Migration is the key challenge for US video service provision
Earlier this year we welcomed Rick Sailor to the SmartLabs team to lead our expansion in the USA and Canada. Over the past few months, Rick has been delighted to meet with industry colleagues face-to-face at the NTCA Summit, ACA/NCTC Summit, KY/TNBB Technical Conference, NRTC Annual Conference and CCSA Summit, Canada. We spoke to Rick about the feedback from these events, including the key challenges that service providers are currently facing and the opportunities that lie ahead.
“The US video market has changed dramatically over the last 15 years. Back then, video was a Business to Business (B2B) offering. Content providers sold their content to service providers who in turn, would resell it to their subscribers. Jump forward to today with streaming content providers like Hulu, Roku, Disney Plus, Amazon and some of the sports channels who are now going more Direct to Consumers (B2C) and cutting out the BB provider altogether. As existing 5 and 10-year transportation agreements expire, content providers are taking the opportunity to change their business model completely by going direct B2C. This affects all video service margins.
The risk in this B2C transition is that broadband providers get cut out of any or all video revenue. Several providers have already decided to withdraw from the video business completely. At the shows I have attended recently, there was a great deal of discussion around video - not simply with regard to streaming, but about how video fits with future plans for generating revenue with broadband providers.
Everybody recognises that streaming is absolutely the way to go. But finding the right method to make that transition is the problem. There’s no question that all video services are going towards (there now) a streaming-type device. Providers will have to migrate to compete. If companies are going to keep up and grow their video business at all, they have to change their video format and go streaming.
Streaming has huge advantages because of the reduced CAPEX outlay. There’s no need to buy specific IPTV Set-Top-Boxes (STBs), and then rent them to the subscriber, plus having to maintain them. With streaming, users can display the content straight to a Smart TV, PC, Tablet or other Android device. There are many ways to decode those ABR streams without an STB. Just like they do for Netflix and other streamers today.
Historically, if customers have a problem with their cable / IPTV signal (rented STB), they’ll call their provider. This triggers a customer service call to try and fix the problem and possibly even a truck roll to replace the STB. With streaming, users are much more likely to reboot their apps and fix problems themselves, leading to fewer CSR calls and truck rolls, reducing OPEX costs. Streaming users have a 70%+ chance of fixing their own video issue.
Millennials are already using an average of 4.7 apps to view content from broadband providers today. Streaming is like second nature to them. But there’s an older demographic that has had a cable / IPTV box for 15 years. They don’t know how to stream content and they don’t want to change. This is the main challenge for providers – “how do we, the service provider, get people to switch over, so that we don’t have to operate two separate systems at once, servicing both existing cable or IPTV subscribers and next generation streaming subscribers?” Smooth migration is the key to success !!
That’s where the SmartLabs solution really has an advantage. The system can look and operate like a cable / IPTV display for the older demographics, plus provide full streaming functionality for the younger generation. SmartLabs is android-focused which is really the way to go. It’s on the edge of technology, being app-based. So it’s the perfect bridge for historic, current and future users.
Many providers are scratching their heads about the migration question. Finding the best way forward for each scenario is the challenge and one that Smartlabs is uniquely experienced to help with. Disruption is part of the digital migration process. Looking back, it took some 10 years to migrate from rotary phones to touch-tone phones. Hopefully, it does not take 10 years to migrate from cable / IPTV to streaming, so the time to start migration is now !!
SmartLabs can make the migration to streaming as smooth, painless and profitable as possible, allowing providers to transfer existing video services and customers to the up-to-date powerful multi screen streaming service platform for existing cable or IPTV operators.
Well-established worldwide, SmartLabs has over seven million subscribers and has developed an impressive presence over the past thirteen years, working with brands including Baltcom, Starnet and O2 to name a few. The company has experience in creating solutions that operate on multiple devices, in managed and unmanaged IP, Hybrid DVB+ IP and mobile networks.
The US broadband / Telco market is still a face-to-face industry, where people want to be able to touch and feel new products and build relationships in person. The NTCA show in Nashville in September was the first show for me in some 18 months. There were some 1,500 attendees and everyone was very pleased to reconnect and meet face-to-face again. I am really looking forward to attending the R-Time show in February 2022. It’s going to be great to hopefully see folks there !!
Connect with Rick Sailor, SmartLabs’ VP for Business Development in North America, at the Rural Telecom Industry Meeting + EXPO (R-TIME) 2022 on February 13–16 in Dallas, TX.
All of us on the Smartlabs team look forward to seeing you!
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