MISSISSAUGA – “Years ago we would have thought, as smaller operators, there's no way in hell we can keep up with them [Tier 1 carriers]. But times have changed. We can actually surpass them,” according to Stephen Sacks, president, MDL Communications.
“Delivering broadband is now the main killer app” and advances in streaming technologies has levelled the playing field so that even operators with no traditional video experience now sell video. Sacks presented his findings at Commtech East in Mississauga on how streaming is helping operators of all sizes compete.
Comcast now has 38 million Xfinity subscribers (broadband plus video and other services) Stateside while Shaw, Rogers, Videotron are deploying the same tech here, but by comparison Amazon has 300 million users, Android and Apple have 2 billon and 1.5 billion devices in consumers’ hands around the world, respectively, meaning “they are able to equal/surpass [Comcast’s] tech offerings,” he said.
“It's easy for Amazon to make a Fire Stick that blows everybody away. It's HDMI, add it to your TV, you've got 4K, voice search, you've got IMDB, you've got everything you want. And if I own an Amazon Fire Stick or a Roku box (the end-user device) is my problem. It's not your problem as an operator anymore.”
Sacks said the fastest way for ISPs to increase margins is to add a video service to their broadband offerings. His research shows ISPs who add video see their broadband take rate up rate shoot up by 35%.
“So here's something funny. Let's say you're selling broadband and you're selling 25 megabits, and you say, ‘for our 50 megabit package we will give you 15 free HD channels’ and you raise that price… you're still going up to 35%,” said Sacks.
If you’re a Tier 2/3 operator looking to launch an OTT service there are some common mistakes to avoid, explained Sacks who used Sudbury, Ont.’s Vianet, an independent ISP which now offers TV as an example. When you launch don’t start with too many channels because most Canadians watch less than a dozen regularly. Also steer clear of massive tech vendors, he added, because they will be slow to add new features, especially for small customers. “Ericsson, Arris, Cisco, they all need to sell set-tops and lots of gear to survive.”
Sacks also encouraged smaller operators to move away from sany legacy video system that uses set-top boxes as it’s “not worth the price.”
Finally Sacks urged Tier 2/3 operators not to stall any longer or take time to “analyze further.” If you’re in a team meeting fighting for OTT don’t say “we can do better, say we can do much better, or you won’t get it.”
