THE CABLE OPERATOR S GUIDE TO MIGRATING FROM QAM TO IPTV

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1 THE CABLE OPERATOR S GUIDE TO MIGRATING FROM QAM TO IPTV TECHNICAL ISSUES, BUSINESS CONCERNS AND MIGRATION STRATEGIES TO ADDRESS IN YOUR IPTV TRANSITION PLAN

2 Market-Driven Transition The cable TV business is experiencing rapid change. Subscribers are mobile, content is fragmented and connectivity is utility. Consumers are insisting on a more engaging viewing experience, similar to what they re used to on the Web. They expect to view content on all of their devices at the time and place of their choosing. Today s user experience, particularly among millennials, is tied directly to the interface. Consumers are accustomed to the intuitive UIs and personalized experiences offered by streaming video services like Netflix, Hulu and Apple TV, and now expect a similar experience from their cable service. Traditional MPEG-2/QAM-based infrastructures are not designed to deliver the experience that today s subscribers expect. To solve this problem, operators are starting to migrate from QAM to an all-ip infrastructure. By migrating to IPTV, operators can deliver the personalized, engaging, multi-screen experience that today s subscribers demand, helping to retain and grow their customer base. The migration from QAM-based video delivery to IPTV isn t without its challenges, from cost considerations and scaling to choosing the right migration path and return-path data collection. This paper outlines the various migration options available to operators and provides straightforward overviews of the technology and business concerns associated with the migration to IPTV. IPTV meets today s connected consumers expectation to view content: Anywhere Anytime On Any Device 2

3 IPTV An Overview Internet Protocol Television (IPTV) is a system that delivers TV services via an IP-based network, such as a LAN or the Internet, rather than through traditional satellite signal and cable television formats. In traditional cable and satellite TV, the broadcast network is one-way. All content continuously flows downstream to the subscriber, who selects a program via the set-top box (STB). The user s program options are limited to the number of programs the provider can fit into the pipe flowing into the home. An IP network is a two-way digital system. Content remains in the network and only the content the customer requests is sent to the customer s home. IPTV streams media in smaller batches directly from the source. A client media player can begin playing the content before the entire file has been transmitted. With IPTV, operators can provide a much broader range of content to consumers. Services can include live TV, video on demand (VOD) and interactive TV (itv). IPTV Snapshot Uses Internet to deliver TV programming Delivers content upon request Features interactive and personalized content Allows content to be viewable on any screen Enables data collection and analysis from all devices Utilizes digitally switched rather than channel-based architecture Advantages of Migrating From QAM to IPTV IPTV systems provide significant benefits to both operators and subscribers. Viewers benefit from the availability of more content across all their devices and operators gain new revenue streams by offering new services. The several advantages of migrating to IPTV include: More Content IPTV enables operators to deliver more content to subscribers. With traditional cable infrastructures, operators must put every channel on the wire and the viewer selects which channel to view. This approach restricts the amount of bandwidth available to the operator. The switched broadcast capability of an IPTV system allows the operator to put only requested content on the wire. This frees operators from bandwidth limitations, allowing them to offer a nearly unlimited number of channels. Reduced Capital Investment The bulk of an operator s capital expenditure is STBs. IPTV dramatically reduces the operator s customer-premises equipment (CPE) investment while leveraging a wide variety of subscriber devices, such as TVs, mobile devices, gaming consoles and streaming media players. This shifts the cost of the hardware and hardware updates to the consumer. Improved Viewer Experience Migrating to IPTV allows operators to deliver a more compelling user interface and a more personalized user experience. Now that consumers are increasingly familiar with navigating and consuming video via mobile devices and the web, the search and navigation functionality provided by legacy middleware can be considered outdated and difficult to update or personalize. Because IPTV enables two-way interactivity, it can give viewers more options to interact, personalize their content and control their viewing experience. Operators can also update the look and feel of the UI virtually any time with only minimal interaction with the network. 3

4 Granular Analytics for Better Business Decisions IPTV gives operators the advantages of online analytics that deliver more granular and comprehensive business insights through real-time collection and analysis of STB and other device return-path data (RPD). RPD is the fuel that powers real-time, actionable insights for better business decisions and evaluation of new business opportunities. Through RPD, operators can take a big data analytics approach to measuring audience and network performance, leveraging RPD for programming rights negotiations and determining future technology investments. And by gathering granular usage data from subscribers, operators can utilize analytics for insights into operator network performance and for proof of advanced advertising performance. Compelling Content Discovery Today s consumers demand personalized and contextual discovery on all devices, everywhere. With IPTV, providers can use subscriber usage data to deliver highly personalized and relevant search results tailored to the device, location and time of day. Because IPTV systems are Web-based, some systems can customize search and recommendations results based on trending real-world items or user s social media activity. New Advertising Revenue Advertising is a key component of an operator s IPTV business model. The IPTV network can serve as a programmatic advertising platform, enabling operators to expand their advertising offerings by leveraging network and subscriber intelligence to provide highly targeted and interactive advertising across multiple devices. Operators can offer advertisers personalized, multi-screen campaigns by utilizing a wide range of criteria, such as geography, age, gender, purchasing habits and personal settings. Optimized Subscriber Value By leveraging subscriber viewing, billing and usage data, operators can identify which subscribers are likely to add products and services and which are likely to churn. Evaluating subscriber behaviors, operators can pinpoint crosssell and up-sell opportunities for focused marketing efforts as well as identify subscribers in danger of cancelling or downgrading services. Rapid Launch Of New Services Because IPTV set-top boxes are based on Internet Protocol, they function as web browsers that enable services to be launched or updated at Internet speed. Operators can quickly update their interface, introduce new services and perform bug fixes in the same way they would update a website. The ultimate experience for subscribers New revenue streams for operators 4

5 IPTV System Components From the user s perspective, IPTV is closer to browsing the Internet than traditional TV channel surfing. IPTV deployment is comprised of the following components: CDN Management Content Processing Billing Rights Management Streamer Encoder / Transcoder CMS Traditional HFC IP Network NMS EQAM CMTS LTE / DS / FXXT Clients Tablet / Smartphone Smart TV Home Gateway STB Components of an IPTV System Network and Associated Infrastructure: Routers, Switches, MPLS backbone, Multicast domains, CMTS, EQAMS, CCAP, CDN (Akamai), Storage Clients: Hybrid STBs, Pure IP based STBs, tablets, Phones, Smart TVs, Caching Home Gateways, Interactive and intuitive Content Search and navigation, Smart recommendation Video Processing Infrastructure: Video streamers, Transcoders including ABR transcoders, Packager, Rating, Ad insertion, Security DRM, Licensing Back-Office: Billing, Middleware 5

6 IPTV Strategies Though the need to migrate to IPTV is clear, the industry has yet to adopt one standard migration path. Some approaches are initially more cost effective, while others require more planning and integration. There are three common migration strategies for operators to consider: unicast, multicast or hybrid. Each one has its advantages and disadvantages. Unicast Transmission sends information from one sender to one receiver. Unicast delivery provides a range of benefits including rapid channel change time, a personalized and interactive viewing experience and targeted interactive ads. A disadvantage of unicast transmission is that since each viewer has a unique stream, its steep bandwidth consumption can carry a high price tag. A high number of unicast sessions means an operator will spend more on DOCSIS and content delivery network (CDN) resources to support each of those sessions, even though recent advancements in video encoding such as High Efficiency Video Coding (HEVC) provide significant improvements in bandwidth utilization. Multicast Transmission simultaneously sends information from one or more points to a group of clients. Multicast is useful if a group of clients requires a common set of data at the same time or if the clients are able to receive and cache common data until needed. A benefit to Multicasting is its minimal bandwidth requirements when a group of customers view the same program, bypassing a unique stream for each end point. Though multicast transmission provides the most efficient bandwidth utilization, disadvantages include slow channel change time, potential performance issues due to UDP/RTSP packet loss over DOCSIS and the lack of a personalized (on-demand) viewing experience. An alternate approach under consideration would uitilize a home caching gateway, caching content received via multicast while allowing home devices to connect to the gateway device via unicast. This offers the best of both worlds, but comes at the cost of installing the gateway devices in homes. Hybrid Transmission employs hybrid STBs that allow for a gradual transition of QAM-based channels to pure IP-based channels over a period of time. With the hybrid model, subscribers are connected to both IP-based transmissions and traditional QAM-based transmissions, allowing operators to benefit from both IP and traditional MPEG-2 transport. A hybrid gateway is a moderately expensive device within the home that connects to a traditional QAM via multiple tuners. If an operator wishes to deliver services to other IP-connected devices and STBs in the home, the hybrid gateway performs the decryption and transcoding from CableCARD-encrypted MPEG-2 to ABR delivery for each device that is used concurrently. The hybrid model can be advantageous because it enables a gradual migration to IP. It doesn t require a large upfront network investment, the only investments are in home devices. This allows the operator to control costs based on how many subscribers are introduced to the solution. The main drawback of a hybrid approach is the high cost of the home gateway, which can require heavy expenditures across an entire subscriber base. Also, this solution isn t future-proof. The equipment would be expensive to replace, reducing the chances of an operator being able to support new standards and emerging technologies. 6

7 Which Migration Strategy is Right for You? IPTV Transmission Method Unicast Advantages Rapid channel change time Personalized and interactive viewing experience Targeted, interactive ads Disadvantages High bandwidth consumption High cost of bandwidth and CDN resources Multicast Lower bandwidth requirements Slow channel change time Lack of a personalized (on-demand) viewing experience Expensive home gateway Hybrid Gradual IP migration Smaller up-front investment Best of both worlds Limited support of new technology Expensive home gateway Whichever migration path an operator chooses, moving video delivery from QAM to DOCSIS will increase the operator s CMTS capacity. This issue is currently being addressed by Converged Cable Access Platforms (CCAP) that offer high-density QAM capabilities and a clear upgrade path to future CMTS capabilities. By providing operators with an easy, flexible upgrade path toward full CCAP and an all-ip infrastructure, while simultaneously minimizing operational expenses, power requirements and rack space requirements, CCAP systems will be a key component in the transition to IPTV. 7

8 Business Considerations Technical strategy is not the only key decision for an operator transitioning to IPTV, several business issues must also be considered. Content Rights The future of media consumption lies in the promise of TV Everywhere (TVE), but the challenges of delivering on that promise are more than infrastructure-deep. Operators must ensure they have the rights to offer their customers subscription content on devices beyond the home TV. CPE Support An all-ip network allows operators to cost-effectively deliver content to consumer-purchased devices including gaming consoles, streaming media boxes, connected TVs and mobile devices. But as the variety of devices grows, it won t be feasible to support every device. Operators need to decide which devices to support and allocate resources accordingly. User Experience Design Consumers are used to the highly intuitive, personalized and engaging user experiences found on the Web. Accordingly, a TVE service is only as good as the user experience. Operators will require expert talent to design and manage an intuitive and engaging user experience. Additionally, customer support expertise must also address the range of new technologies and services. Data Collection IP infrastructure facilitates two-way data exchange, necessary in providing next-generation experiences including personalized search and recommendations and targeted advertising. Capturing user interactions yields a tremendous amount of data to power these systems, but a means to collect and analyze the data, and the technologies essential to delivering ultra-personalized discovery and monetization experiences are also necessary. Evaluation Metrics With the variety of experiences that IP delivery makes possible, new performance metrics are needed to track user engagement, including VOD usage, advertising effectiveness and second-screen usage. The flexibility of IP-delivered services allows operators to optimize their subscribers experience by evaluating metrics in realtime and making adjustments to advertising campaigns, personalized discovery, user interface design and more. Operators will want to define KPIs up front and prioritize performance metrics reviews and optimization to take advantage of the power and flexibility that IP delivery provides. 8

9 What s Your Next Step? While there are many reasons to migrate to IPTV, there are also many decisions that operators must make, including migration strategy, technical decisions and business strategy. It s essential to choose the right partner to help navigate the options and identify the strategies that are best for your business, in both the short and long term. Rovi is a trusted advisor to operators looking to make the transition to IPTV. Our experienced consultants can help you plan, design and implement the right IPTV migration solution for your business. We work with cable operators, large and small, to help them devise the best step-by-step migration, while supporting their existing investment in legacy STBs and infrastructure. We invite you to learn more. If you re in the process of migrating your operation to IPTV or starting to think about it, contact Rovi to learn how we can help. About Rovi Rovi is leading the way in the discovery and personalization of digital entertainment. We help power top brands around the world with market-leading guides, metadata, recommendations, audience analytics and advanced advertising solutions. With products deployed through an innovative cloud-based platform, Rovi is enabling customers worldwide to increase their reach, drive consumer satisfaction and create a better entertainment experience. Rovi s pioneering technologies bridge the semantic gap in usability for connected devices and applications based on our proprietary Knowledge Graph semantic database. Built on the Knowledge Graph, Rovi Conversation Services is a platform used by Tier 1 service providers in North America and major smartphone manufacturers globally for intelligent search, personalization and recommendations solutions. For more information: rovicorp.com Contact us: 9

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