Gaining an Edge with Cloud DVR

Nov. 16, 2015
In 1999, TiVo (NASDAQ:TIVO) and ReplayTV brought the first digital video recorder (DVR) services to the Consumer Electronics Show in Las ...

In 1999, TiVo (NASDAQ:TIVO) and ReplayTV brought the first digital video recorder (DVR) services to the Consumer Electronics Show in Las Vegas, and very quickly DVR started to emerge as a powerful differentiator for pay TV [] service providers, allowing them to cater to consumer desires for time-shifted services. At the time, this was transformative technology; never again would people be faced with the unhappy prospect of missing their favorite shows.

Some 15 years later, however, TV any time and anywhere is no longer a value-add offering; consumers expect it to be part of their delivery service. They demand greater choice, multiscreen viewing and ultimate recording flexibility, and they're willing to move their viewing elsewhere when their desires aren't met. Pay TV operators are right to be watchful of the dramatic rise in market share for OTT services and to pay careful attention to how they can enhance their own business models to give consumers greater choice and control. For a number of pay TV providers, cloud DVR is providing the technology that they need to keep their edge.

Greater viewing options, storage capacity and enhanced recording capabilities are all part of the augmented package that cloud DVR can bring. Subscribers can also view recorded programs on a laptop, tablet, smartphone or TV connected to the Internet to take advantage of varied time-shifted services such as catch-up, never-delete, and look-back TV. Furthermore, by combining this technology with the quality of service (QoS) and the familiarity of the broadcast TV experience, service providers have a far greater shot at retaining the loyalty of current and future generations of TV viewers. Research from Parks Associates estimates that cloud DVR will have more than 4.6 million subscribers by 2015 and 24 million by 2018 in the United States alone.

Cloud DVR's ability to fulfil consumer demands is only half of the story. By moving the storage and recordings to the cloud, pay TV providers are able to reduce capex by eliminating expensive DVR-enabled set top boxes, as well as removing costs associated with upgrading hardware. One of the largest benefits is the ability to access the system without a truck roll, so that many of the costs associated with hardware upgrades and replacements are avoided.

The deployment of cloud-based DVR allows service providers to package and sell a high-end video service, while reducing costs and catering to the ever more demanding consumer. However, despite considerable advantages, we're seeing a disconnect between the numbers of pay TV providers who advocate cloud DVR and those who have actually deployed it. According to 2014 findings from Infonetics Research, even though 53% of pay TV providers view cloud DVR as a "must have," far fewer systems have been rolled out.

The technical hurdles to deployment, such as the costly and complex process of arranging expansive, petabyte level storage, are noteworthy; however, these can be overcome with the right platform and approach to storage and processing.

The regulatory environment instead is proving to be one of the toughest challenges keeping businesses from embracing cloud DVR with open arms. In the United States, this stems from a landmark court ruling (Cablevision), which dictates that a unique copy of each TV program must be saved per subscriber. This is known as private copy deployment and has left U.S. operators facing extremely tight and expensive restrictions.

By comparison, in parts of Europe the legal climate allows cloud DVR services to be delivered based on a shared copy model, where a single copy of each program is saved, stored and then shared among subscribers. While the shared copy model delivers technical advantages in terms of reduced storage requirements and greater cost-efficiencies, these operators face their own regulatory battles in the realm of content rights issues. Factors such as the geographic location of the hard drive, or whether the programs are multi-territory offerings, often impact what is allowed and what is not, making legal grey areas difficult to navigate. Innovative approaches to avoid content rights conflicts are moving ahead, though, as the cloud is increasingly perceived as an essential business investment. However, with expansive customer bases, reliability in cloud services has to be top of the priority list.

Even in the trickier North American landscape, innovation is rife as operators refuse to rule out cloud DVR, and instead find imaginative ways to make the Cablevision ruling work for them. For example, some operators are using the cloud in addition to in-home set top boxes to archive longer-term content and also reach more devices. Other approaches have involved de-duplication and re-duplication as necessary, so that single copies are still served to each user while reducing storage needs. While this may sound complex, investing in flexible infrastructures that integrate storage and processing and eliminate single purpose servers can alleviate many of the anticipated difficulties.

Ultimately, the structure of the underlying technology is key to any content provider's survival into the future. Pay TV providers must be perceived as providing equal or better content delivery when compared to OTT and online services if they are to expect consumers to stick with them, and this will inevitably require investment in infrastructures that bridge the gap between broadcast and digital delivery. These will need to be high performance in storage, processing and streaming in order to truly enable next generation TV experiences that will satisfy the global pay TV subscriber market, forecast to surpass 1.1 billion by 2020.

Sarah Paris-Mascicki is product marketing manager, cloud DVR, for Ericsson. Reach her at [email protected].

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