Charter Communications Inc., the nations fourth-largest cable company, has long seen video on demand as a key way to get close to its 8.6 million subscribers.
Surrounding customers with interactive advertising, letting them purchase video content whenever they want, nudging them to subscribe to premium channels—all are revenue streams made possible by VOD.
Charter wanted that revenue, and it fell to Pragash Pillai to find the technology that would help the company get it. As Charters vice president of advanced engineering for digital video, Pillai said he had struggled since 1999 to find the right IT infrastructure to manage Charters VOD, one that could cut costs and drive new revenue for the $5 billion company.
Charters first try at a solution involved proprietary VOD hardware and software from Diva Systems Corp. First, Pillai recalled, Diva tried to boss Charter around about pricing and feature upgrades. Then it went bankrupt. By the spring of 2002, Pillai had an end-to-end VOD system that regularly failed to execute subscribers transactions and had no vendor support.
Pillais vow: no more proprietary systems for Charter.
“After that, we knew that wasnt going to work for us,” Pillai said. “We needed to figure out how to compartmentalize the platform.” Thus began Charters exploration of open-source platforms.
Launched 12 years ago by Microsoft Corp. co-founder Paul Allen, St. Louis-based Charter mushroomed into an empire of more than two-dozen geographic markets that stretch from Los Angeles to Wisconsin to South Carolina.
But as with every large cable services company today, Charters total IT infrastructure is an amalgamation of gear and software cobbled together from acquisitions or rollouts in various markets. In Malibu, Calif., for example, subscribers use set-top boxes from Scientific-Atlanta Inc.; in Allendale, Mich., the boxes come from Motorola Inc.
Each market has its own VOD architecture organized into three basic systems: business management, where customer data is stored and fed to the billing department so that a VOD subscriber can be charged; session-resource management, which controls when a VOD request begins, pauses or ends; and content management, which oversees what video files are queued up to be streamed to users, when the streams should cease and so forth.
Pillai wanted a VOD system that freed those logical components from a specific vendor while handling the entire process. An open API would let him tie content management systems at the front end to any number of back-end systems, driving down Charters cost as it solicited more bids from more vendors—especially for the streaming servers, commonly known as pumps, that are the most expensive part of VOD gear.
“For me, the streaming server is just another application server. I dont really care what it is,” Pillai said. “We were able to open the pump market to anyone out there. We were able to look at performance, pricing and features.”
An open API would also let Charter explore new features, such as high-definition video or interactive advertising (two items Charter wants to tackle this year, according to Pillai). Another possibility is IPTV (IP over television), a Microsoft-backed idea to integrate digitally delivered video with other content that users might manage through their PCs and home networks.
Pillai said he might someday want to put an IPTV server at the front end of his VOD system. “I dont want to re-create my back-office interface with the billing system every time I deploy an application,” he said. “I want that standardized.”
Charter began dabbling with an open-standards platform in 2001; its first collaborator was nCube Inc., a startup in Beaverton, Ore., that makes VOD back-office management software. One goal was to design a deployment architecture that kept most bandwidth at the edge of Charters network, since the edge bore the brunt of traffic as subscribers jumped on and off the system. Strong management of IP traffic took place at the back end.
“We really pushed on that,” said Joseph Matarese, chief technology officer of C-Cor Solutions, which helped Pillai design the basic system in 2001 and 2002. (nCube was acquired by C-Cor Inc., of College Station, Pa., in January.) By placing traffic management closer to the back-office core, Matarese said, Charter could use fewer servers at the edge to dole out the same number of video streams.
“They didnt have to deal with a lot of operational complexities, like a lot of distributed server farms or content replication,” Matarese said.
In fact, centralized design was a centerpiece of Charters VOD goals, Pillai said. The VOD server sits in St. Louis and serves a market of 1 million subscribers. In Fort Worth, Texas, theres only one central server for the entire area.
“Early on, they appreciated that once you do the initial capital outlay and get your systems rolled out, then you really have to focus on reducing your operational costs,” Matarese said. “Centralizing was a fantastic way of doing that.”
Pillai wouldnt specify how much Charter spends on VOD equipment. He did say that an open-source platform allowed Charter to cut its spending on new VOD hardware by 50 percent last year, and he estimates a 30 percent reduction of the new total this year. “The savings is in the millions,” he said.
While Pillai was working with C-Cor to design one open-platform system, he was also working with another vendor to design a second system “to make sure we arent putting all our eggs into one basket,” he said. For that project, Charter last year turned to N2Broadband (acquired by Atlanta-based Tandberg Television Inc. last month).
Much like its work with C-Cor, Charter focused on N2Broadbands business management software and API flexibility to tie front-end servers to the platform. “The pump is the most expensive part, but its also the dumbest,” said Braxton Jarratt, Tandbergs vice president of marketing. “Its really just a bunch of drives and RAM sitting there.”
Charters open-platform systems now fall into two broad categories. First is the C-Cor architecture, as seen in Malibu. C-Cor provides its nAble platform for the business management system and the session-resource manager. nAble then interfaces with a MediaBase video server from Kasenna Inc., and the stream is sent to the users Scientific-Atlanta set-top box.
Second is the Tandberg architecture, demonstrated in Allendale. N2Broadbands OpenStream platform manages the business system and session-resource manager. OpenStream interfaces with pumps from Concurrent Technologies Corp., a supplier for Charters earlier VOD efforts, and streams are sent to Motorola set-top boxes. The system also operates a catalog of VOD choices through Gemster-TV Guide International Inc.
Currently, more than half of all Charters digital-cable subscribers have access to VOD services, Pillai said. Once he, nCube and Tandberg perfected the basic open-platform architectures, the challenge was simply to solve integration problems with equipment in various markets.
“I wouldnt call it rocket science,” Pillai said. “Its an art, yeah, but once you master the art, its pretty easy.”
Matarese agreed that “at the level of laying out integration specifications, it can be very much a cookie-cutter approach.” He expects the real chore for open-platform systems to be integration, as ever-more-sophisticated video services evolve. “Thats where the bulk of the work happens—proofing out these components,” he said.
Ramping up for the future
Pillai said he believes an open-platform VOD system will not only save Charter money but also generate new revenue. Charters back-end systems already feed VOD subscriber data to analytics software, which helps the company scrutinize market demands and determine the VOD services people want.
“You cant just go and deploy VOD everywhere,” Pillai said.
Deployments depend on the upfront cost of installation and the likely adoption rate by consumers; smaller, affluent communities might use VOD more fully than larger, lower-income markets.
Charters analytics software studies factors such as billing data and the percentage of free VOD offerings versus paid offerings. (The company has agreed to a one-year trial with Rentrak Corp., of Portland, Ore.) Already, Pillai said, usage data indicates that premium-channel VOD (for example, free on-demand Showtime for people who buy Showtime) prompts people to subscribe to premium channels.
Ultimately, Pillai said, Charter wants to see how VOD can reduce customer churn or boost subscriptions to premium channels such as Showtime and HBO. Hes also eyeing new services such as local VOD, high-definition offerings and even interactive advertising. “Were doing a lot more this year, actually,” he said.
Matt Kelly is a free-lance writer in Somerville, Mass. He can be reached at [email protected].
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