VMedia offers cloudy version of IPTV

George Burger wants to give Canadians a more streamlined television experience, yet analysts say the high-tech Internet-protocol TV offerings from his VMedia Inc. might have limited appeal. The IPTV service from VMedia now includes a cloud-based PVR, the company announced last week. Through a proprietary set-top box that includes traditional broadcast and cable channels as well as over-the-top content such as that from Netflix Inc., VMedia offers a “smooth, seamless interface" for watching multiple streams of content through one interface, Burger, director of VMedia, said in a phone interview on Monday. “We can see a future where all of your content needs are delivered to you through the cloud,” he said. VMedia, which provides Internet access and IPTV over cable and DSL connections, launched in March 2013 in Toronto and Kitchener-Waterloo before expanding to the rest of the province in July. VMedia offers customers who subscribe to its basic or premium Internet packages, which cost $25 or $40 per month, respectively, according to its website, the option to choose which channels to include in a TV service delivered by a proprietary VMedia set-top box. “We feel our pricing is better, our choice and flexibility,” Burger said. “The additional element that we bring to the table, in addition to better value, is also the fact that our set-top box allows you to access the Internet seamlessly. You can skip back and forth from TSN to Netflix, from YouTube to Bravo, without having to access any other hardware.” The set-top box is powered by a customized version of Google Inc.’s Android operating system, Burger said, and it is faster and more responsive than traditional cable boxes. The company offers a basic IPTV subscription package with bundled add-ons, much like mainstream cable subscriptions, while also offering a pick-and-pay system called UChoose, under which individual channels can be added as well as user-created channel bundles. The new cloud-based PVR, VCloud TV, is accessible via the set-top box and requires no additional equipment, Burger said. He added it is the first of its kind in Ontario. By creating the cloud-based PVR, which allows users to save shows for seven days from a select number of broadcast channels, the company was stepping into a thicket of regulatory and contractual issues. The company took pains to make sure its PVR fell within the bounds of copyright law and its agreements with content providers, Burger said. “Within the boundaries that are set on us by contract, we will provide you with as much choice and as much flexibility in what you want to watch as possible,” he said. “With respect to specialty services that are delivered under contract like TSN, like Sportsnet, like TMN, like all those channels, we have to be mindful of what's in those contracts.” Burger said the data is only stored the company’s in-house servers and securely streamed to the client. "We don't sublease space on anybody else's server farms; we have full control over those assets," he said. "It never has the risk of being in any way abused or pirated or copied on the customer side. It enhances the security considerations … of the content providers." Kelly Lynne Ashton, an independent television consultant in Toronto, said the VMedia set-top box and its cloud-based PVR might be too complex for ordinary people to adopt. “There's still an awful lot of consumers who just want to turn their TV on,” she said in a phone interview on Tuesday. “They want to use whatever their cable company gave them.” The potential for the biggest change comes not from the potential for VMedia to gain huge market share in Canada, she said, but from the large television companies using the threat from IPTV startups to ask the CRTC to get rid of the costly mandate for Canadian content, among other regulations, which does not apply to over-the-top services. “While (big telecoms) may be ultimately under threat, I think they are working very hard to be part of that new world and I don't think they're as much of a victim as they often plead to the CRTC,” she said. Ashton said the regulator, the government and the bigger service providers often seem to be “reacting rather than planning” for a new world of TV, and the government's long-awaited digital strategy, released on Friday, was a lost opportunity in laying out a coherent plan for the future. "There's a lot of things that the government could have done, particularly involving broadcast and content on digital, as part of making sure that Canadians have affordable access to digital platforms as a right of citizenship and having access to Canadian content when they go online," she said. "Supporting the continued digitization of the catalogue is not vision." The incumbent television companies will closely watch VMedia, she said, adding that it could be a potential takeover target if its service proves popular. Barry Kiefl, president of Canadian Media Research Inc., said that while the VMedia technology could be attractive for consumers, there was huge inertia in the market for television subscribers. “People are saying for the most part that they're comfortable with what they've got,” he said in a phone interview on Tuesday. “There's a market for , but there's a huge amount of customer satisfaction, or lethargy, to stick with the tried and true.” The Wire Report reported in March that the number of television subscriptions, overall, fell for the first time among Canada’s bigger publicly traded service providers in their last fiscal years. Kiefl said VMedia’s service will not necessarily be attractive to those who would otherwise cut the cord, yet could bring in the younger generation of cost-conscious consumers who grew up with streaming video. The CRTC is examining the pick-and-pay model at the behest of Heritage Minister Shelly Glover, and in the 2013 throne speech the federal government said it would unbundle TV services. " sounds an awful lot like the kind of thing the current government and the CRTC have been saying that they want to see happen," Kiefl said. "And it's coming from the market as opposed to regulation." VMedia has 7,000 customers overall, Burger said, and remains a “small player” that isn’t much of a “disruptive force” in the TV market. Burger says he envisions VMedia not as a "gatekeeper" determining what customers can and can't watch, but an "enhancer" to encourage and facilitate their viewing experience regardless of whether the content is from a broadcast, cable or online channel. "We have no problem providing access to content that we make no money off of," Burger said, adding that the company made nothing by offering its subscribers Netflix access. "We want to help you watch Netflix. We want to help you watch CTV. Use us, and you can watch both." Burger said the company is resigned to the fact that it might not make as much money per customer as other providers, but it will keep them happy and keep them around. "Whatever we do to forge strong and lasting relationships with our customers, the better off we'll be in sustaining our business," he said. — With reporting by Peter Henderson at phenderson@thewirereport.ca and editing by Derek Abma at dabma@thewirereport.ca

VMedia offers cloudy version of IPTV

Broadcast | April 8, 2014

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VMedia offers cloudy version of IPTV

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