Is ‘upcycling’ the key to navigating a path to an all IP/Cloud future?

In the second in our series on ‘Operation Upcycle’, Amino CEO Donald McGarva looks at how it works and what the benefits are ahead of this year’s IBC

Since we launched ‘Operation Upcycle’ at the beginning of the summer, our clients and potential partners in the industry are keen to hear more about what this means for their business model. In my first blog, I set out how pay-TV service operators could make upcycling a reality. Now, as we now prepare to showcase these capabilities at IBC 2018 in September, I want to take a deeper look behind our upcycling programme – what it’s all about, why it’s a viable option and how it helps operators to cost-effectively future-proof their business.

Operators around the globe find themselves at a crossroads as they see fundamental changes in the TV marketplace being driven by IP and Cloud technology. With consumers breaking free from restrictive pay-TV service contracts and more choice flooding into the market, pay-TV service providers need to find new ways to engage existing customers, while also winning new subscribers and growing average revenue per user.

Many are looking to seize opportunities to offer leading-edge features and services such as federated search, multiscreen UX and integration with the latest apps. Yet operators are still confronted with considerable challenges when it comes to customer premise equipment (CPE), including the set-top box (STB), needed to cater to these new demands.

Facing tough choices

Until very recently, pay-TV service providers wanting to unify their service delivery platforms to both take advantage of IP/Cloud benefits and offer next generation services were faced with limited choices:

  • ‘Do nothing’ and run the risk of continually losing customers to competitors with more advanced offerings
  • ‘Lift and replace’, taking the potentially expensive option of completely replacing all their legacy CPE and STB hardware with a current generation equivalent
  • ‘Cap and grow’, maintaining existing customers on the current service, while then building a second strand of subscribers with a new more advanced offering that employs the latest hardware and offers more advanced functions and services

The choice of simply sitting still and succumbing to subscriber erosion is a recipe for disaster. However, upgrading an entire set-top-box (STB) estate is often an impractical solution from a cost point of view.

In many instances, an effective strategy could be to launch a premium offering alongside an existing service. This option enables an operator to provide advanced functionality with little service disruption and minimal upfront investment – and provides the opportunity to upsell existing customers. The downside of this solution is the increased operational complexity and the inability to unify services to benefit from an IP/Cloud workflow.

However, with advances in technology, inspired in part by the rise of virtualization within the enterprise space, a practical and cost-effective alternative has emerged.

‘Upcycling’ the STB through software and virtualization

The most efficient solution would be to remove the dependency on the device for service delivery and instead move many of the functions into the network cloud. The most critical features of the STB are its ability to decode a signal and display that signal on a connected TV. Elements such as DVR, catch-up, video on demand (VOD) and other software elements can be served from the operator core with the STB acting as a virtual display device.

This concept is at the heart of AminoOS, a software layer and cloud-enabled service that turns both legacy and current generation set-top-box hardware into a single unified infrastructure by employing virtualization along with existing hardware. AminoOS is deployed as an over the network software update that replaces the built-in firmware and software stack of the set-top box with its own Hardware Abstraction Layer.

AminoOS uses a modular code base to support different system on chip vendors and connectivity elements. In broad terms, AminoOS is compatible with chip sets able to support H.264 and HD video, with at least 128MB RAM and 128MB flash. In general, STBs with at least 1,000-plus DMIPS are broadly supported. The list of chipsets and vendors is growing each year.

The benefits of ‘upcycling’

The strategy of transforming legacy hardware using virtualization allows operators to upcycle existing STB hardware to reduce CAPEX and the timescales of rolling out an upgrade. Faster time to market is critical in the highly competitive market, while a reduced need for interaction with end-subscribers further reduces costs. We’ve already seen these results across a number of successful upcycling projects with clients such as GTD in Chile, PCCW in Hong Kong and Cincinnati Bell in the US.

This transformation approach enables operators like these to run the same service across STBs from multiple vendors for easier service rollout, reduced management complexity and unified user experience. This provides a single point of integration allowing the removal of multiple OSS/BSS systems that exist to support small subsets of STBs or unique processes – all leading to lower OPEX.

Moving to a single universal operating platform also leads to simplification of current and future upgrade plans, with the option to mix and match vendors. This removal of vendor/brand lock-in allows more flexibility to provide tiered offerings allowing STBs that cater for budget, mid-market and premium subscriber communities.

In addition to making it easier and more cost-effective for operators to deploy value added services such as catch-up TV, cloud DVR and unified search, this virtualization strategy can be extended to include analytics. By employing analysis in the rollout of next-generation functionality, operators are in a better position to monetize services, with data on subscriber activity informing marketing campaigns and the introduction of new features and offerings.

The all IP/Cloud future

For many operators in the pay-TV space, the road to an all IP/Cloud future opens opportunities to seize upon growing demand for more sophisticated features in a multi-device, multiscreen TV 2.0 world. AminoOS provides a path to a comprehensive pay-TV offering that allows operators to overcome financial hurdles and technical challenges continue to evolve their offering via IP and Cloud – leading to greater scalability, flexibility and speed to market, along with simpler service activation and reduced deployment costs.

Creating a path for that future, while making major cost savings and enabling quick time to market for these advanced TV services, is what ‘Operation Upcycle’ is all about. The programme is an approach we are firmly committed to at Amino and are happy to work with other suppliers to execute. It reflects what operators are telling us they need and the feedback I’ve received shows clearly that a lot of pay-TV operators see it as a great opportunity for them.

To learn more about how we help TV operators upcycle legacy devices, you can download our upcycling e-book at aminocom.com/upcycling. Or visit the Amino stand (#14.D26) at IBC 2018 (14-18 September at the RAI, Amsterdam) where we can talk you through how upcycling can help you offer your customers a modern TV experience. To book an appointment, email us at info@aminocom.com. I’ll look forward to seeing you there!