ADB’s advanced-digital strategy is paying off
In February this year, Geneva-based Advanced Digital Broadcast Holdings SA (ADB Group) released its 2009 financial report showing rather remarkable results, given the current rather depressed state of the market.
While many companies struggled to find their feet following the economic crisis, ADB’s revenue grew by 5.6% compared to 2008 and reached US$ 381 million; its earnings before interest and tax (EBIT) grew by 42.9%; and cash generated during the year amounted to US$ 47 million.
“The thing about our industry,” explains Paul Bristow, Vice-President of Strategy, Middleware & Consumer Experience at ADB, “is that it’s typically quite resilient to hard times. If you’re a consumer and you have to choose to spend a certain amount of money on going out to a restaurant or spending it on home entertainment for the whole family, you’re likely to decide to stay in.”
Sounds like a simple enough explanation but, as is usually the case, there’s more to it, and for the past 15 years, ADB has been working hard to secure its place as a leader in the advanced digital television industry.
A leader in industry firsts
Founded in 1995, ADB designs and manufactures a diverse range of products for the digital television industry. Their customers include digital television operators, consumer electronics manufacturers and retail distributors of digital set-top boxes. In the past 15 years, the company has sold over 15 million devices to customers throughout the world, including Telekom in Austria, TFN Media in Taiwan and YES, a satellite TV provider in Israel.
ADB aims to cover the full range of technologies required to view digital signals carried over all television transmission platforms: cable, terrestrial, satellite and IPTV. It is for this reason, as well as to ensure they have the most technologically advanced and reliable products in the industry, that 60% of ADB’s 700 employees are engaged in research and development activities.
“ADB is focused on advanced technologies and bringing in new innovations to the market,” Bristow comments. “The majority of our staff are software engineers and that is the magic that allows us to make these very complicated products and to make them in such a way that they work very well and are very simple to use by the consumer. We get them into the market very quickly and consequently we’re able to have a whole host of industry firsts.”
One such industry first was back in 2003 when ADB announced the world’s first hybrid Multimedia Home Platform (MHP) Internet set-top box with terrestrial reception. A year later, the company won two Cable and Satellite International Product of the Year awards for the ADB 3100TW hybrid IPTV/DVB-T set-top box.
Going hybrid all the way
Hybrid set-top boxes support digital video broadcasting (DVB) and Internet-based video. As a result, users are able to receive television services from different types of transmission networks simultaneously. Presently, over 75% of ADB’s products are hybrid-enabled.
“One of the big differences between us and some of our competitors is that when we talk about hybrid, we don’t just mean hybrid as in broadcast network content coming from the internet but rather hybrid in the wider sense of the word,” Bristow explains. “When you connect a set-top box to the Internet in your home, you are almost always connecting it to a home network and not just an Internet connection. When you do this, you want to have access to the content on that network; you want to be able to view your photos on your television, play your music through your television and watch your home videos directly across the network.”
With this in mind, and despite their success in the area, ADB intend to focus even more attention on their hybrid products in 2010.
“Last year, 75% of the products we sold were hybrid. This year we’re pushing really hard on the consumer experience and looking at how everything will work and come together,” Bristow says. “We’re focusing on hiding the complexity for the TV viewer and making this new technology quick, seamless and as easy to use as possible.”
Some industry experts have predicted that by 2013, 90% of all Internet protocol (IP) traffic will be video and, of that, 60% will be consumed over IP networks. This, and the fact that 75% of the set-top boxes sold by ADB last year were hybrid-enabled, indicates that operators are increasingly adopting IP technology.
IP technology allows operators to provide high bandwidth services, such as digital television, over the Internet. The data is encapsulated in IP and transmitted on-demand to a set-top box located in the home. The set-top box then decrypts and displays the signal on a television set.
What many people don’t realize about traditional cable and satellite TV broadcasters is that they send all available television channels at once and then the viewer chooses which channel to watch on the television set. With IP technology, however, the viewer can choose from any television content available from the operator and only this is sent to his or her home network.
It sounds great, but there are a few disadvantages of IP technology, most notably packet loss. IP technology has strict minimum speed requirements in order to facilitate the right number of frames per second to deliver moving pictures. This is not a problem in places like South Korea where six million homes have a minimum connection speed of 100Mbit/s. In places such as the United Kingdom, however, networks struggle to provide 3–5Mbit/s and, as a result, consumers might experience packet loss and delays. Until we all have Internet connections like in South Korea, hybrid devices, combining the advantages of both IP and broadcast technologies, will be the norm.
Despite this, ADB Deputy CEO François Pogodalla believes more and more operators will adopt IP technology in 2010 and that this will predicate a steady increase in the number of hybrid set-top boxes in consumers’ homes across Europe.
TV as a social experience
“Television is at heart a social experience,” Paul Bristow says. “People often talk at work about the programmes they watched the night before. We believe that as you start to connect your television to the Internet, you’ll want to move some of those conversations to real-time.”
ADB has started looking at how pay television operators can enable their subscribers to use social networks like Facebook, MySpace and Twitter to create a new real-time television experience that enables them to share both broadcast and on-demand content with their friends and family. ADB believes this will become an increasingly popular element of consumers’ television viewing experience and is something operators should focus on in 2010.
In an article written for European Communications last July, François Pogodalla stated: “Different markets worldwide may be going at different speeds, but they’re all moving in the direction of a hybrid strategy – bringing the Internet to the TV and adding local area applications will happen everywhere. Digital will do for television what it’s done for telecoms, which is to open up endless possibilities. The industry can now be really creative in exploring all the opportunities that a truly converged TV experience brings.”
Article by Alinka Brutsch