Do your subscribers ask for premium content? Where do they want to consume premium content? How to compete with established OTT brands? Faced with this need, how can Altibox keep their subscribers happy?
Many telecom operators are grappling with this problem right now. Altibox, a part of the Lyse Group, is Norway's biggest provider of FTTH broadband through the unique Altibox partnership model. It has 500,000 broadband households and which contain around 25% of the Norwegian population, and near 400,000 pay TV customers. Working with Huawei on the platform side, Altibox has gradually developed an approach to content acquisition based around "Freedom of Choice". This means that subscribers can compose their own bouquet of content they want to watch, and this freedom has drawn viewers away from the tablet, and back towards the big screen. In a world of falling viewer numbers, Altibox has rapidly grown its IPTV audience. Altibox has also become Norway's only provider of UHD IPTV services.
It has not been easy for Altibox to establish itself as a successful IPTV provider. There have been plenty of challenges along the way.
Norway is an extremely competitive market, and in the area of video there is competition from international giants like Netflix, HBO, Amazon Prime Video and YouTube, along with local players such as GET, Canal Digital, and RiksTV. Also, the local broadcasters work closely with Norway's operators, and offer at the same time their own video-on-demand OTT services. Norway has a very advanced infrastructure and high Internet broadband speeds.
It was a number of factors including the change in customer behavior and paradigm shifts that made Altibox enter an agreement with Huawei on its video strategy. The operator hoped that Huawei's comprehensive experience would help it negate the increasingly fierce technical challenges from other pay TV operators and OTT providers. They set themselves a goal of delivering the most cutting-edge viewing experience to the widest audience.
Acquisition of content is a key element in achieving video success, so it was a challenge which Altibox had to address. Altibox has a strong know-how related to acquiring content. They decided to make HBO Nordic content available on the Altibox platform, and as a result the number of new users started to grow sharply. All HBO Nordic content is organized in one SVOD kiosk making it easy for subscriber to subscribe and consume the content. The HBO service is also produced by Altibox to secure full end-to-end quality. Altibox now offers a selection of nearly 10,000 HBO movies and TV episodes. Altibox has now a total of 5 SVOD services integrated into their platform including 127 000 assets from NRK. The value proposition to the customer is to offer content anyplace, anywhere, anytime and on any device. The content is offered through its own IPTV system.
Altibox is building a one-stop platform for entertainment, which gives it full control over both content aggregation (upstream) and delivery (downstream). The consumer can find everything they want to watch on the Altibox system itself through global search.
When the new IPTV service went online, it was like a revolution in the living room. Previous home entertainment packages had been delivered by the set top box itself. Shows had to be saved on local hard disk and STB did not offer time shift TV or catch up TV; users had to set the box to record the shows they wanted, then they could watch when they had the time. Once Altibox started working with Huawei, all content was stored on the cloud, and could be accessed at any time on any device. It was a huge improvement in the user experience.
The success of the video service also started to help drive broadband bundle sales. As video sales swiftly mounted, households were using more and more data. For example, with the new Huawei platform in place, Altibox found that streaming increased more than 2000%. And when ultra HD content was added to the system, this drove data flows even higher. Altibox had put 300 Mbps to its basic package. This was in part based simply on the need for more bandwidth, but also on the need to compete.
Altibox's success with IPTV has brought a range of positive developments. As well as more sales, it earned some impressive word-of-mouth for its user experience.
Pay TV audiences are sliding all over Norway, but Altibox has bucked the market trend, and seen an uptake in both broadband and IPTV subscriber numbers. It generated higher ARPU with its broadband + IPTV bundle, and increased IPTV penetration: The offer of new Hollywood releases has boosted pay-per-view sales (Altibox has the latest license window from Hollywood studios in the market), and that has brought a rise in IPTV ARPU. Video services are now driving revenue in both content and broadband sales, meaning that Altibox is now enjoying synergies between its video and broadband businesses. Altibox falling TV penetration rate has now been reversed and increased.
The new UHD set top box and the high-speed fiber network covering the whole country have enabled a vastly improved user experience, with UHD video and interactive multiscreen viewing. Users can search all online and recorded content by actor name or movie title. One of the most popular features is Start Again, which allows a viewer to watch a TV show from the beginning, even if they joined the program late. The offline record function and seamless integration of multiple screens mean that users can access the shows they want any time, on any device and anywhere.
Eric Zhang, the former CEO of Huawei Norway, commented, "This is a historic moment for Altibox and Huawei. We are extremely pleased to have helped Altibox develop Norway's first UHD IPTV service, which has brought Norway's consumers a new kind of entertainment experience."
Altibox's CEO, Thomas Skjelbred, noted that customers are telling us that the new IPTV service had made their young children’s abandon their iPad and return to the TV. Asking around on any Stavanger/Oslo bus or metro, and you will hear that everyone loves the new TV services from Altibox. Independent media reviewers have been unanimous in giving the new IPTV services a very warm reception.