Last week it was announced that three U.S. operators, Atlantic Broadband, Grande Communications and RCN, will offer Netflix bundled with linear service. The offerings will be available to the MSOs’ subs with TiVo service, via a Netflix app on TiVo set-top boxes. TiVo also announced on Tuesday that it has a total of 4.5 million subs and will be revealing three additional MSO partners in the near future, bringing the total to 15 operator partnerships. Prior to the Cable Show, we caught up with TiVo’s Tom Elam, VP and GM of TiVo’s US Service Provider business, to chat about the Netflix agreement, what TiVo will be exhibiting and trends to watch during this year’s show in Los Angeles.
Regarding your partnership with Netflix: Are you trying to make this happen with other providers?
We have communicated with all of our partners—existing partners and obviously with prospects as well—that we have the ability to do this. A lot of the applications of our product, we can basically say, hey, we’ve already got an agreement, we can just pass that through. Netflix is an example where the operator needs to come to an agreement with Netflix. We facilitate that, but in the end we make the introductions between the operator and the Netflix business development team, but at the end of the day they need to come to terms for the ask between Netflix and the operator for Netflix to say yes, you can turn this on for your subscriber base.
It is easier or more difficult to come to an agreement with Comcast, given their current peer agreement?
The Comcast agreement doesn’t put Netflix onto Comcast set-top boxes. It only gets Netflix if you have a Roku box and you’re a Comcast subscriber. It’s simply means that you’ll probably get a better, higher-quality Netflix experience because of the peering relationship they’re putting in place. Our relationship is quite different. We’re actually saying no, the operators distributed set-top boxes will include the Netflix application. You don’t need a Roku box, you don’t need a SmartTV. It’s right there in the product that the operator provides for you.
What we have, is that when operators deploy TiVo, it’s an RCN product that’s powered by TiVo—that will now include Netflix. Whatever set-top you get from them, whether it’s our muli-room DVR, or standalone HD set-top box, it’s going to include Netflix. Specifically about Comcast: what’s been announced with Comcast is that your retail purchase product in Comcast should now get a better quality Netflix experience. If that was a retail TiVo, it would be a better quality experience, but Netflix on TiVo retail is already there. It’s been there for a long time. On a Comcast X1 box, you don’t get Netflix. It’s still not available on any products you get from Comcast.
Do you have specific goals this year as far as working with more distributors?
[The 3 MSOs] are our starting point. There are 2 different aspects of things. We have our existing set of operator customers, and I’m responsible for the North American set of customers. The international is separate. Our goal is to enable all of them to have Netflix. At the end of the day it’s their choice as to whether or not they want to include that offer to the subscribers. What we want to do is create the most powerful platform, the most flexible platform, the greatest content catalogue that’s out there. Our individual operators need to determine exactly which blend of over-the-top services they want to provide. As an example, we have Amazon integrated into our set-tops. Roughly half of our operators offer the Amazon catalogue to their end users. And the other half said no, we don’t think that adds additional value, so we’re not going to include Amazon. That’s their discretion. What we do is bring this really powerful set of integration… The commercial relationship is the operators’.
What TiVo will be exhibiting at Cable Show?
Our flagship product, which really has been driving a lot of our winds in the operator space is of course our multi-room solution, which is our gateway DVR combined with the IP set-top box clients, and we’re showing that both on TiVo hardware as well as on Pace hardware specifically, such that our partners can choose which hardware they want.
One that we’ve been showing for a while and is becoming increasingly important is the web and mobile solutions. This is a powered by TiVo mobile application. So as an example, Atlantic Broadband has already launched this. You go to the app store and search for Atlantic Broadband and buy that, and it’s a powered by TiVo experience but it’s completely under the operator’s brand and identity. And that’s becoming increasingly important as the market shifts from being television oriented to all screens oriented, yet being able to provide all of our partners with all-screen solutions—it’s just critical.
In terms of what’s new, we’ve got our new DTA solution. Our goal at TiVo is to be every screen, every solution that an operator may want to offer their consumers—that there’s a powered by TiVo component there. Even at the very entry-level set-top boxes, operators deploying HD DTAs can do that with a very powerful guide for a low-end, non-interactive box. We can put a powerful guide and recommendation experience even though it’s a DTA.
The other one that’s cool is a hybrid set-top box. It’s essentially combining broadband with DTA technology. By adding broadband you get all of the economic advantages of DTA and the simplicity… but then all the benefits of broadband. So we can bring Netflix down to a low-cost set-top box product. It’s a non-cable card product, so it avoids the cost and complexity of cable cards and yet you get the full power of the TiVo experience and the OTT experience combined with the operator’s linear experience. We’re not announcing customers for that yet—we’re really just starting to evangelize that product space.
What trends do you expect to see at the Cable Show?
We’re going to see a huge amount of discussion around 4K/Ultra HD and HEVC encoding in conjunction with that. At CES this year, everywhere you looked it was 4K, but there was very little discussion around content strategy for 4K. I’m confident that’s going to be one of the primary topics. As an MSO, how are we doing to go about bringing 4K. As a programmer, what’s our strategy? When will we be bringing this content out. As I’m sure you’re aware Netflix is already announced and is already providing 4K content, so the industry absolutely has to respond. We’re excited about that. Personally I’m a big fan of 4K. We’re not announcing any products there but… it’s in the labs at the moment.
The other one is the need to combine traditional video experiences and IP experiences. And doing that both to the traditional television screen as well to other screens. We expect that’s going to be an ongoing topic, and more and more discussions around TV Everywhere and bringing content to other screens. We’re obviously right in the middle of that one, but we expect that that’s going to be generating lots of discussion and some interesting announcements.
The third one is on the content discovery theme. You talk about more and more content, more and more programs, more and more options, but you get to this, ‘I’ve got 500 channels and nothing to watch.’ How do you go about helping the consumer find the content that they care about? How do go about making sure that when they’re paying for pretty expensive video and broadband subscription that they’re finding value out of that?