Over-the-top video, once considered an enemy of cable operators and other traditional pay TV players as their subscriber bases slowly eroded, has quickly become a key component of video strategies among MSOs both big and small.
This new form of thinking is clearly apparent at WideOpenWest, which is making OTT video services and applications an important centerpiece of its flagship, full-freight video offering, Ultra TV, as well as a SW!VEL, a slimmed-down pay TV package in the works that’s tailored to fit the needs of cord-cutters, cord-nevers and, more generally, younger millennial audiences.
Instead of fighting the popularity of OTT options, WOW has opted to embrace these new services by integrating them into its pay TV platform. Consumers, after all, have shown a willingness to seek out those options with or without the help of the traditional pay TV provider.
“Overall, the strategy is to bring as much OTT content to the first-screen experience as we possibly can, because our customers, indirectly at least, are telling us that’s what they want,” Cash Hagen, WOW’s chief technology officer, told Multichannel News in an interview after Denver-based WOW was tapped as one of the magazine’s Independent Operators of the Year.
Hagen said that indirect desire is apparent in the way WOW customers use broadband — about 75% of all unicast Internet-protocol video streams delivered over the operator’s network originate from Netflix alone.
So instead of requiring customers to source that content from a smart TV, gaming console or Roku player, WOW is eager to keep those customers in its domain.
“We don’t want them to leave us,” Hagen said.
The initial phase of that strategy took form in WOW’s Ultra TV service, a whole-home DVR service based on Arris’s Moxi platform that delivers 200-plus channels, 15,000-plus hours of video-on-demand and a mix of OTT apps.
WOW is the first (and still only) Arris partner to integrate Netflix on the Moxi platform. WOW has deals in place to do the same with Hulu, YouTube and Pandora, the popular music-streaming service.
Meet MCN's Other 2016 Independent Operator of the Year:Buckeye: Building on Broadband
SW!VEL, Hagen said, is an extension of WOW’s overall strategy.
“We wanted to come up with a solution that would allow us to continue to hold the Internet customer … while, at the same time, bring something to our customers that is along the lines of what they cannot get in an over-the-top fashion — and that is primarily linear broadcast networks that are still, to date, not available in an OTT kind of way,” Hagen said, stressing that SW!VEL is not intended to compete with its flagship Ultra TV offering.
And SW!VEL will rely on a completely different platform, leaning on the “eBOX,” a new hybrid (QAM/IP) device from Evolution Digital that is powered by TiVo’s software platform and user interface. By extension, SW!VEL will support many of the OTT apps that TiVo already supports on its platform, a list that includes Netflix, Hulu and Vudu, among others.
That platform isn’t intended to supply all of the advanced services offered on Ultra TV.
SW!VEL, for example, will pair OTT with WOW’s limited basic lineup (about 30 channels, including the major local TV broadcasters) that is “as skinny as we could possibly skinny it,” Hagen said.
Also on the roadmap for SW!VEL is an IP-VOD offering (using Evolution’s new eVUETV platform) that will feature fare from ABC, Fox, CBS and NBC.
WOW also intends to add a cloud DVR to SW!VEL’s product mix in the first half of 2017.
WOW hopes to launch SW!VEL sometime starting this fall, starting in its northern and midwest markets — Chicago; Cleveland and Columbus, Ohio; and Detroit — which represent about 75% of the operator’s customer base. The remaining markets, including systems in Florida, Alabama, Georgia and South Carolina, acquired from Knology in 2012, are expected to come online by the early second quarter of 2017.
“Technically, the platform is ready,” Hagen said.
WOW has not announced pricing for SW!VEL (part of it will be based on the number of eBOX devices used in the subscriber’s home), but customers on that service must also take WOW’s Internet service. WOW won’t mix video options (a subscriber will either be on Ultra TV or SW!VEL), but it hopes to eventually unify its OTT offerings for both.
“Over time, there will be a continual roadmap of OTT content being added as we get deals done and the integration work gets done,” he said.
WOW’s new approach is a further indication that there’s a video renaissance of sorts underway among independent operators that previously were looking to de-emphasize pay TV as programming costs continued to skyrocket and, instead, apply more focus on higher-margin broadband service.
Hagen said he agrees with that to a point, noting that “we are de-emphasizing linear video” and that the trend has moved beyond a “numbers game” that was all about channel tonnage. Adding OTT as an option also opens the door to new opportunities and service models.
“It allows me to make different decisions for the linear content that I’m having to pay for,” he said. “The renaissance is accepting and embracing alternative means of content delivery. Whereas a couple of years ago, Netflix was a threat; it’s not a threat at all. Customers are going to get it anyway. Why not make it easier and more intuitive for them to get it?”
Brent Smith, president and chief technology officer of Evolution Digital, said WOW and other operators like it are gravitating to these new platforms because it allows them to start to migrate to lower-cost, and more flexible IP platforms.
In Evolution’s case, its hybrid eBOX works with the TiVo platform alongside a new flavor of it underway that will use “eGUIDE,” and interface that uses Rovi’s Fan TV offering. Rovi and TiVo are in the process of merging, which Smith believes will help to accelerate the introduction of new video products into the Tier-2 and 3 cable operator market.
“[WOW is] taking a very aggressive approach in embracing OTT and taking full advantage of the fact that the box has an IP connection in it,” Smith said. “It’s a much more dynamic platform. There is a groundswell of interest in IP that’s kind of unprecedented.”
And this new approach should also help independent operators expand their device options. Evolution’s eVUE-TV platform runs on the vendor’s eBOX, but is also agnostic in the sense that it can also run on third-party, retail devices such as Roku players and the Amazon Fire TV.
“If we can give them an affordable solution to go IP, it opens this Pandora’s box of devices,” Smith said. “I think that’s what’s really captured their attention.”
Though the introduction of new video products are core to WOW’s strategy, that’s not the only fresh item on its plate. It’s also looking to bulk up its broadband offerings and to stoke other business growth engines such as commercial services.
WOW’s current high-end residential broadband service offers 300 Megabits per second (in the downstream), but the operator expects to launch a 600 Mbps service in the next 30 to 45 days to about 85% of its footprint using DOCSIS 3.0 technology.
WOW, Hagen said, is also moving ahead with a DOCSIS 3.1 strategy that will pave the way for a new 1 Gbps residential service. He expects WOW, which uses Arris network gear and cable modems, to launch 1-Gig in four markets in its southeastern territory in late 2016.
The operator expects to launch its new 600-Mbps service for about $90 per month, and 1-Gig for “just north of $100.”
“The Internet strategy for us is speed, at a disruptive price point,” Hagen said.
Though 1-Gig is the new high-water mark for most ISPs, Hagen has a longer-term, crystal-ball view that he’ll be able to deliver up to 2.5 Gbps to the DOCSIS home. “It’s pretty realistic,” he said.
WOW also intends to pair that new speed option with an advanced wireless router that will employ a mesh architecture that aims to boost the home’s broadband coverage and provide subscribers with a user-friendly software platform that gives them (and the operator) visibility into home network performance.
“The consumer has gotten to the point where they don’t measure us as wired vs. wireless; we’re just the Internet provider,” he said, noting that in-home wireless coverage has become just as important as the speeds being delivered to the side of the home.
WOW is also exploring Internet-adjacent products. In addition to the enhanced whole-home WiFi platform, it’s also looking into home security and automation products.
While home security is the “lead horse” for entering the smart home arena, home automation — HVAC control, lighting, door lock control and home camera systems — are “more exciting to us,” Hagen said. “We want to be the enabler.”
WOW expects to conduct a market trial later this year and, if all goes well, follow with an initial launch in the first half of 2017.
Another key growth area for WOW is business services, a category that has been receiving the most attention in terms of capital investment.
WOW, like other cable operators, started off by supporting small- and midsized businesses with services delivered from its HFC network, but has also been bulking up on fiber-based solutions as it moves upmarket.
Also key is a growing cellular backhaul business. In Chicago, for example, WOW has a deal with Verizon Wireless for a build that includes macro tower sites as well as small cell deployments that concentrate capacity using smaller antennas at bus stops, light poles and other high-concentration areas.