Zattoo breaks into US with Hotwire, putting scalability to task

Recent moves from OTT video firms in Europe have applied some added pressure to Zattoo, but the Swiss internet TV provider has won an opportunity to quell its doubters with its first US win, at Florida-based telco Hotwire Communications – deploying the Zattoo End-To-End platform and service to “several hundreds of thousands of customers.”

Since its inception 10 years ago, Zattoo has racked up around 550,000 active subscribers in Germany, so being immediately tasked with a few hundred thousand extra will be a big test for the company’s technology. Zattoo boasts around 34 million monthly views on its free ad-supported offering, but there is much more at stake when serving video services to an operator’s customer base.

Hotwire is launching its Zattoo-powered TV Everywhere service sometime this quarter, heading first to browsers, iOS, Android and Windows 10 devices, with more support being added soon after launch. The live TV and VoD offering will include restart, time shift, catch-up and network DVR functions.

Zattoo says its platform handles components of TV services from ingest and applications, to content protection. Zattoo has the resources for encoding live TV signals into around 30 streaming profiles for multiple screens, supporting HDS, HLS and Smooth Streaming – but still no support for DASH after promising it will make this available for some time now. Zattoo also uses P2P technology to enable geographic targeting of users for advertisers.

Zattoo is deploying a central TV hub hosted by Hotwire in Florida to cope with demand, working alongside Hotwire’s headend and data center facilities with the aim of serving additional operators in the Americas. For the meantime, Zattoo will be delivering TV services for Hotwire’s Fision internet subscriber base across Florida, Georgia and Pennsylvania.

Notably, one of Zattoo’s main rivals in Europe, Netgem, only recently told Faultline Online Reporter of its hesitancy around entering the US market as it focuses on completing its work on HbbTV in Germany. That could be a wise decision given the high level of competition in the US, but Netgem may rue the day it allowed Zattoo to slip into the US market ahead of it.

Traveling in the opposite direction to Zattoo, last week Discovery Communications was recruited by German commercial broadcaster ProSiebenSat.1 to re-launch its 7TV streaming service as a free ad-supported version – spelling more bad news for Zattoo’s direct to consumer service.

This US break could be just what Zattoo needs and it will be interesting to see how it gets on when tackling new regulatory hurdles, given its track record of legal run-ins across Europe with Universal, Warner Brothers, the BBC, ITV and Channel 4. These clashes have hindered Zattoo’s expansion efforts in Europe, so it’s no wonder the company has not just looked elsewhere for business, but has diversified its business model – from starting life as a live streaming website to becoming a supplier of TV technology to operators and media companies.

Zattoo quietly closed down operations in Norway and the UK last year for unknown reasons, when at the time it had gone from serving 2 million monthly active users to 1.2 million, but said overall open accounts increased from 15 million to 17 million between November 2015 and early 2016. However, Zattoo then quietly relaunched in the UK, where it is only available on PCs not mobile devices – suggesting there was an issue with the mobile rights for showing certain content.

Hotwire Communications’ VP of Engineering, Emanuele Jones, said, “Our cooperation with Zattoo gives us freedom and flexibility to support the specific requirements arising from our business model of serving a large number and wide variety of different communities. Among all the solutions we looked at, Zattoo stood out with its experience and scale serving millions of TV customers in Europe, as well as with the support of a wide range of devices. A key deciding factor was the rich feature set that Zattoo’s TV-as-a-Service platform supports out of the box.”

Gernot Jaeger, Chief Officer of B2B TV Solutions at Zattoo added, “The entry into the US market is a crucial step for Zattoo in our global expansion strategy and roadmap.”