The State of OTT Content Delivery 2013
Some might argue that over-the-air (OTA) coverage was available -- which is true for those "cord cutters" or "cord nevers" that had OTA access to an NBC broadcast affiliate -- but for those rural viewers who did not have OTA access or pay TV subscriptions, the new TV Everywhere model was a show-stopper move that left them without the ability to legally view any Olympic coverage.
Trading Power for Freedom
Even when it comes to the living room, there's a compelling reason to think of this "big screen" locale as the domain of TV Everywhere, rather than the one place where content is segregated by delivery type.
Consider, for instance, the current state of standard cable television delivery into the living room. The primary set-top box (STB) in a subscriber's household has two distinctly segmented functional stovepipes: security and navigation.
This functional segmentation is not based on current technology requirements, but rather by government mandate. In a bid to expand the opportunity for retail sales of STBs some years ago, the Federal Communications Commission (FCC) required pay TV operators to provide a way for retail box manufacturers, such as TiVo, to connect these retail devices to the cable operator's network.
The result was the CableCARD, a removable security module that can be placed in either a purchased retail or cable-company-leased STB. The module does not do much, short of authenticating the leased or retail device on the cable television local or regional network, but the power consumed by a CableCARD itself -- not including any display or recording capabilities -- is more than twice that of a typical internet streamer such as an Apple TV or Roku box.
The concept of a plug-in security module consuming so much power might be understandable if the technology were a decade old -- it is -- but it's rather egregious given the fact that the cable industry's research and development arm, CableLabs, issues the version 2.0 specification of its CableCARD Copy Protection (CCCP 2.0) in 2011. The industry doesn't need to change, as the clunky, outdated security options fence off one of the largest walled gardens of content. Why would it? After all, the cable industry makes significant money on leasing these boxes.
Yet studies have shown that cable STBs, especially those that provide digital video recorder (DVR) functionality, consume almost $3 billion worth of energy annually. That's a rate almost 10 times that of an IP streamer, and the same studies also show that more than 80% of the power consumed occurs when the device is in "standby" mode -- a misnomer since most DVRs continue to record nonstop throughout the day to accommodate the possibility that a viewer might return to the device to catch up on a rolling 30- or 60-minute window of time ("live television pause" in STB speak).
Set-top box manufacturers such as TiVo can connect to cable operators’ networks with a CableCARD, but at a tremendous power consumption cost.
Might there be a better way? Yes, and OTT content delivery provides a possible answer. The ability to do catch-up viewing of network television programs, through the use of Hulu, continues to gain in popularity, as does the brilliant execution of HBO Go, which makes some HBO shows available for online viewing the moment that they begin to be broadcast on a subscriber's pay TV television set.
Take those two concepts, add in a pre- or post-STB network DVR (nDVR), throw in a dash of DASH, and mix it together with a unified digital rights management (DRM) and encryption scheme, and you just might have the makings of another way to deliver live television.
In other words, TV Everywhere could become truly an everywhere occurrence for a pay TV subscriber. The use of nDVR, in particular, holds promise for lowering the overall need for persistent storage on STBs -- a trend made popular by OTT set-top boxes that rely on streaming delivery of premium and user-generated content alike.
Certain technical challenges need to be overcome to reach the goal of a unified OTT/linear television device, but already we've seen the first forays into this world, in the likes of the disappointing-but-interesting Boxee TV and its post-device nDVR functionality.
The technical aspects of this unification are relatively easy to address, but they can only be undertaken once the outdated policies that hamper both network efficiencies and technological innovation are removed. The policy climate seems to be thawing, even after attempts to regulate another set of outdated technologies -- in the form of AllVid -- and it appears the FCC is open to the concept of using smartphones and tablets as a way to "force tune" digital terminal adapters (DTAs) for the viewing of linear and on-demand content on secondary STBs in cable subscribers' homes. This is a good first step, but it's not enough to get us to the point where we save significantly on power consumption as well as freeing up content to be viewed on any device -- including the television -- without the need for three to four separate set-top boxes.
What Will 2013 Bring?
2013 holds promise for an integrated approach to online video delivery, merging OTT content with traditional linear video content. In fact, the day this article was being written, in mid-December 2012, a major cable company announced it would start offering a hallmark of many online video platforms: robust search and recommendation for linear and on-demand content.
OTT is sometimes associated with IP television (IPTV), but it is much more than IPTV. Sometimes it runs counter to the walled-garden IPTV approach that most pay TV operators have taken. With the proper policy approach, and the understanding that ISPs should share in some of the benefits -- if asked to bear the responsibility for monitoring OTT viewing for copyright infringement -- we as an industry have an opportunity to radically change the face of both the pay TV industry and the ensuing OTT device and delivery landscape.
This article appears in the 2013 Streaming Media Industry Sourcebook.
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