Entone Broadband TV webinar - Calix

Broadband TV: Bridging the GapBetween OTT and IPTVpresented by

Broadband TV: Bridging the GapBetween OTT and IPTVAndrew Morton | VP of Broadband TV(May 2013)

Entone Company SnapshotConfidentialBackground:Formed by team that launched PCCW IPTV servicein Hong Kong in 1999 (presently 1M+ subscribers)Core Business:Consumer Premise Equipment and Software forIPTV, Hybrid Television and OTTCompany Locations:Headquarters in Cupertino, CAOffices in Hong Kong and EuropeRepresentativeCustomers:Fairpoint Communications, CenturyLink,Consolidated Communications, Volia, Telekom Srbija,Sunrise, Caiway, TSTT, C&W, 100+ others3

Complete Video SolutionsConfidentialAdvanced Set Top Box• Broadband TV• Hybrid IPTV• Hybrid CATVContent PartnersRemote Manage ToolsFlexible EcosystemIntegration4

World Class PartnersConfidential5

Representative DeploymentsConfidential130+ PayTV Operators Deploy Entone6

Pay TV Has Enjoyed 40+ Years of GrowthConfidentialSource: Entone Extrapolation of Nielsen Data7

But a Parallel Universe Has EvolvedConfidentialThe concept of “over the top” video threatens to marginalize the role ofmanaged network service providers8

Resulting in The Cord Cutting ThreatConfidential9

Beginning of the End for Operators?Confidential“One in eight consumers will eliminate or scale backtheir cable, satellite or other pay-TV service”Yankee Group“Netflix, the cable killer”Fast Company“The future of TV is not on Cable”NewTeeVee“Netflix, Cable’s biggest nightmare”BusinessWeek“Resistance is futile”Boxee10

Monthly Usage (hh:mm)Some PerspectiveMonthly Time (hh:mm) Spent on Various ActivitiesConfidential168:00154:05153:19156:24144:00120:0096:00201072:002011201248:0024:0012:3810:2711:4425:4928:5529:237:435:154:24 4:20 4:545:230:00Watching TVat HomeWatchingTimeshiftedTVUsing theInternet on aPCWatchingInternet VideoWatchingVideo onMobile PhoneSource: Nielsen, The Cross-Platform Report, March 201311

Advertising Revenue ShiftConfidential12

TV’s Middle ClassConfidentialCordlessDon’t watch TV,Watch Over theAir (OTA) orOTT only, orwatch a mix ofOTA and onlinevideoOpportunity in the Middle:80% of the MarketConcerned with growing costs ofpremium Pay TV services,intrigued by the concept of “cordcutting” but thus far unwilling togive up timeliness and quality ofPay TV. OTT pricing is appealingif they can still get some live TV.PremiumValue and willing topay for premiumPayTV services andconsider $1,500 /year a fair price forwhat they are getting13

Video Service Value GapConfidentialPremiumPayTVPremiumPay TVOTTBasic CATVValueGapOTTValueGapOTADBS ResaleCustomer Engagement14

The OpportunityConfidentialValueGapOpportunityValueGapCustomer Engagement15

The OpportunityConfidentialOpportunity16

Elements of a Winning TV OfferingConfidentialLive TelevisionAnytime, AnywhereAccess to Premium ContentFavorable Economics17

Operator Option 1: Linear TV ServiceConfidentialPros:• Strong top line revenue contribution• Strong branded “Input 1” consumer relationship• Most popular video service & content by far• Opportunity to increase loyalty through bundlingCons:• Expensive for both operator & consumers• Does not leverage OTT service innovations• 1:1 relationship between network & market size18

Operator Option 2: “Retail” OTT OfferingsConfidentialPros:• Low capex & opex compared to IPTV / PayTV• On-demand content & services• Addressable market not tethered to network reachCons:• High bandwidth consumption without corresponding revenue stream• Dilutes “Input 1” relationship with consumer• Limited control over software platform• Limited Content in regions outside continental US/Europe• Single TV solution in Multi-TV market• Enables Commoditization of Broadband Access19

Broadband TVConfidentialPros:• Lower capex & opex for operator• Low bandwidth requirements• Appeals to TV’s under-served “middle class”• Preserves “Input 1” relationship with consumer• Available to all broadband homes passed• Retains subscriber base for future servicesCons:• Less top line revenue opportunity• Less control over full content lineup20

Use OTT to Capture a Larger Subscriber BaseConfidentialIPTV Customer Base• Premium customers, highARPU and full linear channels• Shorter loops and fiberManaged OTT• Capture subscribers• Works in most parts of yourmarket ~1.5Mbps and up• Inexpensive to deploy• Profitable business• Can be upgraded to IPTVTelco21

Upgrade “Captured” Customers to IPTV In the FutureConfidentialIPTVService• Leverage your infrastructureinvestment• Keep a Hybrid of OTT contentand Connected Home serviceswith IPTV linear channels• Keep competition outCarrier Broadband NetworkFull Service IPTV or CATV23

Ensight Remote Diagnostic ToolConfidential• View On-screen Graphics over Any IP Network– Customer service agents can see what subscribers sees onscreen– CSA can send remote control events to STB via network– Save time and increase customer satisfaction• Works with All Entone Products and Middleware• Security Features Protect Privacy and Prevent Abuse24

ConfidentialCase Studies25

Case StudiesConfidential(Headquarters) Profile (Illinois, US) Top 15incumbent US telco 110years oldServices (Subscribers)TV Service SummaryFixed line voice (785K),fixed line broadand (340K),television (113K)IPTV with 300+ channels(65 in HD), optional DVR,Wi-Fi distribution up to 5TVs per home(Bridgetown, Barbados) PanCaribbean full-serviceincumbent telecom operatorMobile phone (1.2M), fixedline voice (603K), fixed linebroadband (207K)40+ channels of linear TVdelivered via ABR(Port of Spain) Trinidad andTabago full-serviceincumbent telecomoperatorMobile phone (860K), fixedline voice (290K), fixed linebroadband (145K)DVB-T hybrid service viavarious IP delivery typesEntone products in use Amulet, Kamai Kamai KamaiEcosystem PartnersMinerva (middleware),Verimatrix (DRM)Minerva (middleware)Minerva (middleware),Verimatrix (DRM)Pre-existing TVOperatorsServes 5 geographicalareas across US.Competes with Comcast,TimeWarner, DirecTV andEchostarFragmented and largelyfree-to-air DVB-T or DVB-SCompeting DVB-T network,DVB-S popular26

Consolidated TVConfidential27

Overview of Consolidated TVConfidential• Strategic Objectives for Video Offering– Intense competitive pressure from cable companies– Increase revenue per subscriber– Fund high-speed network upgrades to remain competitive with cable• Summary of Offers and Pricing– Two tiers of service: standard (80 channels) and enhanced (300+channels)– Fixed line phone, broadband and TV service ($70-$125 per month)– Monthly rental fees for DVR ($15) and extra STB ($7)– Whole-home DVR included with DVR offering• How Entone Supports Consolidated TV– Dedicated on-site field support engineer for system upgrades– Customized software builds to integrate with customer care systems– Reduce installation time and expense for multi-room deployments28

LIME TVConfidential29

Overview of LIME TVConfidential• Strategic Objectives for Video Offering– Increase broadband market share and reduce churn– Increase revenue per subscriber– Establish three screen video offering to thwart competition• Summary of Offers and Pricing– Three tiers of service: Starter, Premiere and Signature– Unbundled TV service at $13 (10 channels), $35 (60 channels) or $48(100 channels)– All programming delivered as Adaptive Bit Rate, no HD yet– Unified multi-screen offering in development• How Entone Supports LIME TV– Custom integration with selected middleware (Minerva), DRM(SecureMedia), TR-069 (ClearAccess) and QoE management (Mirifice)providers– Developed HLS client with trickplay and secure content support– First ever HLS deployment with Quality of Experience measurement30

TSTT’s Blink EntertainmentConfidential31

Overview of Blink EntertainmentConfidential• Strategic Objectives for Video Offering– Increase broadband market share– Increase revenue per subscriber– Supplement spotty xDSL coverage with DVB-T• Summary of Offers and Pricing– Three tiers of service: Lite, Basic and Advanced– Unbundled TV service at $15 (30 channels), $30 (80 channels) or $45(100 channels)– Variety of IP return paths including xDSL, WiMAX and GPRS• How Entone Supports Blink Entertainment– Developed support for delivery of linear programs over DVB−T and IP– Developed custom over-the-air firmware upgrade process– Wrote custom drivers for USB GPRS modems32

Why EntoneConfidential• Extensive global IPTV experience– 100+ Customers; more IPTV deployments than Cisco orMotorola• Ready-to-deploy solution– Fully integrated Middleware, DRM and Content– Complete range of platforms with flexible hardware options• Future-proof and low risk– IPTV, Hybrid and OTT options on common platforms– Robust solution for enabling new broadband-centric services– No need to replace equipment as services change– Fully managed solutions for IPTV and OTT33

For more information, contactandrew.morton@entone.com+1 778 279 0175www.entone.com