In-Depth

Cloud TV: applications and limitations

Clouds-stripThe use of cloud technology to deliver TV services as a technology choice is gaining currency. But which applications is the cloud best suited to, and what are the limitations? Stuart Thomson reports. 

Cloud TV has been the video distribution industry’s buzzword du jour for some time now, but pinning down what exactly the cloud has to offer to network providers, pay TV broadcasters and OTT companies and how quickly they can or should migrate their services has proved elusive.

In essence, cloud TV can have many meanings, but a common one is the migration of services away from a managed network, with headend and consumer premises equipment owned and operated by a service provider, towards an architecture where services are delivered via data centres that can be operated by third parties, leaving the ‘operator’ to focus entirely on branding and packaging.

Despite claims from some that operators could feasibly migrate their broadcast services to cloud-delivered OTT in a relatively short time frame as bandwidth capabilities increase and the cost of CDNs falls, only a few niche video service providers are currently looking to deliver their entire service from the cloud.

For the majority, there are numerous steps to the cloud, and operators are, at least for now, more focused on delivering particular applications – notably multiscreen delivery and advanced interactive services – from the cloud than on getting rid of their entire infrastructure and becoming virtual service providers.

Applications that can be delivered from the cloud include the streaming of live and on-demand content to multiple devices and cloud-based DVRs. Operators can also look to the cloud to deliver video processing functions.

Multiscreen delivery

For Braxton Jarrett, CEO of cloud technology provider Clearleap, streaming is the key application for cloud TV. Multiscreen delivery to iOS and Android devices is rising, while the popularity of devices such as Roku and the growth in demand for delivery to Chromecast devices, is also fuelling demand.

Operators may implement cloud-based delivery because they want to target markets or devices outside the geographic limits of their network or because they may not have the content or channels they want to deliver to their own subscribers sitting on their own servers.

Typically therefore, he says, operators are taking a hybrid approach, using the cloud to complement their established infrastructure.

“Operators will always have infrastructure and some pipe to the home and there will be optimisation of on-net and cloud streaming. What is off-net and on- will evolve based on usage and economics, but there will always be a hybrid element,” he says.

Regardng the line between what makes sense to deliver from the cloud and what makes sense for traditional broadcast infrastructure, Jarrett says the economics are “pretty straightforward”.

“If you have QAM set-top boxes you are not going to the cloud,” he says, taking the example of an established cable operator. “If you have an IP system for VoD and IP streaming to existing boxes then leave those alone.”

Whatever the migration path for operators, however, it is certainly true that traditionally set-top focused technology providers are now looking to the cloud at least for part of the functionality they know they must deliver.

Ben Huang, head of global marketing, Mediaroom at Ericsson (which acquired the Mediaroom platform from Microsoft last year), says that his unit is “looking at how to bring in different aspects of the cloud”. For Huang, there is a clear trend towards the migration of on-demand service delivery to the cloud. More profoundly, he sees the importance of cloud technologies for the management of data being about usage and multiscreen delivery.

For Huang, one of the key issues is the fragmentary and disconnected nature of current cloud-based services. “A lot of times we see that major operators have a multiscreen offering based in the cloud, but the challenge they have with those offerings is that they are disconnected, silo experiences. The experience on each is totally different. There are multiple platforms in the back-end,” says Huang.  He says he sees value in being able to integrate different cloud-based services for a consistent offering.

For now, the integration of cloud and broadcast offerings is some way off. “At this stage many are keeping broadcast services separate but some of the tier one players are looking or have a vision of deeper convergence to improve the scalability of the overall platform,” says Simon Trudelle, senior product marketing manager at interactive TV technology provider Nagra/Kudelski. “They want to bring an integrated experience to end users. Over time there will be a stronger push to optimise video delivery across different networks.”

TV technology provider SeaChange is in the process of building up to a commercial launch of its own cloud TV offering. According to Sud Kaushik, director of product management, the company is targeting tier two operators, holding out the prospect of making an advanced TV service more affordable to smaller players without a massive upfront investment.

Key to a platform’s appeal, he says, is the ability to scale according to demand, to offer multiscreen video – including synchronisation of the experience and bookmark-sharing as well as search and recommendation. Offering personalised rather than device-based profiles is an important differentiator for cloud-based systems. Other applications include local content ingestion and support for multiple language variations. For Kaushik, cloud systems are becoming compelling as operators reach out to more and more devices that are subject to rapid technological evolution. With cloud, he says, “you don’t need an army of IT guys working for if Samsung changes its SDK”.

Kaushik describes SeaChange’s implementation of cloud TV as a “buffer” between the service provider and the customer, enabling the former to focus on marketing and branding a service rather than worrying about the delivery infrastructure.

Live TV

While multiscreen – the delivery of video to tablets smartphones and other IP devices – remains the key target for those seeking to deliver services from the cloud, how cloud TV is consumed is also important in determining the types of services operators wish to prioritise. While attention thus far has largely focused on VoD services, there is a question mark over how practical – or important – it is to deliver linear TV services from the cloud.

While there is an obvious point in delivering live coverage of  major sporting events from the cloud – for tablets and to provide additional feeds to enhance coverage of particular big ticket events – the case for delivering a linear channel package  from the cloud is dubious.

“People are still not looking at 100% implementation of a broadcast line up as OTT – just perhaps a few channels,” says Simone Sassoli, vice-president, marketing and business development, RGB Networks.

Nevertheless, Nagra’s Trudelle says that a number of  OTT operators  are seeking to deliver live TV from the cloud. Nagra customer Prisa recently started delivering a package of its premium live channels for multiple devices.

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“Prisa have told us that it’s something people get used to doing. We’ve also seen Prisa put packages to target new subscribers that are priced more aggressively with targeted premium content made available to multiple devices, including connected TV,” says Trudelle.

Live sports is an obvious starting point for cloud, but high demand can make live TV over the web a very expensive proposition. “Cloud TV today is not in a position to displace broadcast for large audiences, but the technology will evolve and we will see some multicast services over LTE networks coming up,” says Trudelle.

In addition to the cost of bandwidth, live services face the challenge of uneven broadband availability outside major cities, making it difficult for operators to rely on the cloud to deliver a consistent live experience to all their users. This means that even where services are deployed it may be necessary to maintain a parallel broadcast infrastructure to deliver them to outlying regions, with broadcast-to-IP conversion for playback on other screens taking place at the customer’s premises.

For Huang, it still makes sense to use tried and trusted broadcast – or managed IPTV – technology for events that are watched simultaneously by large numbers of people. “If an event is being watched by lots of people around the same time, then leveraging the broadcast platform and multicast infrastructure can handle that,” he says.

The exact tipping point when broadcast or multicast makes sense is shifting over time however, and clearly demand for live viewing on tablets and other devices is driving innovation. “There are a lot of patents being developed on how to scale linear viewing experiences. Even though the most economical way is to use multicast you can do things around adaptive bit-rate streaming and delivery to devices other than the set top box,” says Ericsson’s Huang.

There are factors other than the readiness of the technology that might prevent services moving over to the cloud – not least the challenge of clearing rights for cloud-based services, something that is recognised by Nagra’s Trudelle.

“I think one criterion for Prisa was to choose a vendor that would get studio approvals or rights and then bring that content to multiple devices and not get into issues of availability on some use cases or devices,” says Trudelle. As a security provider, Nagra was able to deliver a ‘hardening ‘ of DRM security on multiple devices, he says.

SeaChange’s Kaushik agrees that delivering linear TV from the cloud faces a significant challenge from restrictions on rights. He says that gathering sufficient data to prove to content providers that cloud-based multiscreen distribution is pulling in sufficient viewers will be key to winning them over.

“The biggest hurdle today is still rights. Until we get past that there is not enough of a business model that allows a service provider to make a case for it,” he says.

Long-tail

As far as established pay TV operators moving their existing channel line-ups to the cloud is concerned, Trudelle suggests that in the medium term, they may consider moving less popular, ‘long-tail’ channels to the cloud. He also sees an opportunity emerging for the delivery of premium content to smart TVs, enabled by the emergence of the new Common Interface standard, CI+ version 1.4, which makes removable and renewable security an option.

While this kind of cloud-based alternative to the switched digital-video architecture favoured by some US cable operators may make theoretical sense, given the scarcity and cost of broadcast spectrum, content providers and broadcasters continue to face choices about where to invest limited resources.

Kaushik believes that hybrid deployments are likely to remain in place, with improved analytic tools to assess the economics of delivery channels via the cloud rather than via broadcast required.

Given the problem of clearing rights and the technical costs involved, established broadcasters are not likely to migrate their line-ups to the cloud any time soon – but pure OTT players may make a different calculation.

“OTT players do most from the cloud – they are most suited to focusing purely on their branding. They have no legacy systems,” says Jarrett. “Even if they are ultimately owned by a broadcaster they want to compete with Netflix and other services, and they do it in a minimal way, [with] everything in the cloud.”

One technology provider catering to the OTT market is UUX, which emerged from the platform developed to support the direct-to-consumer Latin American OTT provider TotalMovie. While TotalMovie’s business model came unstuck over the challenge of billing for its service in Latin America, the company behind it merged with content management system provider OTT Networks to form UUX and offer its platform as a white label cloud-based VoD system, incorporating what is essentially a proprietary platform that taps into third-party providers for ingest and transcoding.

UUX’s key implementation to date in Europe has been for Telenor Hungary, a wireless operator that deployed an OTT TV service. The workflow and platform are delivered in the cloud using Amazon Web Services.

Live channels are delivered via the cloud to multiscreen devices. The service is not purely cloud-delivered however – Telenor deployed it over hybrid boxes to capture over-the-air DTT transmissions of leading linear channels.

“In the case of Telenor there is a hybrid aspect to the set-top box. This was done to eliminate network saturation. We have built an Android set-top for linear over the air feeds,” says UUX CEO Lou Schwartz.

Cloud DVR

If opinions are divided on how far it makes sense to deliver linear TV from the cloud, the same is true of an application that has been seen by many as offering a clear opportunity to save money by implementing it from the cloud – digital video recording.

For RGB Networks, cloud DVR is a key early-stage application, alongside cloud-based ad insertion. A key benefit, says RGB Networks’ Sassoli, is that delivering these types of applications from the cloud enables service providers to scale their investment to match growth in users rather than make a huge upfront investment.

“Both naturally require scalability in terms of the more users you have, the more you have to grow [your capability]. Consumption patterns change over time of day. You can allocate user resources at different times of day,” says Sassoli. “That is why we chose to implement NDVR – because recordings require storage. It is a natural application where you can scale up and down during the day depending on usage.”

According to Sassoli, service providers are themselves prioritising DVR as one of the early applications for cloud-based systems.

“Network DVR is in high demand. Every single service provider has a request, or is looking to implement or is looking to make selection as part of their service offering,” he says.

Ziggo Dashboard 01-14Huang is also quite positive on the prospects for network or cloud DVR, with a growing tendency to look to the public or private cloud rather than the operator’s own managed network to deliver the service. The advantage, he says, is that operators can serve DVR content to all devices rather than just the set-top box.

“You can package interestingly. If you have a DVR service with 50 hours of HD recording capacity you could, as an operator, ask users if they want to pay extra for more hours. You couldn’t do that in a set top model,” he points out.

Huang also believes the well-documented problem of clearing rights for network and cloud DVR services are beginning to become less of a challenge because the example of the success of OTT entrants has given content providers an incentive to grant more leeway to traditional operators.

Nagra’s Trudelle says that his company is adding cloud-based DVR functionality to its media live service platform. He sees the regulatory and commercial resistance shifting, as security concerns over shared copy systems – where operators store a single copy of a title that is shared between multiple DVR users – have eased.

Whether a shared copy as opposed to multiple copies held by service providers are permitted has been one of the major stumbling blocks of implementing DVR from the network and now from the public or private cloud. Shared copies make more sense for service providers because they require less storage, but a single copy per user is less legally contestable as it more closely mirrors the practice of users recording content on their own in-home set-top box.

However, rights issues aside, content providers may remain wary of cloud or network DVR generally on the grounds that it would further undermine their own advertising-based commercial model.

“The reality is that consumer behaviour has changed and demand for TV anytime is not going to go away,” says Nagra’s Trudelle. It may also be the case that cloud-based systems can give content providers more control either by blocking ad skipping or – more contentiously – by enabling them to charge a premium for targeting.

Not all technology providers are convinced that cloud DVR makes sense, however. For SeaChange’s Kaushik, it is not yet entirely clear how much of a business case can be made – particularly if cloud technology has already been put to good use to delivery entire channel line-ups as on-demand assets.

“It is about deciding whether cloud DVR makes sense,” he says. “If linear is not that big a deal and only a handful of live channels are delivered from the cloud, then NDVR can [more effectively] be based on recording from a set-top box. I don’t know if there is a business case for NDVR yet.”

Another sceptic is UUX’s Schwartz, who says that if all important content is available on-demand, there is little real need for any kind of DVR service. “We satisfied the requirement for DVR through catch-up TV with seven days replay,” he says.

Making money

This view is echoed by Jarrett. “Most people are thinking the best user experience involves making everything available on VoD rather than DVR. People are putting things out on tablets even before they go on air. DVR is not very programmer friendly. They lose control of ad playback and that kind of thing,” he says. “The win-win for the industry would be for programmers agreeing with operators or consumers to deliver content live and have an instant VoD asset available at the same time.”

Could the attraction of cloud DVR – and for that matter, delivering everything on-demand – for content providers be increased if there was more evidence that money could be made from it?

One of the other applications for cloud TV being pushed by some technology providers is dynamic ad insertion. According to RGB Networks’ Sassoli, advertising insertion benefits from a cloud implementation because the number of ads delivered via video-on-demand and linear channels varies according to the time of day. Given the challenges operators face in making money from multiscreen and OTT video in general and the adverse impact of DVR on ad viewing rates, this could have a strong appeal for content providers.

There are also many less obvious ways in which cloud technologies can save TV operators money. In addition to ‘customer-facing’ applications including DVR, the cloud can also support the virtualisation of video processing.

RGB Networks recently launched its cloud platform, CloudXtream, based on an open source platform called OpenStack. The technology provider can, using OpenStack, configure “whatever hardware is given to us”, according to Sassoli.

OpenStack is backed by IT hardware providers including IBM and HP and, according to Sassoli, has become “a de facto cloud OS” that is non-proprietary, enabling companies that do not specialise in storage servers, such as RGB, to compete in the space.

As part of its development of cloud, RGB Networks offers software-based transcoding for video-on-demand and linear channels from CloudXtream, which, for example, enables service providers and broadcasters to scale their capacity to meet the needs of broadcasting special events.

For Sassoli, cloud-based transcoding for VoD in particular “makes a lot of sense”.

“If you encode 1,000 hours you can distribute it over time depending on the resources available to you,” he says.

The sheer flexibility of cloud technology, and its potential to allow broadcasters to scale their resources according to demand, mean that it will gain adoption for a variety of applications over time. How quickly we see the day that all TV is delivered from the cloud is, however, open to debate. The death of broadcast could be a long time coming.

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