Managed Broadband TV – A Decade Old Overnight Success

Editor’s Note:

The above video and the following notes represent what was presented as opening comments at the NTCA Southeast Regional meeting in Savannah, GA. The purpose was to set the baseline for a discussion regarding the latest developments in delivery of video services. Non-technical directors of telecom cooperatives were the target audience for this presentation.

A key take-away is that technologies developed for delivery over-the-top video, such as YouTube, can now be used to offer managed TV over broadband. Managed Broadband TV allows operators to extend their reach to homes that otherwise would not receive cable or IPTV service. In doing so, these operators are creating low-cost packages that enhance the value of broadband, while extending broadcast television and allowing customers to watch premium content via the Internet.

This is revision 1 of the video, as, at some point, we may incorporate some of interesting b-roll we have from at least one visit to an operator which has deployed such a system. Also, note that the voice over was recorded hastily in a hotel room in Savannah.

Managed Broadband TV

Managed Broadband TV services are on the verge of being an 11-year-old overnight success [See the Viodi whitepaper from 11 years ago on a hybrid offering that, in principle, is very similar to what today’s technology easily allows].

Managed Broadband TV services share many similarities with traditional franchised video services. One thing that both these services share in common is that they are limited to a geographic region. Inherent with both is that the operator has the ability to control the quality of the signal from headend to customer, as opposed to the wide open Internet.

Traditional video is familiar to the independent operators, as it has been around for 60+ years, first in the form of cable television (Community Antenna TeleVision – CATV) and then IP television (Internet Protocol TeleVision). Local broadcast signals are typically gathered with antennas and combined with channels from far-off locales via satellite dishes.

These networks use broadcast or multicast, in the case of IPTV, which is extremely bandwidth efficient as far as being able to share channels over the same network. The content is encoded at the same bit rate for all the clients, meaning the network must meet minimum bandwidth requirements. One of the big challenges for operators is that TV middleware has not allowed operators to innovate new services and interfaces as fast as they want; the Internet has sped by the typical CATV/IPTV system.

Over-the-top video is the phenomenon that has transformed broadband. YouTube, Netflix, Hulu and other services are streaming up millions of streams every second and have changed the way the majority of Americans consumer content. Over-the-top video started with the PC, then the mobile devices and now, the television. In general, broadband operators haven’t been able to directly benefit from over-the-top video; traffic flows through their network and to servers in remote locations.

Managed broadband TV combines some of the best elements of cable TV with over-the-top video. Managed Broadband TV is by its nature a unicast signal sent from a proxy or edge server, typically in the headend, to the home. If there are multiple TVs in a household, then there needs to be a stream per TV; even if the TVs are tuned to the same channel. The great thing is that the adaptive bit rate encoding “adapts” to the conditions, such that a lower bit rate, lower quality stream will be provided in bandwidth restricted environments; meaning it is possible to extend TV to areas with as little as 4 Mb/s down and 1 Mb/s up.

A big benefit is that to the Managed Broadband TV approach is that it provides a much faster time-to-market than traditional video services; think weeks, instead of years. The costs are much less than traditional video; tens of thousands, instead of hundreds of thousands or even millions. It is inherently a multiscreen service, as the customer can bring view on their tablet or on connected TV via a media player (e.g. set-top).

There are many media players that are available via retail, such as those from Roku, Google and Western Digital, that are compatible with a Managed Broadband TV service. This represents a new model whereby the consumer brings their own media player, or game console or tablet or connected television, saving the operator a significant amount in set-top capital expenditures, while giving the consumer freedom to watch on the device of their choice.

Both services offer broadcast channels and pay retransmission fees. The big difference is that the expanded basic and premium channels are brought by the customer in the Managed OTT approach, whereas these channels are inherent in a traditional video approach. Managed OTT is as close as it gets to an ala carte video offering.

The hallmark of the traditional video service is that they are governed by franchises provided by local governments. As shown in the video, the Designated Market Area (DMA) can overlap multiple franchise areas. As can be seen, there are rural areas beyond franchise areas where traditional video services don’t reach, generally due to the high costs associated with serving traditional video over low density areas.

In contrast, OTT video can be served up anywhere. There are no Designated Market Areas to OTT video. Unlike OTT, the Managed Broadband TV approach serves only a given DMA, respecting the current FCC rules for retransmission of broadcast signals. Broadcasters seem to love the idea of receiving retranmission revenues, particularly for what amounts to new subscribers that couldn’t have been served by a traditional video service.

The regulatory environment of Managed Broadband TV may be somewhat murky, as this is a new service. At this point, operators seem to be adhering as closely as possible to the traditional video services, in terms of fulfilling existing video regulatory rules.