Meeting the Needs of the Next Generation with TV Anywhere, Anytime
The traditional pay TV industry is making a big mistake. We continue to assume we can tell consumers how they want to consume TV. The fact is customers have been demonstrating to us what they want since the dawn of streaming a decade ago. We must ensure we are open to listening to them.
It reminds me of the early days of the internet. I was new to the industry and excited about the growth of this new medium. But at the time, the Baby Boomers generation told me that the internet was just a game, a fad, and was reluctant to admit that the way people wanted content had changed. Now, the internet is a part of daily lives.
It is a good thing we did not listen to the naysayers. Today, as the Chief Technology Officer at Access Communications Co-operative, serving 235 communities across the province of Saskatchewan, Canada, one of our missions has been to grow the co-operative’s user base by embracing how younger generations already consume media. Doing that, however, required changing the way we delivered content and embracing the consumer-driven technology change.
Who Are We Building For?
I first came across IPTV, or streaming media, when working at a local crown corporation telecom in 1999; later I wanted to explore the transition while working with Westman Communications Group. Initially, the biggest appeal of IPTV was you could add as much content as you wanted without it impacting the bandwidth availability of the last mile network, since you were no longer broadcasting the TV services. As a cable operator, the cost of upgrading our plant was always one of our biggest challenges. Any time we wanted to make a change, it was like taking a trip to Costco: You go in with a budget of $100, and you come out $400 poorer with a half-full cart. We had the same experience, starting with a plan to spend ~$3 million on a plant upgrade, for example, only to spend twice as much but not get any further along in our march to progress. With IPTV, we believed we could avoid that.
In 2012 we invested in a hybrid solution, Moxi. Moxi was supposed to be a STB that would allow us to move from traditional cable broadcast to IP stream, but instead became the first in a series of false starts that subsequently expanded to include TiVo; both products that failed to deliver on their promise. When Rovi bought TiVo, I decided I was done with this approach. We scrapped our existing plans and started from scratch. What if, instead of starting from the standpoint of a particular product to develop an IPTV space, we started with the consumer in mind and built a platform around them?
At the time, we heard anecdotes of cord-cutters, cord-shavers, and cord-nevers. But who were they? We did some research and discovered they were the same people who had grown up and become our new purchasers: Gen X, Millennials, and now Gen Z. Our legacy business model was based on baby boomers and the world of channel-changers. Meanwhile, potential new customers had moved on with the technology.
Our frenemy Netflix demonstrated there was a better way. Back in 2012, Netflix had the same amount of content as CBS, NBC, or Fox. However, Netflix did deliver what we as the cable industry, had always promised to customers: Watch what you want when you want to watch it. Then they added more content. Our first step had to be eliminating the legacy pay TV way of thinking.
A Back-End Solution That Wouldn’t Back Us into a Corner
Once we determined that we needed to put our customers at the centre of our project and give them what they wanted, we went to work on the back end. We started with a set-top box and then had to figure out how to feed content into that box.
First, we listed all available content distribution networks (CDNs), along with all available content aggregators. Then, we set out to find a partner that worked with the various CDNs and aggregators. By doing this, we would not back ourselves into a corner working with someone who wanted to build a closed environment. We wanted the freedom of a platform-agnostic solution, meaning it was important that our solution was not tied to just one vendor, and we found a company that was willing and eager to build a solution and partnership with us, Enghouse.
I prefer not to work with a vendor who is focused on selling me something. It is extremely important to have a partner, someone working by my side toward a shared long-term vision. Enghouse has been an absolute partner for Access Communications Co-operative, creating the plan for turning our initial vision into reality. From the beginning, Enghouse was flexible and willing to think outside the box to build an agnostic solution that bends to the desires of our co-operative’s customers.
When you buy a phone, you do not have to understand how Android runs, but in our industry, vendors believe you must have an intimate knowledge of the technology. My team has had to learn a lot more about the underlying technology of IPTV than we ever thought we would. Enghouse has helped alleviate some of that burden for us, taking us step by step through various aspects of the technology.
When Enghouse sees a problem, they solve it, and the Enghouse team also listens to my needs, always asking, “What’s next?” Rather than buying a turnkey solution, I am glad we designed and built this together from the ground up. As a representative of a co-operative serving communities across Saskatchewan, I also think it is cool that this is a made-in-Canada solution, built by Canadians for Canadians.
Next Gen TV for All Generations
Our efforts have paid off; we collectively built an IPTV solution, Next Gen TV, that works the opposite way of traditional pay TV. Next Gen TV is built to have multiple apps, just like millennials and Gen Z are used to using on their devices. Instead of us unsuccessfully trying to bend them to the will of pay TV, our platform bends to their will and is aligned with what they are already doing.
We keep hearing that video is dead, but 90% of our last-mile network is being used for video in some form, whether it is delivery of traditional pay TV content and VOD or OTT options such as Netflix and YouTube. From what we have seen, video is not dead; our consumers just consume it differently than people did before. This new solution will also accommodate far more video.
Next Gen TV first rolled out in beta to staff and “friendlies.” Full rollout is expected for spring 2021, and in our next phase, we will target the early adopters. Once the early adopters have embraced it, we expect to incorporate some features from traditional linear pay TV—the same hardware, platform, remote—to accommodate Baby Boomers and Gen Xers. That will help with onboarding late adopters because it will have the same look and feel as traditional cable, even though it is built completely different from QAM TV.
A Cloud-Based Solution Protects Content and Recordings Alike
One of the greatest things about this solution is that it is based in the cloud. I know the cloud makes some people fearful, but it protects content better than previous technologies ever did. In the past, DVR boxes could be used to decrypt and steal data. Now, the customer does not hold the content. It is all in the cloud, and the moment somebody figures out how to decrypt it, we have the appropriate digital rights management tools in place to address the issue.
Using a cloud-based solution also means the customer will never lose a recording ever again. One of the problems with set-top boxes is that they all have moving parts, hard drives that could go out like a light bulb tomorrow. Every operator knows that they must change that light bulb before it dies, or the customer is going to lose all their recordings. The situation is even worse than that as there isn’t a way to replace a STB, even proactively, and allow the customer to keep their recordings. Why not transition those recordings to the cloud now, before the customer gets angry with me?
Once Next Gen TV has rolled out, I expect to see a significant reduction in operational costs for the backend system and hardware. The other potential for cost savings is that I am freeing up bandwidth that will be moved from broadcast video to broadband. Five years from now, this will be the only video product I have. I might have multiple portfolios based on different demographics, but it will all be sitting on the same platform.
Eventually, I think we could even sell our cloud service for archival purposes. You record a video of your little cousin in their school play and archive it with us. The day you want to go back and watch that video, you just unarchive it. In the future, we also want to aggregate metadata to deliver content based on user choices. This will eliminate users spending half an hour deciding what to watch.
Stay Relevant by Aligning with What Comes Next
Ultimately this solution is about guaranteeing the long-term viability of the business. Instead of chasing after revenue in the present quarter, we have identified users’ pain points and are filling those needs for the long term. We are making life better for our customers, thereby ensuring we stay relevant and engaged.
Access Communications Co-operative and Enghouse have collaboratively built a service for the next generation of purchasers. Next Gen TV will continue to evolve, and we will deliver on the promise that so many cable companies have been unable to fulfill: Giving customers the TV they want, anywhere, anytime, and in the cloud.