Liberty Global Set to Drive Cloud DVR Market

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4Q 2018 | IN-5283

Liberty Global’s Horizon 4 launch is set to accelerate cloud DVR adoption rate in the pay TV market, which is in high demand in regions like North America and Europe. Offering consumers the flexibility and cost-effectiveness of cloud DVR should help the pay TV market compete against video streaming services.

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Liberty Global Launches Horizon 4 Set-Top Box Supporting Cloud DVR 


European pay TV operator Liberty Global announced its next-generation set-top box, Horizon 4, at IBC 2018, which supports cloud Digital Video Recorder (DVR). The new set-top box supports multiscreen offerings and 4K video standard with integrated voice navigation. It also features access to live and Over-the-Top (OTT) apps, such as Netflix and YouTube, paired with an upgraded version of its GO mobile app, which enables users to watch linear and Video on Demand (VoD) content on smartphones, tablets, and web browsers. According to Liberty Global, Horizon 4 is developed in-house by the Liberty Global team in the Netherlands. Liberty Global has tested the new set-top box in more than 10,000 homes in different countries and plans to commercially launch in the Netherlands, Switzerland, and Belgium in late 2018. It plans to expand the rollout in other markets in its footprint in 2019.

Cloud DVR Deployments and Solution Vendors


Especially in Europe, there have been some pay TV operators, including Belgacom, Telefonica, Swisscom, and others, that are providing cloud DVR as an alternative to set-top box-based DVR. Lately, the emergence of Virtual Multichannel Video Programming Distributor (vMVPD) services drive wider cloud DVR deployments. For vMVPD services that are usually accessible without a dedicated set-top box, cloud DVR is essential to enabling consumers to record their favorite live content on the cloud and replay it at a later time. Liberty Global currently has nearly 9.5 million pay TV subscribers across Europe and its commercial launch of the Horizon 4 is likely to accelerate the cloud DVR adoption rate in the pay TV market.

A number of video solution providers are providing cloud DVR solutions to pay TV and OTT service providers. Cisco is providing cloud DVR solutions to more than 20 customers, including Sky New Zealand and Yes in Israel. Nokia and AWS Elemental have been providing cloud DVR solutions to operators in Europe. Other major companies providing cloud DVR solutions include ARRIS, Anevia, Edgeware, Huawei, and MediaKind (Ericsson). Cloud DVR deployment in North America is mainly focusing on OTT services, while in Europe, the deployments are found in both traditional pay TV and OTT services. There have been cloud DVR deployment announcements by operators in emerging markets recently as well; Cisco and Malaysian operator Astro have announced a partnership to deploy cloud DVR. Anevia, an OTT and Internet Protocol Television (IPTV) solution provider, has announced a partnership with Vietnam Television Corporation (VTC) to deploy Anevia’s cloud DVR solution for OTT video service VTC Now. Other operators, including Cablevision Argentina, Cable Bahamas, and Albanian operator ALBtelecom, have also partnered with Anevia to provide cloud DVR features for their OTT services.

Cloud DVR Market Set to Grow


DVR features have been generating additional revenue for pay TV service providers with varying DVR boxes priced as premium depending on the storage capacity. Especially in North America and Western Europe, DVR demand is higher than other regions, representing around 30% of set-top box shipments each year. Despite the benefits provided by DVR boxes, there are some tradeoffs with set-top-based DVRs. For consumers, upgrading the set-top box is required when they need more storage capacity. For service providers, there is a higher chance of hardware failure in DVR boxes, which usually requires technical assistance and device replacement, driving up operational cost. Cloud DVR provides flexibility and cost effectiveness to subscribers; subscribers can activate or deactivate the cloud DVR service, downgrading or upgrading the storage capacity without requiring any change of hardware. Cloud DVR also plays an important role in supporting recording features for vMVPD services.

As the pay TV market experiences increasing pressure from video streaming services, the ability to provide flexible and cost-effective services are vital to being competitive. With the advantages provided by cloud DVR, together with the growing adoption of vMVPD services, deployment rates are expected to grow in the years to come. Especially in markets like North America and Europe with high Average Revenue per User (ARPU) and DVR penetration, investment in cloud DVR is expected to be higher. In addition to providing flexibility to consumers, service providers will need to find optimal monetizing opportunity from cloud DVR investment.

The ability to offer cloud DVR service across a wide range of devices will be attractive for paying customers. The number of channels available for cloud recording needs to be improved by negotiation with content owners. The cost of cloud storage is one of the biggest challenges for service providers in cloud DVR deployment at present, which creates opportunity for video solution providers to provide highly optimized encoding and packaging systems to maximize storage. Solution providers should support highly personalized features and efficient analytical tools for cloud DVR users to provide best benefit to both service providers and consumers. A combination of efficient technical tools and a monetizing strategy is essential for successful cloud DVR deployments, and early activity in cloud DVR better positions those involved in the market as it matures.


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