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Our story so far: After beginning an experiment in cord-cutting, David received a rude awakening from his pay TV provider.  This got us thinking about how to get around broadband data caps. Two approaches occurred to us right away.

Better use of bandwidth

The first is to make better use of available bandwidth by using improved codecs.  For a time, the spotlight had turned away from codec technology as the introduction of new OTT services and video centric CDNs gained the media attention.  Open source codecs such as FFmpeg were frequently used (and are still) as new services rushed to gain market share.  Network issues were normally blamed as the culprit when services were interrupted for buffering and the inefficiency of the codec was never questioned. FFmpeg has a release every 3 months and its efficiency has really gained ground over recent years, especially with the release of the HEVC / H.265 encoding capability.

4K or not 4K?

However, OTT services were also the first to promote the distribution of 4K content, which means that a lot more bits must be pushed through the pipe.  At the same time that 4K was gaining ground, so were the ideas of Wide Color Gamut (WCG, 10 bit instead of 8 bit color) and High Dynamic Range (HDR, a greater range of luminosity).

We predict that consumers will see HDR and WCG like night and day when compared with 4K. So much so that as consumers keep breaking through data caps and become weary of the high broadband bills, their taste for 4K will evaporate in favor of 1080p HDR services (yes, HD, not 4K) that consume a quarter of the bits. In later blogs this twist will get further detailed.

Implementing more efficient codecs can be relatively straightforward if the video encoders at the headend are recent, or recently upgraded: they may already be capable of producing DRM-protected 4K streams in DASH (we’ll leave headend upgrades and watermarking out of the discussion for now).  And operators have many video player software options to choose from.

The retail alternative

The second way to postpone data cap charges is through a hybrid broadcast solution. Having been involved in some recent software development projects, Steve has been experimenting with retail set-top boxes, to evaluate their user experiences.

The one on the bench this week is the AirTV hybrid set-top from AirTV LLC, a business unit of satellite TV provider DISH Network.  Since today’s lesson is about avoiding bandwidth caps, AirTV seemed particularly relevant.  Even though it was launched in early 2017, AirTV seems to have been lost in the noise; perhaps because it competes with two other offerings from its parent company: Sling TV virtual MVPD service, and DISH Network itself, which for AirTV is unfortunate.

Worth the effort?

There was no instant gratification.  First, he had to buy one of those long-forgotten devices called an over-the-air antenna.  Amazingly, the electronics section of a local department store had several to choose from.

After connecting the box from the antenna through to an available HDMI port on his TV, it went through a mostly automated 20-minute installation process that started by updating the firmware, the operating system and the middleware, connecting to his Google Play account, followed by user set-up. Steve then connected it to his online video accounts, including Netflix, Hulu, and Sling TV (which is optional, even though in a sense it’s Air TV’s native service). All set.

It’s a functional and workmanlike user experience and it’s straightforward to use.  Because Steve’s in a major metro area, there’s a good range of over-the-air programming. Metadata is well thought out.  Local over-the-air channels shows up in the EPG complete with their logos and the programs had poster-frames.

Is it perfect?

Is it worthy of HDMI1 on your TV?  Integrated with Sling TV and many other OTT services through Google Play, some might make AirTV their primary family room experience.  And it’s improving: AirTV recently added a second tuner and in-home redistribution over WiFi.

If better codecs represent a way that operators can improve the video sufficiently that people don’t hit data caps and decide to stay, retail solutions like AirTV might give some pay TV subscribers – yes, even DISH subscribers – enough reason to leave.

Then again, maybe not.  If you’re not in the best over the air reception area, you can still get this:

Pay TV providers see these looming threats and are trying to meet online TV head on in response.  Steve’s pay TV set-top box can unicast anything that goes through it over the Internet so he can watch baseball home games when he travels.  The EPG includes Netflix and YouTube, and if he were to pay for the apps of the premium programmers instead, the cost would begin to approach pay TV.

Meanwhile, David is still ecstatic about his internet TV, so long as he stays under his data cap: a combination of YouTube TV (70%), Netflix (20%) and Prime TV (10%) with Ring doing the security with 60-day video look back. All that for $40 (plus his $100 broadband and 2-line phone service). If only he had just one remote and an integrated EPG, he would probably never think about going back!

The ultimate challenge

The challenge for pay TV operators is to retain customers taking their video bundles. This is how they are valued on Wall St. Clearly, broadband is the ace in their hand but their other cards seem to be threes and fours. How can they prevent a future that paints them in as just a dumb pipe?   We’ll start down that road next.  Stay Tuned.

This is an ongoing series of articles that examines technologies and issues in the video industry, for which there is no lack of topics.

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David Price & Steve Hawley
Steve Hawley is Principal Analyst & Consultant for tvstrategies, helping service and technology providers understand and build the infrastructure to securely deliver advanced media services and user experiences to consumers, any time, to any device. ------------------------------------------------------------------------------------------ David Price is a seasoned executive in the TV & Media Industry and heads up Scala Advisors in a number of board and advisory positions with tech companies bringing transformational change to the way content is consumed, delivered and monetized