Former Insight Communications CEO Michael Willner says he expects major pay TV distributors to begin offering products later this year which will allow subscribers to transfer programs stored on a DVR to tablet computers and smartphones. Willner and Insight co-founder Sidney Knafel recently bought a controlling stake in IP video software developer Penthera Partners. The company is pitching cable operators, satellite TV providers, telcos, programmers and hardware manufacturers software that could be used to transfer high-definition programming from DVRs or cloud-based servers to mobile devices, and software that could allow consumers to share video shot with a smartphone with anyone connected to a cable set-top. In this interview with FierceCable, Willner talks about Penthera's strategy and moves he expects cable operators to make in offering subscribers advanced mobile video products. Verizon's (NYSE: VZ) joint venture with Comcast (Nasdaq: CMCSA), Time Warner Cable (NYSE: TWC) and other cable MSOs--and their plans to develop products that rely on digital cable programming and Verizon's network--could bode well for Penthera, Willner said.
FierceCable: We're seeing both satellite providers and cable operators looking at using side-car set-tops to allow subscribers to transfer programs from a DVR to a tablet or smartphone. Could Penthera play a role in that type of product?
Michael Willner: That's a part of what Penthera can do. It can be the driving engine that efficiently transfers these very high capacity, high consuming programs, which are high-definition, one-hour video programs or more, into a mobile device. In any arena that involves the transfer of this kind of data from place to place, Penthera can and should play a role.
FC: Do you have any pay-TV customers that you're working with today?
MW: We're working on license agreements with distributors and programmers. It's not just cable. It could be telephone companies, it could be satellite companies. There could be hardware manufacturers, cell phone manufacturers. There are a lot of different business to business relationships that can grow out of this technology. There is also consumer facing product that is in the Apple (Nasdaq: AAPL) app store, which is Ribit, which is the video sharing portion of this.
FC: Verizon and its cable MSO partners have said that they will develop products that rely on digital cable programming and Verizon's network. Could that be good for your company?
MW: That's a great platform for this type of product to reside upon, where customers are already identified as Verizon cellular customers, and perhaps a Comcast or Time Warner Cable customer, and this is about the possibility and the probability of customers wanting to transfer cable product to a mobile device, or a mobile generated product back up to a cable device. That's a natural place for us.
FC: When do you think we'll see products like that available?
MW: I think the answer to that is more in the hands of the people who are going to be our customers, and when they want to launch them. I think there is a serious push on the part of the cable world to move rapidly into advanced mobile video, and I wouldn't be surprised if you start hearing more about it later this year.
FC: How much of a challenge are rights issues?
MW: Rights are definitely part of the puzzle here. I think some rights are being cleared now, which is why I think this is the right time for MSOs to consider launching. And by the way, rights are an issue with what we call the Virtuoso product, which is the download content to a mobile device so you can take it with you product. But for Ribit, which is the video sharing product, that's user generated content, so there are no rights issues there.
FC: Would you expect a subscriber to transfer programming at home, before he leaves the house to go to work, or would a subscriber download content remotely?
MW: Anywhere--that's one of the great advantages of it. The idea is, as long as you are authenticated and authorized, and you have a connection that is transferring the data at speeds that are acceptable in an environment that is open to it, you can transfer it from a hotel, from a city park, anywhere you are, as long as you are connected. And you can take it with you and watch the program, even if you're on an airplane, or in a place where there is no WiFi connection.
FC: Why did you invest in Penthera?
MW: I think Penthera represents to me an opportunity to both invest in and get involved with a technology and a product line that is very consistent with one of the things that I had been focused on as a cable operator, and that was the development of advanced video services and the transformation of the conventional cable business. I was intrigued with the role they could play in helping not just cable--but other industries as well--facilitate consumer demand for watching what they want to watch, when they want to watch it, wherever they want to watch it.
FC: What can Penthera offer a cable operator or programmer that isn't available to them today?
MW: The fundamental product is an engine that can move large quantities of data in either direction, either up to or down from a storage facility, i.e. the cloud. They've developed software that allows at multiple levels, consumers, network operators, program content owners, hardware manufactures, to set certain parameters under which these transfers can take place more efficiently, more cost effectively, with less drain on the resources that are available, like the resources within the device itself--batteries, memory, the resources that are in the network connection to the device, the resources in the pocketbook of the consumer which may be sensitive to allowing transfers to take place on a 4G network during primetime, when the costs are the highest. All of those parameters can be set by the various constituents. That's the secret sauce that this company has built in its software.
FC: We're seeing more cable operators explore network-based DVRs. Could Penthera help cable operators deploy network DVRs similar to Cablevision's product?
MW: Going from a network DVR to a set-top box is pretty much a headend to customer premise experience. That's in the environment of the video network that cable operators have deployed. There's no direct correlation for Penthera's products to occur in that environment, although there's nothing stopping the Penthera technology from being adapted to that platform. Primarily what Penthera is focused on is the IP world, and the ability for customers to download product that they're authorized to receive, like episodes from Showtime, and take it with them, which is different than the mobility which is out there today, which requires a high-speed, high-quality connection to stream it. This is download-to-go, so to speak. And it also allows people who are taking a five-minute video of junior playing in the Little League to upload in a very efficient way as well, so that grandma down in Delray Beach can watch it as well, whether she wants to watch it on her iPad, which she may or may not own. If she doesn't, she could watch it on her set-top connected to a cable system.
FC: Insight was one of the first cable operators to get into interactive programing and advertising. Do you think that operators are now more focused on the second screen, and using mobile devices to offer interactivity, and that the idea of using technology like EBIF to offer interactive programming is going away?
MW: I don't think there's an either/or going on here at all. I think cable service is interactive--it's becoming more interactive as we speak. The ability to do more transactional oriented responses is still under serious development by the MSOs, but this is just a different part of the next generation of video service. This is trying to be a solution to the consumer demand. As I said earlier, they want to watch what they want to watch when they want to watch it, wherever they want to watch it.