Harmonic, as one of the longstanding dedicated video infrastructure providers, has been struggling for air for several years now as its rivals have either consolidated or been acquired by larger general networking players such as Ericsson, Cisco or Nokia.
Revenues have been bumping around $400 million a year since 2014, sagging if anything, while profits have at times been minimal. Yet the company has continued on a commendable journey of innovation inspired by internal evangelists, and this has sustained hopes of an elusive return to growth.
The firm has established a leadership role in Ultra HD standards developments and in streaming technologies without as yet gaining much return for that investment. However, there was a slight uptick in its Q4 2017 figures with indications that investment in sports streaming was starting to pay off. There were a few notable customer wins, such as Indonesian sports aggregator SuperSoccer, which was seeking a video infrastructure platform and in February 2017 selected Harmonic’s VOS 360 Software-as-a-Service (SaaS) offering.
Harmonic has also been riding the US skinny bundle tide with VOS being adopted by some of the new entrants there pushing up its total of OTT channels deployed globally to 32,500 with 2,500 of these being cloud-native. One such new entrant is Vidgo whose skinny bundle is aimed at younger viewers who are either churning from legacy pay TV services or are “cord nevers” who never had one. The key attraction for such providers is more the cloud capacity lying behind the platform enabling elasticity and a pay as you go model, but Harmonic is doing a good job linking up with the main partners, especially Akamai and AWS (Amazon Web Services).
Harmonic is now also targeting what it sees as a fast-emerging market for UHD sports streaming which it expects will begin on an occasional basis and be ripe for the elastic cloud-based SaaS model as service providers dip a toe in the waters. Harmonic recently noted how it was only in 2015 that the US National Football League (NFL) streamed an entire game over the internet, the first time this had been done for a major sports event. Yet now live sport is almost on a par with traditional broadcasts in some markets.
Harmonic’s Thierry Fautier, VP video strategy, who doubles as the UHD Forum’s President-Chair, reckons UHD sports streaming is poised for a similar uptick partly through maturation of the technologies and arrival of the Ultra HD Forum’s Phase 2 specifications, adding High Dynamic Range and faster frame rates to the increased 4K resolution. But in particular he highlighted lower latency, cloud and content aware encoding as key drivers for UHD streaming. Latency has been a bugbear for sports streaming by delaying playout by up to a minute behind broadcast in some cases, prompting some proprietary market innovations, for instance the one which showed simultaneous viewing of Formula 1 racing, from Sweden’s Net Insight.
Now CMAF (Common Media Application Format) is emerging as the most efficient mechanism for packaging media fragments in streams, with a special low-latency mode that brings streaming latency down to 5 or 6 seconds with correct implementation, well inside, for instance, the satellite broadcast threshold of 8 seconds, leaving a little headroom for service providers.
Then cloud addresses some of the logistical and financial challenges for smaller or emerging service providers, by slashing upfront investment and maintenance costs. SaaS solutions are based on a pay-as-you-grow approach that dramatically speeds up the time to market for OTT offerings. Then content-aware encoding will also aid the economic case for mass distribution of UHD HDR sports streaming services by reducing bandwidth requirements for OTT delivery by up to 50%.
Harmonic is not of course alone in targeting UHD sports streaming with a notable competitor being Wowza, which already has a significant presence and also partners with both Akamai and AWS. Wowza, based in Colorado, has gained some traction among broadcasters and content owners seeking new or existing customers via Facebook, with which it has collaborated to develop a dedicated appliance called ClearCaster which supports 4K as well as full 1080p HD.
But Harmonic also has other strings to its bow, including the related area of hybrid TV and in the US the big story there has been the arrival of ATSC 3.0, the third generation of US terrestrial standards. This is more than just a US story because ATSC 3.0 represents moves towards global digital terrestrial standards convergence and also integration with broadband delivery. South Korea has played a notable role and was actually first to endorse ATSC 3.0 as its standard for UHD TV in July 2016, with all TVs from LG now incorporating tuners for it.
Not surprisingly then ATSC 3.0 featured strongly at the recent NAB 2018, although it was not Harmonic, but a group of French companies comprising the Convergence TV project that stole the show. This group included codec vendor Ateme alongside CDN software developer Broadpeak, DTT transmission company TDF and two academic institutes INSA Rennes and Telecom Paristech, demonstrating hybrid delivery of HD and UHD over combined broadcast and broadband paths under ATSC 3.0. This avoids simulcasting since the broadcast path delivers the HD signal, leaving the broadband path only to transmit the enhancement signal from HD to UHD. This is made possible by using the scalable HEVC (SHVC) for audio and video compression, so that both are fed from a single SHVC encoder, delivering the base layer signal to the broadcast chain and the enhancement layer to the broadband chain.
At least all the buzz at NAB gave Harmonic the chance to reassert its credentials in ATSC 3.0 and argue that broadcasters need to prepare for migration and partner with an expert in video delivery infrastructure such as itself. The company still seems immune to the takeover activity that has mopped up its competitors and it remains just about the only mid-sized player surrounded either by giants like Arris and Nokia or relative minnows such as Ateme and Appear TV, although some of these are now catching up. Harmonic itself took out one of these, Thomson Video Networks, whose acquisition it completed on in July 2017. For the moment then Harmonic’s immediate future looks secure, but those shoots of renewed growth are still tentative.