YouTube live at UPC Hungary today – Blueprint for online content to all set-tops

Murali Nemani

Now that YouTube is on set-top boxes all over Budapest, what does that mean for Brussels, Boston and beyond?

With Liberty Global’s UPC Hungary system bringing the full YouTube experience—including the rich YouTube Leanback user interface—to hundreds of thousands of existing STBs, our question is: What’s to stop Liberty Global or any other pay-TV provider from teaming with online video services to replicate this accomplishment elsewhere?

We’ll get to that in a bit, but let’s start by acknowledging that the integration of online video into pay-TV bundles has been hotter than Hungary’s spiciest paprika. The market’s been abuzz recently with reports of VirginCom Hem and a few Tier 2 U.S. operators bringing Netflix to TiVo boxes.

UPC Hungary’s bold approach is to stream the entire YouTube experience—as well as dozens of Metrological apps written for Liberty Global’s high-end Horizon boxes—from the cloud to existing D4A STBs. You can read here about how the CloudTV™ StreamCast platform they’re using virtualizes CPE functionality and solves the problems of Content Experience, Content Protection and Content Delivery. Results are still hush-hush, but what can be said is that within just a few weeks the service has already exceeded both usage and engagement targets for the first six months, as well as previous industry benchmarks for YouTube on pay-TV.

But what really sets UPC Hungary’s YouTube deployment apart is this: the truly global potential of making online video content available on pay-TV systems at scale—without the cost and time-to-market obstacles of rolling out expensive new, PC-like STBs. UPC Hungary’s success in bringing YouTube directly to D4A boxes has broader implications for Liberty Global and the pay-TV industry:

  • Liberty Global can quickly use the same virtualization of CPE functionality to bring YouTube to its entire footprint of millions of D4A boxes throughout Europe and Latin America;
  • Other pay-TV operators can break the logjam of device fragmentation to accelerate the availability of new sources of content that provides sustainable differentiation for pay-TV and materially impacts customers;
  • Pay-TV’s own “TV Everywhere” services—most notably HBO GO and Showtime Anytime—can unlock vast new opportunities by combining for the first time the flexibility of the Web with the power of the 10-foot living room experience; and
  • Marquee online video services such as Amazon, Hulu and—of course—Netflix can strike carriage agreements with operators that don’t limit access to a fraction of the pay-TV customer base, but rather open the gates to entire footprints of existing cable STBs.

Maybe all of this can be done using high-end STBs, but here’s my two cents: such an approach would take years to achieve critical mass, would cost orders of magnitude more than a cloud-based platform and never would be able to provide the win-win of access to millions of STBs for online video providers and a limitless supply of new video content for pay-TV.

With that in mind, let’s go back to our initial question: If Liberty Global can bring YouTube to existing STBs in Hungary, what’s to stop it—or any other provider—from teaming with online video services to replicate that accomplishment elsewhere?

Sounds to me like the answer is simple: Nothing at all.