How Video Streaming Apps Are Changing ISPs by Accelerating Innovation

Much has been made of cord-cutting and the undoing of traditional cable bundles. But not enough thought has been given to how changes in the underlying video delivery mechanism have affected TV formats and TV consumption. With streaming, any device with a screen can become a TV, including smartphones, desktop computers, laptops, tablets, even games consoles. Before this, only a few devices with appropriate set-top boxes could deliver TV.

Similarly, with streaming delivery, any company can become a TV provider and any home broadband internet service provider (ISP) can become a distributor of TV. This has caused the traditional cable and satellite duopoly for pay-TV to be overturned.

Upheavals in the TV Value Chain Created Opportunities for ISPs

Movie and TV studios now distribute directly to viewers through their own apps such as Discovery+, Disney+, Hotstar, NBCUniversal’s Peacock, or Paramount+. New entrants like Apple TV+, Amazon Prime, iFlix and Netflix have arrived. Increasingly content aggregation happens inside an app rather than being done in the built-in software of the cable or satellite set-top box that’s needed to receive broadcast TV over those technologies.

In this new order, broadband ISPs now have opportunities to take a greater role in the TV market. On a basic level, with fibre connections, they can upsell their customers to faster broadband that is better suited to delivering multiple streams of video in HD or higher-quality formats like high dynamic range (HDR), 4K or ultrahigh definition (UHD).

But the numerous TV apps in wide use also make it easier for telecom companies offering home broadband to have access to compelling TV and movie content. In the old world, traditional broadcasters and cable or satellite TV platforms typically tied up the most important TV and movie rights. Now, with the proliferation of apps and direct-to-viewer distribution models, a telecom company can secure its own attractive TV and movie programming.

Two Approaches to Aggregate TV: Apps and In-House Platforms

For TV streaming, broadband ISPs still need to have their own streaming box to offer to consumers alongside the broadband gateway. Many ISPs lack the desire or capability to build such a box. Arguably, France’s Iliad is a rare exception. The challenge for ISPs isn’t only the initial design cost, but the ongoing operational cost and effort needed to maintain the software platform.

Traditional broadband suppliers are now extending their customer premises equipment (CPE) offerings beyond broadband routers and Wi-Fi access points to offer streaming TV boxes to ISPs as well. An example is Telkomsel’s IndiHome set-top box, powered by Android TV and supplied by ZTE. Telkomsel reported it had deployed over 2 million boxes by July 2024, indicating the platform is capable of operating on a large scale.

An alternative approach, although rare because of the effort and cost required, is for broadband ISPs to become a TV aggregator and run their own TV delivery platform. Broadband and IPTV are no longer the preserve of telecom companies wishing to get into the TV market — leading traditional TV companies are switching from legacy cable and satellite platforms, demonstrating the viability of the technology.

In the UK, the strategy taken by Comcast-owned Sky reflects the switch to IPTV. The company is moving away from direct-to-home satellite delivery with its Glass platform, despite having been a leader in satellite TV for three decades, and having been acquired by a traditional cable TV provider. But to make this strategic move, providers need to source their own IPTV distribution platform.

Again, traditional telecom suppliers are moving into this space, an example of which is ZTE’s pay-TV platform. Notably, it uses AI to improve video upscaling, offer better multilingual support, and streamline operations and maintenance. It benefits from ZTE’s in-house Nebula telecom large language model. Additionally, ZTE is collaborating with French pay-TV platform-maker Netgem, demonstrating its desire to ensure the product is tuned to global needs.

From One TV Set per Home to Every Screen Is a TV

There’s another major change that opens opportunities for broadband ISPs with their home gateways and routers. The shift in viewing makes distributing high-quality connectivity throughout the home essential and is driving consumer need for Wi-Fi 7 and mesh Wi-Fi systems.

The multiplication of TV viewing devices has greatly increased the locations within a home where TV is watched. Many of the devices capable of running streaming TV apps are portable, for example: smartphones, tablets and laptops. As a result, TV viewing has shifted from one corner of a living room — plus perhaps a few other locations if a household owns a second or a third TV set — to being viewable in any room and any part of the room. This means the technology to distribute TV streams has switched from a wire, usually an analogue coax cable, to a wireless approach that can offer a good signal everywhere. This has boosted adoption of mesh Wi-Fi solutions that can ensure a signal reaches throughout a home.

Wi-Fi 7 is an important part of this journey because its ability to aggregate the different types of unlicensed spectrum — 2.4 GHz, 5 GHz and 6 GHz — makes the mesh links between each Wi-Fi access point much higher capacity and faster. It’s also essential if households are to enjoy the speeds offered by fibre connections wherever in the home they wish. For this reason, suppliers like ZTE routinely include Wi-Fi 7 in their fibre CPE, an example of which is the XGS-PON BE19000 ONT, which supports three-frequency Wi-Fi 7. As the device can connect to fibre broadband at speeds way faster than gigabit — hence the XGS prefix — having Wi-Fi 7 capability is essential.

The transition to IP streaming has also enabled the rapid rollout of 4K/UHD TV and HDR because networks and devices are more easily upgradeable to new standards. Previously, the quantity of spectrum available for over-the-air terrestrial TV limited the number of TV channels and the video quality of each. The higher the quality, the fewer the number of channels that can be supported. With the switch of much terrestrial TV spectrum to mobile usage, this problem has become even more acute. Although cable TV and satellite TV have much higher capacity, they have the same trade-off challenge.

Previously, delivering a step change in TV video quality required completely new distribution hardware, from the broadcaster’s distribution workflow or cable head end through to the tuners in the TV set or attached cable or satellite set-top box. The switch to IP video streaming delivery removes most of these barriers. Broadband speeds rise, enabling higher-quality video streams. The software on IPTV set-top boxes or the apps running on smartphones or tablets can be upgraded to support new features such as spatial audio technologies like Dolby Atmos. This is why so-called over-the-top TV streamers have been leaders in distributing HDR and 4K/UHD programming to the home.

The shift to spatial audio has boosted the market for TV sound bars. But service providers do not have to wait for consumers to buy their own surround system, because their traditional suppliers have offerings that they can sell too. An example is ZTE’s 4K AI set-top box, which integrates sound bar and TV streaming functionality, so minimizing TV cable clutter and simplifying set-up.

The Parallel between Video and Audio Format Changes

This shift to video streaming from broadcast technology has a parallel with the effect of audio platform changes from vinyl LP to compact cassette, to CD and now to streaming. In the LP era, albums tended to be no more than 44 minutes long and had a natural break for the side turn just before 22 minutes. With the switch to CD, the length limit switched to about 60 minutes, and artists adapted their albums accordingly. Music streaming has removed this limit entirely, so lengths have mushroomed, and multiple editions with numerous extras have now been appended to remastered album re-releases.

The video streaming market has been incredibly dynamic in recent years. In part, this is because the underlying video delivery platform using broadband internet is so versatile. With fibre broadband and Wi-Fi speeds rising, this innovation in the market is set to continue apace.