More network DVR, more cloud, and still more CPE?

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    Several major service providers have been outlining their belief that the ‘cloud’ is the long-term answer to content storage, while there is growing evidence that Pay TV operators are interested in whether the cloud can play an even bigger role in their future television delivery, including for the user interface. None of this means that customer premise devices are about to disappear anytime soon, as home gateways could become the home hub in a hybrid cloud/home world. But there is certainly some interest in whether standard set-top boxes can be replaced, and at the very least it might be possible to avoid shipping hard drives to the customer.

    It is becoming clear that network PVR, where personal recordings are stored in the cloud rather than on DVR hard drives, is considered the starting point for the cloud. This also highlights how relaxed the use of terminology is today, with ‘cloud’ being used as a substitute for ‘network’. In future, when at least some service provider functions are performed in the Amazon Web Services style ‘cloud’, the distinctions between the two will need to be clearer.

    Either way, more service providers are making strong public statements to the effect that network PVR, or cloud storage, are central to the future of their services. During TV Connect last month, Liberty Global confirmed its commitment to this approach while Magyar Telekom outlined the economics that compels the company to consider this direction.

    Matthias Linder, CTO at Magyar Telekom, noted: “Set-top boxes are a major part of CAPEX and anything that lowers cost is good. You have to prove that it is cheaper in the cloud but today 70% of all cost is STB related and getting that down is definitely a way forward.”

    Linder acknowledged that there is value in having a physical presence in the home environment but pointed to standards evolution and concerns that whatever you deploy in homes today will be out-of-date within two years. “That is the big challenge, having to deploy equipment and then replace it again and again.”

    He noted how there are different legal situations in each country when it comes to network PVR but added that it is becoming standard practice. “Hopefully we can go further into the cloud,” he said.

    As we reported previously, the Deutsche Telekom group is looking harder than most at how far the cloud can be used for the provision of TV services. Telekom Innovation Laboratories (T-Labs), the Research & Innovation arm of Deutsche Telekom, is testing a proof-of-concept for STB virtualization to see whether it will be possible to move more STB functions to the cloud.

    Deutsche Telekom has a high-level strategy that supports the ‘cloudification’ of key functions and services where it is practical. T-Labs wants to know whether networks can provide the ultra-fast response times needed if you perform User Interface (UI) and applications processing in the cloud, and whether networks can cope with the increased demand for unicast traffic if you replace hard disk PVR with network PVR.

    As Randolph Nikutta, Leader Interactive High End Media, T-Labs at Deutsche Telekom, told Videonet previously: “Our goal with this proof-of-concept is to shift all the functionality of the set-top box into the cloud. We think cloud technology has great potential to substitute, to a large extent, the hardware needed in the consumer home.” You can read more on that story here.

    At TV Connect, Mourad Veeneman, VP Technology at Liberty Global, the pan-European cable operator, declared: “The cloud will help us drive prices down considerably. Bringing storage into the cloud does not always sound logical when you think of the investment on the network side but there is a really good business case to bring the hard drive into the cloud.”

    Ibrahim Gedeon, CTO at TELUS, the Canadian IPTV provider, also expressed an interest in the cloud as a way to deploy services at lower cost during the London conference.

    Swisscom is among the cloud storage pioneers in Europe: the company added network PVR to its IPTV service last July and operates a hybrid model where recordings are stored in the customer STB and also in the cloud. One of the big advantages is that customers can then watch their recordings on any device.

    The Portuguese cable operator ZON has an 80 channel set-top box catch-up TV service and Nuno Sanches, Product Development Director at ZON, told us separately that, “We don’t think of it as a catch-up service but as a network PVR service.” Since ZON launched transactional VOD in 2008 the company has steadily expanded its on-demand offer, adding SVOD and then Restart and Sanches says the company is now pushing further ahead with what he describes as “a cloud-based approach for our delivery strategy.”

    In fact, his company is among the most bullish in Europe about the potential of ‘the cloud’, based on what people have said publicly. “We want to decrease the cost of setting up the user at their house and delivering a premium experience, including the UI. Does moving to the cloud answer that need? The economics seem to work for us even if it puts pressure on the access network but having spoken to other operators it is clear that it varies dramatically from operation to operation. For us it works.

    “Storage is less of a concern than in the past; the economics for storage are now very attractive for this kind of solution. But is the overall solution mature and ready to enable us to let go of hard drives? We think it will be within a couple of months. We are not going to replace an STB hard drive with cloud if that decreases the user experience but the steps we have taken, like TVOD (transactional) and SVOD (Subscription Video on Demand) are just steps to a place where all the recordings are cloud-based and hopefully we will get there towards the end of the year.” You can read more about ZON’s extensive Timewarp catch-up TV service here.

    Nick Thexton, CTO, Service Provider Video Group at Cisco, which is looking to provide a hybrid home/cloud roadmap through its Videoscape solution portfolio, views DVR as a likely function for the cloud. His company believes content ingest, the User Interface and content discovery are also early candidates for any platform provider wishing to migrate some video functionality into the cloud.

    Despite this, Thexton is confident there is a future for Customer Premise Equipment in the home but only if it performs more than commoditized functions [like video decoding] and is something consumers think is worth talking about to their friends over dinner. “There is still a powerful argument for a unified gateway and the relationship consumers can have with their products if they think it is the hub of their digital life,” he says.

    Thexton emphasizes that there is no such thing as ‘one size fits all’ when talking about migrating TV functions to the cloud. He points to how Apple has created a relationship between device and consumer but reiterated at TV Connect: “If it is a commodity device then we [as an industry] are on a path to remove it.”

    Pointing to examples of how service providers are embracing the complete digital/connected life concept with home security and automation services, etc., he argued that opportunities to innovate around Customer Premise Equipment will increase rather than diminish. But this will not be at the expense of the cloud, which requires a shift in mindset to be accepted but offers important benefits like improved service velocity that will lead us into a hybrid cloud/home environment.

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