IP&TV News talks to Nick Ontiveros, Director of Marketing, Television, ONO, ahead of his appearance at this year’s TV in the Cloud Summit (collocated with the CDN World Summit, 1-2 October, 2014, London).
IP&TV News: What are the main things cloud TV can offer the consumer?
Nick Ontiveros: Flexibility without sacrificing quality on multiscreen. For ONO, the ideal Digital Entertainment cloud product is one where we can offer consumers a truly seamless experience on every device they use. While it’s obvious that the uniformity of content is important, a real benefit that customers respond to is the persistency of their “TV identity”: their favourites and preferences follow them, so the same product that makes for an engaging experience in the living room is now unlocked to offer these benefits on their other screens.
What about the main factors that should be motivating operators?
The potential to realise huge cost savings and reduce complexity in your product range. With a cloud based product, you have the opportunity to migrate many functions to the cloud and evaluate CPE-agnostic (or CPE-less) options with an experience that was impossible before. This type of solution can start to solve some of the MSO industry’s biggest problems, like how to migrate a backbook to the current generation of service, or how to simplify your supply chain while retaining service differentiation at a range of price points.
What are the main obstacles to the transition at present, and how do you see these being overcome?
For most MSOs, there’s the need to address and change a content paradigm that wasn’t created for this type of model, but I don’t necessarily think that this is the first obstacle. More immediate is a lack of urgency to take risks – consumer expectation in many markets hasn’t yet caught up to the cloud, and any cost cutting business case only pays back over a multiyear period. We also can’t forget that for our consumers, quality of video is a key differentiator, and it has to remain that way to move to the cloud. However, with the extreme focus from all adjacent industries sharpening on video, it’s a necessary move to remain flexible to respond to new entrants and changing consumer behaviour.
How do operators avoid the erosion of revenues in this area?
It depends if you plan to position a cloud service underneath a traditional premium product, or if the cloud service is going to replace your traditional product. For the former, it’s a question of price sensitivity and retaining enough exclusivity of features/content in your premium product. For the latter, you have to remember what differentiates you from cheaper internet video providers, and ensure that you retain those differences when you move into their space in the market. Crucially, don’t underestimate the importance of the set top box in the perception of value for consumers. Fortunately, a cloud system also gives you many more options to monetise your product in ways the traditional model cannot, which can help recover pressure on price.
How should operators go about ensuring consumers take full advantage of cloud TV?
Find ways to drive usage of your multiscreen products – it’s the value in the ecosystem of your service that really separates cloud TV from the traditional model or from what else is out there. Almost all viewing still occurs on the living room screen, and that won’t change on its own. Operators need to have a strong applications strategy with wide availability on many platforms, and they need to make sure that this strategy embellishes a consistently strong user experience that exploits the editorial power that cloud services can enable. You must invest in educating their customers on the benefits, and focus on how cloud TV solves the frustrations that the traditional model causes.