Pay TV, Broadband access, Cable TV

  Viaccess-Orca, Telecolumbus, Arris, Deutsche Telekom, Cisco, Liberty Global, Unity Media

ANGACOM 2016 reflects key cable challenges

The 16th ANGACOM cable show finished in Cologne yesterday and after three days of trade show and conference, a number of key themes impacting the cable industry emerged. Although heavily focused on the German industry--ANGA being the trade group for Germany's plethora of Level Four cable operators--many of themes are universal. Digital Single Market changes; the impact of Subscription Video on Demand (SVoD); Big data and targeting the gigabit society and cloud TV all had their focus, as did the distinctly German issue of analogue switch-off on cable. 

With German media regulators calling for analogue switch-off on cable by 2018, the topic was high on the agenda at ANGACOM. Germany is the only Western European market to maintain a significant analogue cable offer, which in part reflects the wider tensions in the industry between Level 3 and Level 4 (last mile) cable operators. Liberty's Unity Media claimed to be the country's leader in digital transition with 85% of its customers switched to digital and said it had already started replacing analogue channels with HD digital ones, Unity committed to analogue switch-off by June 2017, but said it would test switch-off in the city of Hanau from September 2016. The freed-up capacity would be used for HD channels and faster Internet as well as testing Ultra High Definition (UHD) distribution. Analogue switch-off was widely supported by channel groups, which want consistency in reach. By contrast, major Level 4 operator Telecolumbus noted the competitive advantage that analogue can bring and the on-going popularity of analogue cable with housing association clients. It suggested that an analogue cable offer should be maintained, citing its own research that shows that more than 30% of the Telecolumbus customer base still uses analogue for some of the in-home TVs. But Vodafone Deutschland, the other of the major Level 3 operators, pointed out that housing associations were acting as a kind of analogue cable Cartel, preventing a change which may actually be desired by their customers. Clearly the road to analogue switch-off on cable is not going to be as smooth as regulators would like.

While much of the discussion of proposed digital single market changes has been on content licensing and portability, the focus at ANGACOM was on infrastructure and the importance of spectrum management to create a seamless European network. Interestingly, EU Commissioner for Digital Economy and Society, G√ľnther Oetinger, said he felt the Russian Federation and Ukraine should be included in any plans as Europe was 'one continent'. He argued that, on the content side, 'one bureaucracy was enough', Europe does not need 28, he said. Oetinger also expressed some concerns around vectoring technology and the potential for it to re-monopolise the broadband access market, but said he still believed that vectoring was 'doable' as long as safeguards were in place.

Infrastructure also took centre stage in discussions aound the Gigabit society and the drive by the cable industry to push the speed barrier for broadband with DOCSIS 3.1. Unity Media said its Gigasphere DOCSIS 3.1 service would offer 'double-digit' Gigabit speeds over Hybrid-Fibre Coax allowing the cable industry to compete head-on with fibre-only operators. While some still dispute the need for Gigabit connections, opportunities around the Internet of Things (IoT) were seen as a key application for faster broadband to every home. But Swisscom noted that less than five per cent of customers had actually made use of its Gigabit broadband service in the two years it had been available and Canada's Rogers said it saw its service very much as a specialist premium product and had no intention of lowering the current $149 a month price point.

No TV business conference is complete without extensive discussion of SVoD and its impact on the industry. The oft-repeated adages that linear TV is still robust (particularly in Germany where Proseiben noted that the biggest hobby of Germans is classic (meaning linear) TV') and that content is king, were heard more than once. The beginnings of an acceptance that Netflix and other SVoD providers may be an asset to embrace rather than fear seems to be sinking in, however,a business case we have long been suggesting. SVoD providers are well known for their intelligent use of big data to personalise interfaces and target content, but broadcasters noted that data protection laws in much of the EU prevented them from targeting content production in the same way as Netflix.

ANGACOM 2016 wrapped with a technical panel on Cloud TV during which speakers from Arris, Cisco, Viaccess-Orca and Inca Networks discussed the business realities of a shift towards cloud distribution for video. While the general consensus supported the shift as almost inevitable, issues around CODEC choices, bandwidth for UHD, distribution of live premium content and image quality and scaling all came to the fore, demonstrating that a number of issues still need to be resolved before significant transition for mass viewing.