International Providers Blaze Path to Pay TV Disruption

DonohueIf you want to get a feel for the type of disruptive IP video services U.S. wireless carriers such as Verizon, T-Mobile and Sprint could soon launch, check out what their counterparts are doing in Australia, South Korea and other international markets.

Australian telco Telstra plans to use streaming video set-tops supplied by Roku to launch its TelstraTV product, which is scheduled to debut in October. TelstraTV will offer subscribers a combination of live TV, video-on-demand content and over-the-top video from Netflix, YouTube and other online video providers.

I started keeping tabs on Telstra last December after it led a $14.5 million round of funding in Portland, Ore.-based encoding vendor Elemental Technologies. Elemental, which announced this week that it would be acquired by Amazon Web Services, has pioneered the use of software defined networking to deliver high-definition and 4K content to devices ranging from smartphones to Ultra High Definition TVs.

Telstra’s decision to deploy Roku boxes left me thinking about a conversation I had in 2014 with Verizon Executive Director of Consumer Video Product Management Joe Ambeault at The Cable Show convention in Los Angeles. I pressed Ambeault for clues on the type of streaming video device that Verizon might use to launch the over-the-top subscription video service he has been developing with Verizon’s OnCue team. While Ambeault wouldn’t reveal names of the tech vendors and consumer electronics manufacturers Verizon is working with, I remember Ambeault praised the simplicity of Roku’s streaming video platform, noting that even his kids knew how to use it.

Roku is one device Verizon could use to sell pay TV programming over the top of broadband rivals. It may also use its 4G LTE network and devices like an LTE Multicast dongle from D-Link to deliver programming wirelessly to connected TVs.

In addition to deploying streaming video devices like Roku set-tops or HDMI sticks, we could see U.S. carriers market new high definition display devices that combine the functionaility of a PC, TV and set-top. That’s what South Korean mobile carrier KT and LG Electronics unveiled recently in Seoul. In early 2014, KT launched Olleh TV Play, the world’s first commercial LTE broadcast service.

Vodafone Spain is another international provider worth keeping an eye on. In March, Vodafone began marketing a quadruple play that is powered by TiVo’s user interface and DVRs. It also recently began marketing Netflix to its mobile phone and pay TV customers.

It won’t be long before Tier 1 service providers in the United States begin marketing Netflix to high-speed Internet customers. Cablevision and Charter Communications will likely be among the first major providers to sell Netflix.

— Steve