The growth and popularity of Video on Demand services are transforming the way consumers watch TV. According to a 2015 report from market research firm Nielsen, 41 percent of all U.S. households subscribed to at least one IP-VOD service such as Netflix or Hulu Plus. Moreover, these subscribers on average watched more TV – about 50 minutes more per day – than their cable-only counterparts. A reason for this trend is that the availability of VOD viewing options enables binge watching and catch-up TV viewing, as well as access to the latest movies.
The rise of VOD viewing is both a big challenge and a golden opportunity for cable operators. On the one hand, services like the aforementioned compete for attention with traditional video packages, plus they require a lot of bandwidth and network resources. On the other hand, with an integrated IP VOD system, cable operators are able to generate premium revenue, reduce churn, attract new subscribers and defend against cord-cutting and migration to over-the-top (OTT) services.
But the challenges for cable operators have always been the high cost and complexity of the VOD infrastructure required to deliver VOD services. Investing in and integrating video servers, content management systems, DRM services and billing solutions is a daunting technological and CAPEX challenge, especially for many smaller companies.
The move toward IP-VOD
Back as far as 2008, large U.S. cable providers were beginning to work on new infrastructures – such as massive content delivery networks, as well as the many traditionally expensive components listed above – needed for supporting IP-VOD offerings. For example, over the course of several years, Comcast shifted more than 100 of its locally distributed VOD servers to a “centralized, IP-based delivery system,” according to Gigaom.
“The move to IP is a way to more efficiently manage VOD offerings.”
For cable operators, this general move to IP is a way to add to and update their VOD services more efficiently than they ever could have with legacy transport. More specifically, modern IP hybrid set-top boxes connected to content platforms can effectively behave like Web browsers that pull in the latest information from the network, without the need for the protracted development cycles and clunky interfaces of legacy STBs, nor the high costs of many existing IP VOD solutions.
Having a streamlining user interface and experience for IP VOD is becoming increasingly important for cable operators, given changing viewer habits:
- The 2015 edition of the Cisco Visual Networking Index found that VOD and all other types of video combined accounted for 64 percent of global consumer Internet traffic in 2014 and was projected to climb to 80 percent by 2019.
- Moreover, the share of HD streams is also expected to rise across the rest of the decade, from 59 percent in 2014 to 70 percent in 2019.
- CDNs were also seen handling more traffic than ever before by 2019, at 72 percent compared with 57 percent in 2014.
Together, these numbers demonstrate the growing need for a viable IP VOD platform that can handle the ongoing shift to data-intensive video streams. Traditional cable packages are actually a good starting point for rolling out IP VOD, since so much content is still consumed through set-top boxes.
Set-top boxes and eVUE-TV working in tandem
Many steps have to be taken on the road to create an IP VOD service offering. In addition to implementing the complex mix of underlying infrastructures, there is also the matter of rolling out new STBs, as well as a building a cost-effective IP VOD platform that can offer new viewing options from within a small or midsize cable company’s consumer-facing package.
Fortunately, with the launch of IP hybrid set-top boxes and cloud-based IP video and VOD services such as eVUE-TV from Evolution Digital, cable operators everywhere now have ways to make a sustainable transition to IP and integrate a complete VOD service without the high cost of traditional VOD systems. This IP VOD option helps deliver the high-quality, intuitive experience that consumers have come to expect from Internet video, while still strengthening existing cable business models. Providing IP VOD to equipment via eVUE-TV gives cable operators everywhere a way to capitalize on the transition to IP.
A platform such as eVUE-TV can be easily paired with an IP hybrid STB and managed with an in-home device and a simple remote. This setup is beneficial to both cable operators and their customers as it provides a way to easily incorporate IP VOD services and a host of new video options for viewers. With the momentum behind IP VOD set to continue for a while yet, transitioning from legacy STBs to IP hybrid boxes and IP Video content powered by eVUE-TV is a move that will pay dividends for years to come.