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August 1, 2019

The Evolving Face of Video Services

As the Independent Show wraps up this week, we at ETI want to take a look at the continuous changes that we are seeing in video technology. We recruited our own industry expert, Senior Director of Product Development, Greg Gross, to give insight into video delivery through the years as well as what to expect in the future. 

Pete Pizzutillo: Welcome to The Broadband Bunch, a podcast about broadband and how it impacts all of us. Join us to learn about the state of the industry and the latest innovations and trends. Connect with the thought leaders, pioneers, and policymakers helping to shape your future through broadband.

Pete Pizzutillo: The Broadband Bunch, as always, sponsored by ETI Software.

Craig Corbin: The Broadband Bunch is back, alongside Pete Pizzutillo, Craig Corbin, and our special guest today, the senior director of product development with ETI, Greg Gross.

Pete Pizzutillo: Welcome Greg.

Greg Gross: Thank you.

Craig Corbin: Thanks for joining us.

Greg Gross: Happy to be here.

Pete Pizzutillo: Now Greg has a very specific expertise in a lot of … in a few areas, but today we’re going to talk about video, right?

Greg Gross: Right.

Pete Pizzutillo: Specifically the evolving face of video technology. So you’ve been around in the market for how long have you been in this industry?

Greg Gross: 25 years.

Pete Pizzutillo: So you’ve seen some things change?

Greg Gross: Absolutely.

Pete Pizzutillo: So maybe for our listeners, you can kind of walk us back when we talk about video technology, what is it that we’re talking about in general?

Greg Gross: So in general we’re talking about delivery of video to the customer, to a home subscriber. How do you get your basic cable, your expanded basic, and so on.

Pete Pizzutillo: What was the earliest version of that?

Greg Gross: In the early days it was analog. There were a variety of technologies. You probably remember watching the TV when you tuned to HBO and you’d see the wavy lines, and it’s distorted and green and red. Those were the earliest days of video back in the analog days. It’s very expensive to grow it. It had some pretty hard limits as to how much you could push through it. So obviously naturally it started to evolve, to allow more content to be delivered to the end consumer. And that evolution continues today.

Craig Corbin: What’s amazing, I think to me is the speed with which that evolution continues. And we talk about how far we’ve gotten in the last century, but look at the last 10 years alone and how rapidly formats have changed. And I was amazed in looking at just a list of all the different formats, dozens upon dozens of different formats. It’s amazing.

Greg Gross: Yeah. Yeah. So what had happened initially was the initial distribution or disruption that generated the biggest change was high definition. As high definition came out channels, cable companies immediately discovered they did not have the bandwidth to start offering high definition channels in any significant capacity.

Greg Gross: One high def channel consumed, I want to say six of the regular analog channels. So you got a hundred channel capacity, you’re going to divide that by six, you’re going out of business. So they had to find a way to do something, short of replacing all the wires in the ground and on the poles. So they digitized it. And that brought it back to a one to one replacement.

Greg Gross: The next disruption event was probably cable modems. We’re talking about the same wire, and that’s not video specific, but suddenly I need bandwidth. So I got to steal from my video to get available bandwidth so that I can offer data to my subscribers, which was a requirement, right?

Pete Pizzutillo: Right.

Greg Gross: All of those things happened and generated significant change. Everyone’s buying new equipment, new technology, everything about it is different from end to end.

Pete Pizzutillo: So the evolution, I mean now you’re talking about 5G and all this stuff that’s coming down the pike, right?

Greg Gross: Yep.

Pete Pizzutillo: People consuming video on their phones or on your laptops. I mean, so instead of just pure video coming to a home and balancing the data to video feed, I mean, so people are getting video through data, right? I mean, isn’t that … Is that how …

Greg Gross: That was the next big evolution.

Greg Gross: One of the things that came out, and all of this is predicated on legally being allowed to offer video services. Initially it was cable companies alone that were allowed to offer it, certain … Telecommunications Act in ’96 kind of opened that up. So telephone companies could start becoming service providers as well as municipalities who currently do garbage, water, utility services, power.

Greg Gross: So what you immediately find is you’ve got this telephone company and they have copper wire in the ground, which doesn’t nearly have the capacity to transmit a hundred cable TV channels. Again, it’s a bandwidth limitation, but they want to get into the cable business. So they can either build a new plant or look for a way to preserve that existing copper wire and get it to start doing video. And that’s when IPTV and DSL technologies like VDSL started becoming common.

Pete Pizzutillo: What’s VDSL? What does that stand for?

Greg Gross: Video DSL? I don’t know.

Pete Pizzutillo: Okay. Sorry. Trying to keep up.

Greg Gross: Very DSL. So no idea. And then VDSL2. There’s a hundred acronyms which we probably don’t want to bore everybody with, but in general that’s how the evolution occurred. We started with analog, high def forced us down to digital, and all along we’re trying to maximize the bandwidth on whatever wire’s running through the ground to everybody.

Craig Corbin: And once the transition to digital was made, that opened up Pandora’s box as to the methods of delivery that were available. And that’s where we sit today with a cornucopia of options for the end user, the consumer, to receive their video.

Greg Gross: Yes.

Craig Corbin: I think for many it’s a daunting decision. Do I become a cord cutter? And if so, then what options do I pursue?

Greg Gross: Yeah. The customer’s experience has changed as much as the technology has changed to get it there, which has been one of the limitations, training the customer, getting them to trust new service delivery methods. That’s always a challenge. We’ve come from old analog all the way up to IPTV delivery over data. Why would a customer who started off analog have to continue to evolve?

Greg Gross: As we just discussed, this was a good segue. The customer experience started off with, I’m sitting in front of a TV with a box, I got an up down channel button, maybe a guide, right, to now I can-

Craig Corbin: Maybe.

Greg Gross: I can ask my phone to play season three of Friends, episode 17, right?

Craig Corbin: Right.

Greg Gross: And it’ll find it on one of the providers and start playing it. So that subscriber expectation is forcing existing customers that have a system in place that’s perfectly capable of continuing to deliver video that can’t get to that extra level of service that’s required that the customer’s insisting that they got now.

Pete Pizzutillo: I would also add that there’s consumer electronic companies that are come up with the latest. They got invent the next new gadget that seems to be driving, whatever, the next, I can’t even remember, 5K or whatever that kind of stuff’s coming out. Plus, there’s the internet companies. So Apple and Google, they’re pushing. It’s all about a race to content. There’s this kind of upward pressure from the consumer and downward pressure from these giant media companies and in between are these people that need to figure out how to get it to the consumer.

Greg Gross: Yes. Let’s be specific and take an example. As a subscriber of someone who has been with Comcast for example, you might’ve started off with the set-top box in the living room, basic remote, no guide, and then you get a guide, and then you get some better channels. As it moves forward, now you’re able to pause on your TV and then pick up where you left off and watch it on your phone.

Greg Gross: Other examples would be cable companies that are much smaller as we talked about the Communications Act that let municipalities, utilities, and those types be able to offer very advanced video technologies. They can’t get to that next step. So the technologies are limited because Comcast was able to just build their own technology to take care of this. Those guys don’t have the skill or the money to invest in building it and maintaining it.

Greg Gross: So as video has evolved, those features come with it. The newer video technologies and vendors that offer video equipment, that’s built into the solution. So while I have a plant that’s capable of running old RF video, I go with a new vendor like TiVo or somebody and I can continue to leverage my RF video. Plus, I get the ability to watch video on phones and external devices.

Craig Corbin: Would it be safe to say that those options now for the providers in the areas that you just talked about, gives them the ability to not worry about the onerous retransmission fees that are being cast on them now so that they have an option as far as providing a way to get content for their end users with the IP alternatives and the streaming opportunity?

Greg Gross: Maybe a little bit, to a degree. Really what is is so some of the most … Some of the next generation technologies that are just emerging will have the vendor actually not only deliver a functioning technology system that allows you to deliver video, but they’ll deliver the content too. Today’s cable company or any video service provider, they’ve got to build the satellite dishes. They got to have the towers. They’ve got to capture the signal themselves and code it, digitize it, all of that stuff, to put it on a wire and send it out to the customer. Well, now you’re able to actually have a third party do all of that for you, and then you subscribe to their service and you’re essentially reselling everything they have. But those cable companies and service providers still have to maintain a contract with all the different content providers, ESPN and Disney, et cetera.

Pete Pizzutillo: Before we jump to the next point, just about, there’s a lot of talk about 5G. I mean, so kind of looking ahead, what do you see are the biggest impacts? I know that 5G is kind of nebulous still, but what do you see is the biggest impact on video coming from 5G? Anything to …

Greg Gross: Just where can I get my video. That will continue to free us from the couch and the cord and let us watch video just about anywhere.

Pete Pizzutillo: So just pushing, redefining the consumption model?

Greg Gross: Mm-hmm (affirmative).

Pete Pizzutillo: So that how it means the content providers, the infrastructure, and the special video providers need to even be more, more flexible and creative on how they continuously feed people the content.

Greg Gross: Yeah. And it’s not just me getting up and driving around, and going to another location to watch video. Even within the house. Most of the companies that still offer video, you have to physically run a wire to every room and plug into the wall to do it. Even just within your current residents being able to get up and move around is a huge feature and a huge benefit.

Pete Pizzutillo: You’ve already started mentioning some of the challenges. I mean, is there anything else that we should be talking about?

Greg Gross: So, yeah, absolutely. As a service provider wants to expand their service, there are tons of vendors out there, and those obviously present challenges. Which one do I pick? How do I know I’m getting the right one? Who’s going to be around? Because they’re all new. It’s a good time. You’re seeing a lot of people get into it, but there’s not any one who’s kind of proven that they’re a vendor to take a bunch of customers to the next generation.

Greg Gross: But there are some good ones out there and they’ll definitely succeed. So that’s one of the challenges, is what’s the next generation of technology and how to … Am I picking the right pony?

Greg Gross: Another challenge is I’ve already got a bunch of customers up and running. The worst thing I can do is disrupt that service in any way that doesn’t make it better. So you’ve got to find a way, and a lot of the technology vendors make this possible, to easily transition from your current state to the next generation without really, I mean, even if you have to retrain a customer, hand them a new remote, you’d be surprised at how many truck rolls that generates and how many service calls for people stuck on something. And suddenly usage, VOD, and pay-per-view stops happening. You don’t want to give them an excuse to look for another solution.

Pete Pizzutillo: Right, go shop. Yeah.

Greg Gross: Just make it as smooth as possible. And the technology can help with that.

Craig Corbin: Right. We’re visiting with Greg Gross, the senior director of product development here at ETI Software Solutions. We’ve talked about how things have evolved so rapidly. I know it’s impossible to have that crystal ball, but best guess, where do you see the biggest changes coming in the next five years for both providers and what will happen on the end of the consumers?

Greg Gross: One of the drivers, which we barely touched on, is the service provider who’s offering video has a very valuable pipe that goes to the customer’s house to deliver that video. They’ll be able to use that for other revenue generating products and offerings, mostly data. If I can take the video and change it so that I’m using less of that bandwidth, then I can sell that extra bandwidth.

Greg Gross: At first, I’ve got to sell it to compete with the competitor who are now offering gig speeds routinely. So I either have to run another pipe or find a way to take what I’ve already got and expand it so that it can offer those services. So it’ll continue to change in that fashion. It’ll continue to enable me to keep the video and enhance the services, but also use that bandwidth for other functions.

Craig Corbin: The one thing that we know is that video will always be a basic part of everyone’s entertainment experience. You look at the numbers and it’s staggering. We really didn’t touch on the how YouTube Live TV is a part of that. Their numbers are dwarfing now, the traditional networks, when you look at the usage from users 18 to 49, what they view in a single day dwarfs what the traditional networks do in a week’s time.

Greg Gross: Yes. And that’s a good point. That would be the next step that we would talk about, is you’ve got YouTube Live, not just the YouTube content from other users. You’ve got your traditional streaming content of the networks, and again, ESPN, Discovery, whatever. I can subscribe to that online. I don’t even need a cable TV service provider. That’s what our service providers are competing with. It’s not just YouTube. You’ve got Sling, you’ve got DirectTV, Sony, I know I’m going to leave some out, but they’re all over the place.

Greg Gross: So what we’re seeing, and that’s the latest evolutionary step, is our service providers are actually subscribing to a service where they’re essentially reselling a product like that. They don’t have to mess with any of the content. They don’t have to digitize anything. As they find themselves needing to evolve, they’re looking at a huge expense, which this lets them just skip right past that expense, get the content from somewhere else, tear down their old plant, and just move forward without it.

Pete Pizzutillo: And I would add to that. I mean I don’t expect you to have an answer, but we’ve been talking a lot about telehealth, and now that’s coming in with 5G. If you’re talking about more and more points where people are having video conferences or direct chats or even just kind of video serving about wellness and that kind of stuff, I could see that proliferating to the consumer tremendously in the coming years. Hospitals and universities will have to become content providers and just, and figure out how to get that content to the consumers. Does that make sense?

Greg Gross: Yeah it does. It’s the same general technology. They’re definitely making it easier. For example, we have customers that are going with this model where they get their content from the cloud and they’re essentially reselling a service. Again, we don’t want to disrupt the customer. They’re taking a service that would run on like a Roku stick or a Fire TV stick and they’re faking it out so that it looks like a traditional set-top box. I mean they give you an old looking remote with the channel up down button, even though it’s just an app running on a device. You turn that device on and it comes right into the app. It loads, just like you’re turning on your TV today, and it has an old guide, right?

Pete Pizzutillo: Right.

Greg Gross: When it can actually have a search bar and all the cool stuff. So they’re kind of easing them into that transition. And all of that is making it easier for us to ship video out to the cloud and deliver it to multiple locations any time.

Pete Pizzutillo: It sounds like over your 25 years, you’ve seen a lot of changes, but there’s a heck of a lot more changes coming.

Greg Gross: Mm-hmm (affirmative).

Pete Pizzutillo: More rapidly.

Greg Gross: I hope so.

Pete Pizzutillo: More equipment, more distribution channels, distribution models, content models. I mean how do people … How are people going to manage that? I think, looking at what we’ve been able to do with some of our customers and help them navigate through that is a useful guideline. If somebody started today, is there any kind of resources that you know around video that people can go and kind of get their head into how people are starting solve this problem?

Greg Gross: Yeah, it’s … Well, no, I don’t know the specific resource. It’s not hard to find though. There’s plenty of areas to look this information up. They’re trying to sell you their technology so they want to make it easy to find. Obviously trade shows are a great place. Talk to your existing vendors, find out how they’re going to help you evolve, and again, find the new ones out there and ask them what they can do. And it’s going to vary depending on what you’re sitting on right now. Are you willing to run a new wire? Are you greenfield and building something from scratch? So all of those factors will play into which direction you go.

Craig Corbin: It’s been very interesting. The one nice thing about this topic is that we know that the next time that we visit, there will no doubt be a handful of different topics that haven’t even existed to this point that we’ll get to look at. But we greatly appreciate your vantage point, having been on the cutting edge of so many developments and advancements within the industry over the last quarter century, and it’s been very enlightening.

Pete Pizzutillo: Yeah. Looking forward to the video of future.

Craig Corbin: Big thanks to Greg Gross, the senior director of product development at ETI.

Greg Gross: Thank you.