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Cable Technology Feature Article

November 16, 2013

Cable Technology Week in Review

By Tara Seals, TMCnet Contributor

It’s been a busy week, especially when it comes to the quest of over-the-top (OTT) providers to make inroads to the living room TV.

Netflix for instance has made its first-ever debut as part of a pay-TV service, thanks to a deal with Virgin Media to be included as part of the cable MSO’s TiVo (News - Alert)-powered on-demand streaming service in the United Kingdom. The company just completed a service trial to 40,000 U.K. homes that began last August, and the Netflix app will roll out to all 1.7 million Virgin Media (News - Alert) subscribers with TiVo over the next few days. The Netflix app will be available alongside TiVo’s video on demand programming. Could it be a harbinger of things to come?

Maybe. Hulu is looking to do the same thing in the United States, as our story explains. The online TV darling is negotiating with cable and satellite companies to be offered via their set-top boxes as part of a pay-TV subscription. Hulu’s main value proposition is that it offers access to currently-running TV series just ahead of the release of new episodes, thanks to its parents (FOX, Disney and Comcast (News - Alert)/NBCUniversal). While pay-TV subscribers have access to linear broadcasts of these anyway, the on-demand angle is a differentiator, potentially. Currently, most cable providers—indeed, most networks as well—only offer a few episodes through on-demand services, and many of these episodes have expiration dates. Hulu is talking to the top operators, but a concrete deal could be elusive.

In the United States, Netflix is looking to tap the living room big screen in a different way. With members watching more than one billion hours each month via a TV equipped with a connected set-top or smart connection, the company has launched a user interface geared to boosting the experience for these viewers. An update is rolling out to devices including PlayStation 3, PlayStation 4, Xbox 360, Roku 3, and new and future smart TVs and Blu-ray players, which offers  context about a title, more descriptive synopses as well as personalized information can be based on social network, viewing history or taste preferences. Additional devices, including other Roku boxes, will be added at a later date, the company said. Users will be able to access their Netflix profiles across all platforms. The UI also incorporates some specific features for connected devices, li, like support for voice recognition via the Kinect on Xbox 360, and pointer-based navigation on smart TVs.

In Canada, Rogers Communications (News - Alert) is working on the user experience too. The carrier is rolling out a TV Recommendation App for all “NextBox” DVR customers, which offers access to personalized, live rental, on demand and previously recorded program recommendations, all displayed on the TV screen. The app has a recommendation engine that offers similar programs based on what customers are presently viewing or just finished watching, and comes with features like "Info" or "Guide" buttons on the remote, “More like This Show” and a "Most Watched" menu. It also adds a Kids Zone with TV shows and movies just for children.

Advertising was big in the news this week too, starting with some linear, traditional TV news. Holiday programming is raking in the media spends, and delivering ratings to match. As our story points out, the holidays are the one time when families still come together in front of the TV—a big opportunity for advertisers. The Hallmark Channel, whose 1,300 hours of “Countdown to Christmas” programming accounts for 30 percent of annual ad revenue, is seeing its seasonal original movies claim more viewers than any other cable net. Last weekend, “A Very Merry Mix Up” and “Snow Bride” came in as the No. 1 and No. 2 movies of the week respectively on all of cable, and added up to Hallmark Channel’s top-rated weekend in network history.

On the technology front, Clearleap, a multiscreen video technology provider, recently closed a $20 million new funding round, just as the company is expanding into the European market. Clearleap will use the money to speed up its domestic and international expansion, it said, on the back of existing success with companies including HBO, Verizon, Time Warner (News - Alert) Cable, The Food Network and the Travel Channel use Clearleap’s platform for multiscreen video. Clearleap predicts that it will be able to increase its headcount from about 100 today to 250 employees in the next 18 months.

4K UltraHD quadruples the number of pixels in a video compared to normal HD and is the next evolution of video technology, both for TV and for user-generated fare. But, supporting it is easier said than done. 4K typically requires eight times the amount of bandwidth necessary to carry it than HD 1080p and makes for files that are too big to be easily handled on consumer electronics video capture equipment.

The SD Association, creators of PC storage card standards, has announced a new high-performance option and symbol specifically designed to support a wide array of 4K television and video products. The Ultra High Speed (UHS) Speed Class 3 (U3) symbol will indicate products capable of recording 4K video. The move should encourage the mainstream adoption of the technology, as new research (cited in our article) indicates.

And finally, it’s well known that video traffic accounts for much of today’s mobile traffic — some estimates say it takes up as much as 50 percent of it. And customers increasingly demand better OTT video quality. For mobile operators, the goal is to better understand, plan and manage network resources while still facilitating subscriber video consumption. Into this breach comes Internet intelligence company Procera Networks, which is partnering with Avvasi, a quality of experience (QoE)-driven video management and monetization solutions vendor, on a joint solution capable of performing video QoE measurement in real time.

All of these trends are worth noting as traditional carriers wrestle with finding new revenue streams. In the third quarter of 2013, the traditional subscription TV industry lost a net 113,000 subscribers out of 100,400,000 or so total customers, compared with 101,000 in the third quarter of 2012, according to a MoffettNathanson report. But that’s nothing compared to what’s happening in legacy voice business, Gary Kim points out in an analysis. In Q3, cable operators lost 687,000 subscribers for the first three quarters of 2013, while competing satellite TV and telephone companies picked up about 574,000 subscribers. But a tenth of a percent quarterly decline is nothing like the rates at which telcos have become accustomed to losing voice customers, which is on the order of as much as one percent a month, or an order of magnitude higher than video customer losses.

Have a great weekend!

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