A new C Spire initiative features a pay-TV BYOD strategy that helps highlight a rapidly evolving video business marketplace. C Spire will deliver their IPTV service, including their linear channel line-up, to IP-enabled devices provided by end customers, removing the need for a traditional set-top-box (STB), the company announced at the NCTC/ACA Independent Show in Orlando.

C Spire, a Mississippi based regional IPTV, FTTP, and wireless provider, will be the launch customer for MobiTV’s platform, MobiTV Connect, which introduces the bring-your-own-device (BYOD) model to pay-TV. Customers will be able to access their C Spire IPTV subscription service through third-party devices, including widely available IP STBs like Roku and Apple TV, and through apps on tablets, smartphones, and other connected devices.

“It’s a full TV experience, but just on…what we call a customer owned set-top-box,” explained Jared Baumann, Manager of Market Development and Deployment at C Spire in a recent interview discussing their pay-TV BYOD strategy. “We’re now talking about just an app that runs on the hardware that you already have purchased…anywhere off the shelf, you can go to Walmart, Best Buy, we really don’t care.”

C Spire Pay-TV BYOD Strategy

The platform can deliver on-demand, live TV, catch-up TV, and network DVR, via IP distribution. Bauman says C Spire sees the pay-TV BYOD strategy as a natural evolution for any video operator, especially in a rapidly evolving marketplace.

“We’re ready to evolve and change and with this evolving and changing world, C Spire has realized very quickly that we cannot continue to just do things the way we’ve always done them and the way a traditional cable provider might provide a service,” said Bauman. “And so our goal at C Spire is to do away with the set-top-box…customers don’t like to have to deal with the fees and we don’t like to have to deal with the cost and we don’t like to have to deal with the upgrades.”

Larger pay-TV providers including Time Warner Cable (now Charter) have launched similar apps. Comcast also recently announced a Roku app strategy. C Spire hopes to have their version deployed by the end of 2016.

The MobiTV platform leverages whatever programming rights the operator has. Most operators have broad in-home rights to distribute content to devices within the home. Those rights vary significantly once out of the home on mobile devices though. MobiTV Connect can act as a middleware platform, although service providers will still need to operate their existing middleware to support legacy customers on traditional STBs.

Evolving to a Set-top-Boxless Future

While this C Spire example highlights an evolutionary step, it by no way means the imminent death of the STB. C Spire and other operators who go down this pay-TV BYOD path will still have an embedded base of STBs to support and innovate with. We’re definitely talking evolution here, not revolution.

“I don’t expect people are going to be ripping out set-top-boxes at a rapid pace, this is an evolution strategy,” said MobiTV CEO Charlie Nooney in an interview at the Independent Show. “But this could be a cap and grow strategy, where I keep my existing infrastructure and expand my footprint through this…we’re not saying in the next three months, set-top-boxes will be replaced.”

But according to Nooney, make no mistake, this is a paradigm shift and operators will need to evolve. Nooney likened it to the business impact of the shift from wireline phone service to wireless phone service, where wireless devices and apps have become the focus of consumer behavior and their wallet spend. This, despite a long deep history of the wireline business with phone companies, just as the STB business has been with cable operators.

“This to me seems remarkably similar to the wireline – wireless phone business history, because there was so much inertia built into the wireline phone business for so long and wireless was the business just kind of lingering out there,” said Nooney. “Now the wireless business is the cash cow, it’s cheaper, it’s more efficient, it’s where every company wants to be.”

This paradigm shift includes finding ways to embrace innovation. The pace at which new applications and features are introduced does create challenges for the traditional STB. The arrival of 4K UHD is one example, noted Kerry Travilla, vice president of technology for MobiTV during our Independent Show interview.

“Customers are buying 4K TVs now, because they’re down to $400,” said Travilla. “Now there’s all this tension, what do I do, do I go to my STB vendors and ask what a 4K box will cost and do a rip and replace with my existing customer base, when Apple TV and the latest Roku box already supports 4K?”

Of course this STB issue has been debated for many years. There are numerous variables to take into consideration. Loss of lease/rental revenue, loss of control of the UI and UX, and loss of diagnostic capabilities are not insignificant issues to cable/IPTV operators. No Apple TV or Roku box that I’m aware of offers TR-069 functionality for example. Not to mention, there is a subset of end customers who have no idea what a “Rawkhu” box is.

We can’t dismiss the recent FCC action on STBs either. There is clearly STB evolution afoot. How far it goes and how quickly are still subject to debate.

Image courtesy of flickr user D.Reichardt.