Home Analysis Swisscom exemplifies the changing face of Pay TV distribution

Swisscom exemplifies the changing face of Pay TV distribution

Two innovations illustrate how Swisscom is pioneering new approaches to Pay TV distribution. The company makes its sports content available to rival operator set-top boxes but as a direct-to-consumer app rather than as linear channels. And now Apple TV devices are offered to Swisscom homes as a second set-top box choice, which means more customers are going to receive their blue TV via an app, as unicast ABR streams, instead of via classic multicast IPTV.

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Swisscom provides a neat example of how the TV distribution market is evolving, with Ingmar Schmidt, Senior Product Manager at Swisscom blue TV, recently outlining (at Connected TV World Summit) two notable innovations that boost consumer choice, increase the potential addressable market for the company’s Pay TV content, and make Pay TV more app-centric and more unicast.

First, Swisscom provides its notable sports content, plus films and documentaries to its rival Pay TV provider, Sunrise (the Liberty Global subsidiary), but not as linear broadcast channels. The content is made available via the blue TV app that has been onboarded on Sunrise set-top boxes. The evolution of the user experience is most obvious for football fans (seeking Super League, UEFA Champions League, Serie A, LaLiga, Premier League, Ligue1, etc. via blue TV). Where once a typical European sports rights licensing deal would have involved linear channels being made available via another Pay TV provider, the sports package on blue TV is accessed only via the onboarded app – and that includes live matches.

blue TV means that, in effect, Swisscom has become a direct-to-consumer app on the Sunrise set-top boxes, since Swisscom creates a customer relationship with the viewers. It also means that more premium sports TV viewing will be via unicast streaming. Schmidt pointed to greater UX control as a key advantage of the new blue TV app approach to distribution partnerships, contrasting the lack of control over licensed linear channels to the way that blue TV transports the brand and the Swisscom-defined UX.

Swisscom has created a common HTML5 browser-based app that can be used across operator set-top boxes (i.e., Sunrise) and on Smart TVs. This app also means that blue TV is available on Samsung television models dating from 2018 and on LG televisions back to 2017. Single app development was a key goal for Swisscom. “Like every major operator, we have to watch where we invest our resource and creating individualised apps for each platform is a development effort we did not want to bear,” Schmidt noted.

The second notable device and distribution innovation at Swisscom is the recent introduction of Apple TV devices as a second set-top box option shipped by Swisscom for on-network Swisscom customers (in a Swisscom home). These now sit alongside the ‘original’ Swisscom-developed STB platform that harnesses Android Open Source Project. This also turns Swisscom Pay TV into an app experience and delivers content as unicast ABR, rather than the classic multicast IPTV delivery into the classic Swisscom-developed STBs.

“Swisscom is an Apple-fan country with a very high iPhone penetration,” Schmidt says, pointing to why Apple was chosen as a new device partner. “Most of the [user] experience is identical [on the Apple TV devices to what you get with the Swisscom-developed STB].”

Swisscom already made its television service available as an app on retail Apple TV devices. But Apple also runs the Apple TV Distribution Program that enables Pay TV operators to become a specially integrated app experience on the Apple TV set-top devices – a similar approach to Android TV Operator Tier.

The new Apple STB app was built for the tvOS environment (so is different to the HTML5 app above). Swisscom appears as a very prominent app on the home screen and if you press the EPG button, the grid that appears is served through the Swisscom app. “You are more deeply integrated in this partnership [than when providing an app on a retail connected TV device] and that is why we consider this an equal set-top box, alongside ours,” Schmidt told the Connected TV World Summit conference two weeks ago.

All content, including the approx. 15 UHD linear channels from Swisscom, are served as unicast ABR streams through the Apple TV set-tops – which becomes the first unicast STB deployed by Swisscom. Asked about the trajectory towards all-ABR television, Schmidt pointed out that everyone knows the world is moving to all ‘OTT’ whether in the near or far future.

“There is a lot of innovation in this direction, so we will be driven in this direction. Companies will need core networks that are ready for unicast [as the default TV delivery].”

Addressing the challenges associated with the expansion of the Swisscom addressable market via the blue TV retail apps (on Smart TVs and connected devices owned by the consumer, and not supplied by Swisscom, including in non-Swisscom homes), Schmidt pointed to the need to support legacy devices with weak CPUs and ensure strong new partnerships so changes on the CTV device (like a browser update) do not kill your app. “You must also work on the operations advice for customers that call you, if anything needs to be fixed.”

He also highlighted a UX challenge thrown up by the often-streamlined remote controls on retail CTV devices (and indeed, on the Apple TV set-top boxes). “You are no longer in charge of the remote control and how many buttons you have, so a lot of attention has been paid to how we maintain a superior user experience with less navigation commands.”

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