TV middleware market was worth US$1.05 billion in 2014 and will reach US$2.03 billion by 2020, according to new research by Frost & Sullivan. The US-headquartered consultancy firm said that the surge in IP-enabled video devices like smart TVs, smartphones and tablets is “compelling pay TV middleware solution providers to deliver a unified multiscreen experience to viewers.”

Telefónica selects Verimatirx Telefónica has partnered with Verimatrix to provide “enhanced revenue security” for its Spanish IPTV service, Movistar TV. Telefónica has deployed the Verimatrix Video Content Authority System (VCAS) for IPTV to protect revenues for Movistar TV’s premium channels, with service to be scaled to protect the entire offering.

34 p34-37 Tech FebMar15v3st.indd 34

size combined with a reduction in screen footprint in the home. Catlow said that demand in the future would primarily be driven by bigger screens and retailers sending out a message that bigger screens “are the future”, rather than on assumptions about the availability of 4K content. He said that 6.5-7 million flatscreen sets a year are being sold, mostly to replace existing sets, a significant reduction in volume from the peak of flat-screen sales in the mid 2000s. Screen sizes increased on average by one inch a year until 2013. In real terms, prices have declined relative to screen size. Catlow said more

affordable bigger screens would fuel interest in 4K. Looking at 50-inch screens, these now account for 30% of the market and this segment is growing fast, said Catlow. Alongside this, sales of sound bars have grown rapidly to almost 900,000 units a year. In 2013, UHD sets cost £3,687 (e5,080) on average. This has fallen to under £1,500 in 2014. Monthly volume of sales has risen to 62,000 by December 2014, taking off rapidly in the fourth quarter. By December, the average price was just over £1,100. Average screen size for 4K sets fell in 2014 from 58 inches to about 50 inches. Earlier, the UHD conference’s guest speaker, broadcaster and journalist Andrew Neil, said he saw UHD as a step change on par with the transition to colour TV in the 1960s and something, unlike 3D, that “people will want.”

Russia’s GS Group develops hybrid console-TV receiver Russia’s GS Group has developed a device that is designed to combine the functionality of a games console and a digital HD receiver. The set-top box maker and technology firm presented a prototype of the device at the Winter Nights Mobile Games Conference in St. Petersburg in February, having first unveiled it at the CSTB television and telecoms expo in Moscow in January. GS Group said that the console

supports video-game playback on the TV, various channels in HD and is currently being developed in cooperation with eastern European video-game developer, Sperasoft. “The new console is close in the technical characteristics to the flagship models of modern mobile device manufacturers, which support today’s games. The console has a high performance CPU and powerful graphics accelerator,” said GS Group.


02/03/2015 20:31

News > in focus


Deutsche Telekom launches kids-focused app

In Brief

Deutsche Telekom has launched myKIDIO, a new family-oriented app featuring audio books and videos for smartphones, tablets and in-car entertainment systems. The myKIDIO app from local magazine publisher BurdaNews and Telekom is aimed at kids aged three to 13 and provides audio books, audio dramas, films and TV shows, all selected by the staff of BurdaNews-owned TV Spielfilm. BurdaNews will be in charge of marketing and customer relationships for myKIDIO, while Deutsche Telekom will handle the app’s functionality, operate the platform and advance the technology for use in the car. The app will be available as part of the BMW ConnectedDrive service in BMW cars. If children

Kudelski posts solid results

The myKIDIO app is aimed at three to 13 year-olds and features videos and audio books. are running the app on their smartphone or tablet, parents can control the app on their children’s device through BMW ConnectedDrive. Customers will be able to download the app from the Apple App Store and Google Play as of April. Interested customers can either take out a monthly subscription for e8.99 or purchase a two-week pass for e5.99. They can use their user account to sign on to the app for up to three devices at the same time. Content providers include Kiddinx, Sony Music, der Hörverlag, Silberfisch, cbj audio, Wellenreiter, Lübbe Audio,

Baumhaus, Argon, Highscore, Cocomico, ZDF Enterprises and the RC Release Company with a selection of programs from WDR mediagroup, Bavaria Media, rbb media, Icestorm Entertainment/ DEFA and Morefilms. The app was designed and built by Saffron Digital in partnership with Deutsche Telekom Business Development and Innovation (BDI). Burkhard Graßmann, CEO of BurdaNews, said, “We are bringing our digital and journalistic expertise to this new venture so that we can offer families with children attractive, educational entertainment options.”

UHD tech alignment close to ‘tipping-point’ The Ultra HD display market is now approaching a “tipping point” when standards will be fully supported and consumer services will be deployed, but a number of interoperability issues and universal support for accepted standards are still work in progress, according to Richard Lindsay-Davies. The CEO of UK industry body the Digital Television Group (DTG), which has completed two ‘plugfest’ events to test interoperability in displays and has planned a third for April, said: “It is critical that we make sure what is created in the studios appears correctly on the screen and CE products deliver what consumers expect. The only way this innovation will work is if the industry collaborates openly.” Speaking at the SES UHD conference in London in February, Lindsay-Davies said that the five key areas being worked on at the DTG plugfests are higher screen resolution, higher frame rate,


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Lindsay Davis: UHD consumer services will soon be deployed. wider colour gamut, higher dynamic range and object-oriented surround sound. The second and most recent plugfest organised by the group tested the ability of screens to play HEVC signals in the main and main 10 profiles across a variety of resolutions, frame rates and bit depths. Lindsay-Davies said the test had shown there was still limited support for the HEVC compression standard, with 60% of models tested not supporting it and 10% only supporting HEVC at 25/30Hz. However all 2015 models tested supported 50/60Hz UHD HEVC. “The market is probably approaching a tipping point for the deployment of services,” he said. Nevertheless, there are a number of outstanding issues, including that only half the

models tested supported MPEGDASH adaptive bit-rate streaming, claimed Lindsay-Davies. The next plugfest in April will test HDCP 2.2 copy protection, looking at whether all legacy sources will work with HDCP 2.2 displays and what experience viewers will get with HDCP 2.2 into lower version displays. Lindsay-Davies said the DTG will also look to reach out to a wider group of manufacturers and will invite a bigger range of AV and home cinema brands to be tested. Lindsay-Davies said that the second plugfest showed that considerable progress had been made since the initial event.

TV technology provider Kudelski has posted solid full-year results, with revenue growing 7.1% to CHF895.1 million (e920 million) and operating income growing by a quarter to CHF68.1 million. Net profit grew from CHF39.4 million to CHF50.4 million. Kudelski said that the appreciation of the Swiss franc will have “a materially negative impact” on its 2015 revenue and operating income as the vast majority – 90% – of its revenues are dollar or euro-denominated, while 25% of its costs are in CHF.

NRK taps Arkena Norwegian public broadcaster NRK has signed a contract with Arkena to provide CDN services for its streaming activities alongside two other vendors. In 2014, NRK streamed 120 petabytes of data to its audience, and this year NRK expects volume to be over 200 petabytes. “NRK is Norway’s largest and most experienced purchaser of CDN services and performed a thorough quality review before deciding on the suppliers,” said Richard Löfgreen, managing director at Arkena Norway.

Applicaster raises US$10.5m Israel-based cross-screen TV app provider, Applicaster, has raised US$10.5 million (e9.4 million) in funding. The new cash takes the firm’s total funding to date to US $18.5 million, with the new round led by Pitango Venture Capital with participation from current investor, 83North. Applicaster claims to have so far launched more than 100 applications for over 40 customers around the world, including Endemol and FremantleMedia.

35 02/03/2015 20:31

Technology > in focus


In Brief

HDR and UHD introductions ‘should be separate’

Zenterio teams with Xroadmedia

High dynamic range (HDR) is “too big a topic” to be simply linked to the rollout of Ultra High Definition content, according to SES’s vice-president, reception systems, Thomas Wrede. Delivering the closing keynote at the SES Ultra HD conference in London in February, Wrede said that HDR promises to “change television forever” and greatly improve picture quality. However, he said that attaching its introduction to Ultra HD will mean that the industry will have to come up with an Ultra HD HDR standard, and then an HDR standard for HD as well.

TV technology company Zenterio has teamed up with content discovery specialist XroadMedia to integrate the latter’s personalisation service Ncanto into Zenterio OS. Zenterio OS will support XroadMedia’s content discovery software Ncanto that finds relevant content based on consumers’ behaviour, interests and social profiles.

Teleste secures KDG deal Finnish technology provider Teleste’s Cableway AG subsidiary has secured a contract with Vodafone-owned Kabel Deutschland to upgrade and maintain its cable networks. Cableway has signed a three-year frame agreement with Kabel Deutschland with a one-year option on the upgrading and maintenance services of cable networks. According to Teleste, the contract will be worth between e50-60 million a year.

Samsung Tizen UHDTVs Consumer electronics giant Samsung has launched its first Tizen-powered ultra HD TVs in its home market of Korea. Samsung is selling four TV models with the Tizen operating system it originally developed as a rival to Android in the mobile phone world, with screen sizes ranging from 55- to 88-inches. The smallest model currently costs KRW5.49 million (e4,400). The launch comes after Samsung said in January that its entire range of 2015 smart TVs would be Tizen-powered. The Tizen initiative has suffered from delays and strategy shifts. Last year, Samsung said it will target emerging markets with Tizen-based phones.

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Wrede: HDR is too big a topic to be linked to the rollout of UHD.

“I think that this introduction is too big a topic to be just linked to Ultra HD. So maybe we need to decouple the launch of Ultra HD, initially at least, from HDR, also because HDR is very relevant for HD as well,” said Wrede. He added that, arguably, the same principal should apply to high frame rate (HFR): “I wonder if we must not decouple the image

capturing frame rate and the frame rate which is used in the displays from the transport frame rate?” Speaking more broadly, Wrede said that Ultra HD is “here to stay” and will “further enhance consumers’ television experience”. However, he said “live encoders need to improve further”. He also said that phase two of the DVB-UHD specification should be backwards-compatible with phase one, otherwise the industry will be “shooting itself in the foot.”

Humax to launch first Freeview Play set-top box Set-top box supplier Humax has said it will be the first manufacturer to deliver the new Freeview Play connected TV service later this year. The Humax Freeview Play boxes will support HD content and feature built-in WiFi for wireless broadband connectivity to access Freeview Play’s range of catch-up services, which includes BBC iPlayer, ITV Player, 4oD and Demand 5. Three built-in tuners will provide advanced recording functionality alongside the catch-up and on-demand services, according to Humax, with the option of 500GB and 1TB built-in

hard drives for up to 300 hours and 600 hours of storage space, respectively. Further details on the price, features and specifications of the Humax Freeview Play boxes will be made available in the coming months. Freeview unveiled Freeview Play, its new connected TV platform, last month. It said that the service would be available in a range of new TVs and set-top boxes, while individual manufacturers will be responsible for any deals to bring additional catch-up and online services such as Netflix to the platform. Panasonic has already announced that it will incorporate

Freeview Play in its new 2015 line of smart TVs. Freeview has also said that Vestel will launch a range of Freeview Play products. Graham North, commercial director at Humax, said: “The launch of Freeview Play marks a significant milestone moment in the UK’s broadcasting industry and our role as the lead set-top box manufacturer further reinforces the long-term relationship between Humax and Freeview. Our new range of set-top boxes will bring advanced recording features that compliment catch-up TV, on-demand services and live television.”

Arris secures 4K gateway deal with Liberty Global Arris has agreed a 4K video gateway deal with cable giant Liberty Global, according to company CEO Bob Stanzione. Speaking on Arris’ quarterly earnings call, Stanzione said that Arris will provide Liberty with a gateway platform that supports 4K Ultra High Definition video

and that the deal will help Arris to further its “international market and portfolio expansion.” Asked to give further detail on the 4K Liberty deal, Arris’ president of customer premises equipment, Larry Robinson, said that the next generation platform program that Arris is working on

“should be applicable throughout a number of other properties and deployments.” Announcing its Q4 and full year 2014 results, Arris said that it introduced several key products last year and “achieved important design wins” that are scheduled for launch later in 2015.


02/03/2015 20:31

News > in focus


Technicolor unveils Drive 2020 strategic plan

In Brief

France-based TV technology company Technicolor has unveiled a new strategic plan aimed at capturing growth opportunities in the media and entertainment services market, creating relevant new and valuable IP assets in media and entertainment from direct research investments and its operating businesses, and deepening the competitive advantages of its operating businesses. The group said it would expand its patent licensing platform and develop new licensing models. For its M-GO streaming service, Technicolor said it would expand its offering, building greater scale, and increasing geographic reach, organically and via partnerships. Technicolor said it would also grow its production service and technology platform from its cur-

Intelsat teams with Azercosmos for new satellite

rent position in creative skills and technology to capture share in the growing film, TV and advertising segments and expand in OTT, games and animation markets. For the connected home segment, the company will seek to strengthen its efforts in emerging markets, particularly in Asia. The group will also aim to build on its current key customer relationships and product development expertise to provide a broader range of products and services, including OTT devices. The Group aims to reach an adjusted EBITDA of around e400 million and a free cash flow comprised between e160 million and e200 million in 2017, which will be the low point in terms of financial performance due to the end of the MPEG-LA licensing

programme. Technicolor has set the objective to return by 2020 to an adjusted EBITDA above e500 million with a free cash flow in excess of e250 million. Technicolor posted Q4 revenues of e981 million, up e22 million, driven by direct licensing revenue, and net income of e128 million. “I am extremely proud of the work done by everyone in Technicolor to deliver a fantastic performance in 2014 resulting in a positive net income and the initiation of a dividend. As we now embark on our Drive 2020 strategic plan, we will remain fully focused on creating shareholder value as a leader in media and entertainment services, developing and monetizing video and audio technologies,” said CEO Frédéric Rose.

VideoLAN’s VLC to support Google Chromecast

Ofcom white space approval

Video technology specialist VideoLAN has revealed that its popular VLC video player will support the Google Chromecast HDMI dongle, allowing VLC users to stream video and audio files from the VLC application to flat-screen TVs. The addition of VLC to the range of options offering support for Chromecast will widen the device’s appeal, providing a reliable means of streaming users’ own media to the TV. VLC support for the streaming media dongle, which was uncovered by US website Pocket Lint, will reportedly be part of the release of VLC 3.0, but no timeframe has been given for this. According to the reports, the update to VLC will extend Chromecast support to content streamed from iOS and Android devices as

Ofcom has approved new wireless technology that will give access to TV white spaces – unused parts of the TV frequency band. The UK broadcast regulator said new wireless applications for businesses and consumers will run on the white spaces, with the new technology due to be deployed by the end of 2015. The wireless technology will access the radio spectrum in the 470 to 790 MHz frequency band, sharing this with Digital Terrestrial Television (DTT), including local TV. “White space spectrum in the TV frequency band is appealing for industry because it can travel longer distances and more easily through walls than the bands mainly used by other wireless technologies, such as Bluetooth and WiFi,” said Ofcom. Industry is already testing a range of uses for the technology.


p34-37 Tech FebMar15v3st.indd 37

Chromecast: Viewers will now be able to access VLC through the Google streaming stick.

well as PCs. Separately, Video site Vimeo has added support for Chromecast to its iOS app for iPad and iPhone. Viewers that update to the most recent version of the Vimeo app will be able to ‘cast’ content to their Chromecast-connected TV. Vimeo said that though the feature is currently only available on iOS, it is working to bring Chromecast support to other devices. Vimeo can already be accessed on other streaming and web-enabled TV devices such as Apple TV, Roku, Xbox and Amazon Fire TV.

Intelsat has partnered with the national satellite operator of Azerbaijan, Azercosmos, to launch a new satellite that will be located at the 45° East orbital position. The Azerspace-2/ Intelsat 38 satellite is scheduled to launch in 2017 and will provide continuity of service for the Intelsat 12 satellite currently stationed at 45° East. This orbital location currently hosts DTH platforms and provides connectivity for corporate network services in Africa. The new Intelsat 38 satellite will also provide services across central and eastern Europe, Asia and Africa.

HbbTV 2.0 specification The HbbTV Association has released the specification for Hbb 2.0, paving the way for a “new wave of consumer TV services.” HBB 2.0 will support HTML5, MPEG-DASH and advanced video delivery features like Ultra HD and HEVC, with the first compliant receivers expected to be released during 2016. The new standard will also support companion devices, including communication between an app on the second screen and an app on the TV, and synching between the second screen with media on the TV. Using the same DIAL technology as Chromecast, viewers will be able to use a tablet or smartphone to browse for video and launch an HbbTV applicaton to watch it on the TV screen, said the specification. Other new features include: standardised delivery of Ultra HD content with HEVC; and improved service accessibility with better support for subtitles in multiple languages.

37 02/03/2015 20:31

People > Places


On the move A+E Networks is to open a Johannesburg office as part of its expansion across Africa and has named Anthea Petersen as regional director, Africa – A+E Networks’ first hire on the continent. Petersen will be responsible for commercial development and marketing for A+E Networks’ local channel portfolio across Africa. She will also be responsible for opening the new Johannesburg office and building the local team. She will report to Bakori Davis, VP of commercial operations, A+E Networks UK. A+E Networks UK manages operations for History, Crime + Investigation and Lifetime in Africa. Petersen previously held senior positions at DStv Media/MNet and currently runs her own South African-based consultancy. Henrik Ravn has been appointed COO and CCO of the Germanspeaking broadcast operations of ProSiebenSat.1. He joins the broadcast group having left Discovery late last year amid a restructure at the factual giant that saw his responsibilities fall to Dee Forbes. At ProSiebenSat.1 Ravn will oversee the core free-toair business as well as work across new pay TV initiatives. He will report to company CEO Thomas Ebeling. The media company said that Ravn’s appointment will not affect its existing management structure. Wolfgang Link, head of the management board of ProSiebenSat.1 TV Deutschland, and Thomas Wagner, head of the management board of subsidiary SevenOne Media will both continue in their roles after Ravn joins ProSiebenSat.1.

38 p38 People DTVE FebMar15v4st.indd 38

Pay TV operator Canal+ Group has reshuffled executive roles after naming René Saal as director of broadcast channels and premium strategy for its Canal+ Overseas arm, effective March 2. Saal will report to Canal+ Overseas president Jacques Le Puy on strategy for premium channels and to content chief François Deplanck on broadcasting matters. The broadcaster has named Thierry Langlois, currently head of thematic channels, as director of broadcast channels for Canal+, replacing Saal, also effective March 2. He will report to Maxime Saada, deputy CEO of Canal+ in charge of pay TV channels. Claire Basini will replace Langlois in his current role as director of thematic channels, taking up her post on July 1 after working with Langlois in the interim. She will also report to Saada. Basini joined Canal+ from L’Oréal in 2011. UKTV has appointed Sinead Greenaway as director of operations and technology. Greenaway joins from international talent and consultancy business The Lighthouse Company where she was managing director. She has also served as CEO of The Studios at MediaCityUK, now Dock10, and operations and IT Director for Virgin Media Television. At UKTV she will take charge of both technology and all operational activities when she joins the company next month. She will report to UKTV’s chief financial and operations officer Jan Gooze-Zijl. The role is one

of the new positions created as part of an expansion of UKTV’s technology and operations teams, which the broadcaster announced in November. The expansion also follows the company’s move in July to its bespoke new office space in West London. FremantleMedia veteran Olivier Delfosse has been named COO of StyleHaul, Fremantle’s multichannel network sister firm within the RTL Group. At StyleHaul he will work closely on developing the business with CEO and president Stephanie Horbaczewski, working out of LA. At FremantleMedia, Delfosse drove global digital initiatives and partnerships with the likes of YouTube and Facebook as senior VP, digital. European channels group RTL took control of StyleHaul last year. Nick Thorogood is leaving Scripps Networks International. News of his departure comes as former EMEA boss Jon Sichel prepares to return to the US to take a new role with exDiscovery exec Phillip Luff about to take over the running of SNI’s EMEA operations. Scripps has also brought in another ex-Discovery international exec, Katharina Feistauer, as vice-president of programming, amid management changes at the company. She started in December, reporting to Thorogood, who was senior VP, content and marketing at Scripps. Russian pay TV provider Orion Express has named service provider MTS’s former head of

satellite TV Vitaly Studitsky as chairman. Studitsky, who left MTS on February 13, will be responsible for corporate development, compliance and communication with shareholders, working alongside CEO Aleksander Kaplinsky. Orion Express reached 2.68 million homes at the last count, making it the secondplaced satellite player in the market behind Tricolor TV. Prior to joining MTS in 2012, Studitsky worked for VimpelCom and SkyLink before joining media group Amedia. Deutsche Telekom has named Christian von Reventlow as its new chief product and innovation officer, replacing Thomas Kiessling, who is leaving the German telco to become CTO at Securitas Direct. Von Reventlow was previously platform manager at Nokia’s map service and navigation system subsidiary Here.com in Chicago. He will take up his new position on March 1. Audience data and analytics specialist Genius Digital has hired Giles Cottle, head of strategy at UK digital TV platform Freesat, as its new director of consumer insight products. In his new role, Cottle will take overall responsibility for Genius Digital’s product portfolio, including strategic direction and development, positioning, pricing and business development. He will also be responsible for helping customers with post-sales strategy and analysis support. Please email contributions to: [email protected]


02/03/2015 20:23

© MIPTV®, MIPDoc® and MIPFormats® are registered trademarks of Reed MIDEM - All rights reserved. The Tunnel: © 2015 Shine International - The Voice : © 2015 Talpa Holding - Utopia : © 2015 Talpa Holding - Hasbro and its logo, transformers, transformers: robots in disguise and all related logos and characters are trademarks of Hasbro and are used with permission. © 2014, 2015 Hasbro. All Rights Reserved - © 2015 Viacom International Inc. All Rights Reserved. Dora and Friends and all related titles, logos and characters are trademarks of Viacom International Inc.

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23/02/2015 17:49

Final analysis > Kate Bulkley


“There’s lots of potential here, but also plenty of danger: 4G roll out in Africa is both a competitive risk to cable and satellite companies as well as a potential differentiator if you can include it in to your subscription.”

African adventures One

of the main questions for 2015 will be where the new growth is going to be found in the pay TV and broadband business. Finding new investment opportunities is for the committed, the visionary and the risk-takers. It means hunting out the most exciting markets for new investment and even new broadcasting ideas. One of the biggest regions with potential – as well as potential pitfalls – is Africa. Brazil, Russia, India and China – the BRIC countries – were grouped together because they were considered the next big development opportunity. South Africa was added in 2010 (BRIC becoming BRICS). In TV, pay TV operator Naspers, operator of M-Net, MultiChoice and DStv, has been one of the big winners there, also exporting its model outside of its home country quite successfully. More recently, investors and entrepreneurs looking for the next big growth opportunity have coined the phrase MINTS for Mexico, Indonesia, Nigeria and Turkey. Nigeria, the African member of the group, in 2014 surpassed South Africa as the biggest African economy and is home to a burgeoning indigenous film business, Nollywood, which produces about 50 films a week reportedly worth nearly US$600 million (e530 million) a year. Nigeria has become a magnet for pay TV start-ups and entrepreneurism is alive and well there. Yet there are contradictions as well. Nigeria is a country with 50% unemployment that is trying to deal with ongoing insurgency-based violence in its northern territories and other problems. There is demand for plain vanilla TV in Africa as well as more sophisticated services for a growing middle class. However, there are

40 p40 Final Analysis DTVE FebMar15v3am.indd 40

some cautionary tales in pay TV, one example being the demise of Nigerian start-up HiTV in 2011 after it overextended itself financially by buying up expensive sports rights that it then failed to monetise fast enough. Mixed models seem to be the key to Africa where a pay TV company like Strong TV, using the brand My Tele, provides set-top boxes to rivals as well as its own pay TV services to its own customers. Looking at the big picture, only 40% of TV homes in Africa are digital today, according to Informa Telecoms & Media. That number is expected to rocket to 90% by 2018. Euroconsult, NSR and IDATE data suggests that DTH subscribers will double globally to 137 million by 2023 with half the new subs coming from South Asia and sub-Saharan Africa. More than 120 million African homes will receive digital TV by 2018. The potential for mobile growth in Africa is also huge, because it is a ‘leapfrog’ technology, bypassing fixed line infrastructure that is either not there, not reliable or unaffordable. East Africa in particular has strong potential, according to Helios Investment Partners, which ploughed US$45 million in as part of a US$130 million funding round for pay TV operator Wananchi in October 2014. Wananchi, which operates the Zuku TV brand, was founded in 2008 by cable TV investor Mark Schneider, a member of the Schneider family that owned one the biggest US cable systems back the 1980s. Canny moves from connecting to an international broadband pipe to feed its Kenyan customers to hiring a reliable construction firm to “normalise” the construction costs of its network, mean that it is at an “inflection point” in terms of growth, according to Helios. It helps

that Wananchi is not just offering cable but also satellite-delivered DTH. It’s that mixed model approach, again. Helios expects Wananchi to break even this year and predicts the company could grow to 900,000 paying customers in five years with US$250 million of revenue and EBITDA of US$100 million. Not only does the upside of the investment case look good but the private equity firm also believes there will be an appetite among strategic players for Wananchi, which promises them an attractive investment exit strategy. Of course it helps that there are already two big strategic players in the investor portfolio, none other that Liberty Global, the company that Mark Schneider once ran, and Altice, the Swiss-based multinational cable and telecommunications investor. This gives Wananchi access to the scale economics necessary to keep their customer premises equipment costs down, for example. But investors need to be careful – there’s lots of potential here, but also plenty of danger: 4G rollout in Africa is both a competitive risk to cable and satellite companies as well as a potential differentiator if you can include it in to your subscription. There is a growing middle class across Africa but different regions have different issues, including unstable political and economic situations. You only need to look at Zimbabwe, saddled with a government that stifles entrepreneurism, to know that Africa, in particular, carries as much risk as it does reward when it comes to the future of the industry. l Kate Bulkley is a broadcaster and writer specialising in media and telecommunications. [email protected]


02/03/2015 19:29

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