SVG Europe Sit-Down: Nick Moreno from Arqiva provides insight into IP opportunities and looks at the future of OTT

The Master Control Room at Winchester is at the heart of the Arqiva technical operation

With around 8,000 active licensed sites (including 1150 TV towers), and the only national provider of terrestrial television and radio broadcasting, Arqiva is a leading UK communications infrastructure company.

Every day, Arqiva infrastructure and associated services enable millions of people and machines to connect wherever they are through TV, radio, mobile and the Internet of Things (IoT). Alongside its work in the UK, the company provides digital and satellite services and distribution for international clients in Europe, the U.S., the Far East and Australia, including Turner and Canal+ and the Al Jazeera Network. We started our Sit Down with Nick Moreno, Director of Strategy, Satellite & Media, with a look back.

Where have you seen your biggest growth over the past twelve months?

We have seen a lot of growth in two fundamental trends – the need for a single managed service provider, and the need for ‘broadcast-quality’ excellence when services are provided Over-The-Top (OTT).

Broadcasters and rightsholders are increasingly looking for a single partner that provides a holistic managed service wrap, rather than having to corral and manage a host of suppliers across the value chain. This is particularly important with regards to the proliferation of distribution paths and monetisation models we are now seeing. Complexity is increasing along the value chain, and a single service provider that can take away the pain of integration of multiple suppliers is a clear trend we are benefiting from.

This is linked to the second growth trend we are seeing – the rise of OTT monetisation and an

Nick Moreno, Director of Strategy, Satellite & Media, Arqiva

expectation of the same high quality of service that would be offered on traditional linear television services. To do that, of course, you need experience in delivering traditional television services, which only a handful of large suppliers can do. As the CTO of a global multichannel told me, ‘a 20-something software expert knows all about the ‘cloud’, but will he or she know where to intervene when a service goes down if they have little or no traditional broadcast heritage or experience?’.

What do you view as the biggest challenges of 2018?

For our customers, the biggest challenge is also the biggest opportunity – the need to make choices on which monetisation paths and models to exploit or prioritise. Arguably, the video value chain is going through its biggest ever set of fundamental changes, from rapidly changing customer demand to the spread of multiple distribution technologies and, in response, companies need to evolve their ways of ‘doing things’.

That means making decisions on how best to exploit rights. Do companies defend traditional monetisation models at all costs, or do they ‘bet the farm’ on monetising on new platforms OTT? Most companies are someway in-between these two extremes, but exactly where they need to be on the continuum between traditional and ‘new’ is the biggest challenge they face in 2018.

Has the take-up of IP technology been as you expected?

Indeed it has. We did some crucial strategy work three years ago that identified operational and commercial flexibility as the key growing customer need over the coming decade. After validating this with customer research, we decided to invest heavily in technologies that would enable that flexibility – virtualised capabilities and end-to-end IP workflows.

These major programmes are ongoing and are delivering great results, but our foresight in prioritising virtualised and IP technologies is confirmed regularly as clients increasingly ask for flexible solutions that only these technologies can provide. In a world where viewers have more content choice than ever before, and demand that events are viewable on second screens to the same standards they expect on TV, then broadcasters and rightsholders must be nimble enough to meet those demands.

Whether a long-planned sporting event or an unexpected opportunity to monetise rights in a new territory, our virtualised and IP capabilities enable us to offer customers the flexibility to start services with little notice and – crucially – to take down those services afterwards as needed.

For example, our ‘OTT Live’ service is a fully-managed end-to-end proposition that takes the pain out of setting up direct-to-consumer live event monetisation. We bring the appropriate technology together, set up a service or event, monitor and operate it to avoid service loss, and provide the tools to monetise it – all wrapped up in a single SLA (Service Level Agreement).

Where do you see HDR by the end of this year?

We are great fans of HDR and believe that HDR and Wide Colour Gamut (WCG) will have a positive and significant impact on the consumer viewing experience – subject, of course, to the user having a suitable TV display.

HDR and WCG both deliver an instant ‘wow’ factor. The benefit of the former is often described as delivering ‘blacker’ blacks and ‘whiter’ whites, but — more importantly – it delivers detail in dark shadow areas without white crushing, and vice versa in the whites.

Unlike the benefits of increased line and pixel resolution, HDR benefits are visible on suitably compliant TV displays of all sizes – including phones and tablets – and therefore have the potential to enhance the viewing experience for a greater number of viewers. HDR needs to evolve to realistically be interoperable and ‘reverse compatible’ with current TVs, thus enabling roll-out to consumers on existing platforms. Whether that truly happens by the end of this year remains to be seen.

How do you see the prospect of ‘traditional’ television being offered over the internet?

If by ‘traditional’ television we mean linear broadcasting, then of course it will be (and is already) offered over the internet – it is just called streaming. Similarly, video on demand can be offered OTT to second screens or on traditional distribution platforms to TV sets.

As a supplier, the role of Arqiva is to offer broadcasters and rightsholders the tools they need to distribute content either linearly or on-demand to all screens and via all distribution paths – and it’s then up to our customers to choose the mix of monetisation models they want to operate.

For live sports events, clearly the best way to maximise viewership (and therefore monetisation) is to distribute both to TV sets and OTT to second screens, and therefore make it as easy as possible for all viewers to watch those events. If millennials want to watch an event on their smartphones, or my friends and I want to watch the big match on a huge screen at my local pub, then that’s not a binary choice for broadcasters – they are now able to provide both.

How do you see OTT services developing – and what do you offer those looking for those services?

OTT services are an area of rapid growth for many rightsholders. We used to hear arguments that OTT monetisation offers digital pennies versus the traditional pounds of distribution to TV sets, but as per my previous answer this is not a zero-sum game.

Call it a ‘hybrid strategy’ or whatever you will, but companies can earn both revenue streams at the same time. In any case, I’d strongly argue that OTT monetisation is now not just digital pennies either, but digital 20 and 50 pences.

Arqiva is working with a variety of federations and rightsholders to explore the possibilities of OTT monetisation. We work as a traditional supplier that offers a managed service on normal commercial terms, but we can also work on a partnership basis in which we share the risk and limit the exposure of customers while their OTT platforms gain traction. It’s all part of our strategy to offer both operational and commercial flexibility to clients, which is core to the future of sport monetisation.