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PPV: Consequence of Using Store & Forward Authorization
Devils in the details of managing a successful PPV service
By: Bruce Bahlmann - Contributing Author (your
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Created: September 11, 2003
This paper is the product of VoD Market Research which is available from Birds-Eye Network Services. The software solution discussed within this article is available from Birds-Eye Network Services
custom reports area.
Pay-Per-View (PPV) is big business whether you sell movies to your private cable operation subscribers or in-room movies to apartment residents, hotel guests, or university students. In 2002, PPV brought in a whopping $2.4 billion – more than a quarter of what was taken at the box
office and more than a third of what rental movies grossed. PPV revenues amounted to about 2.5 movie purchases per active PPV cable subscriber or about $12 in gross revenue per active PPV subscriber. Video service providers offering PPV net about 50% of gross PPV revenue on average.
Although these revenues for PPV intrigue many operators (e.g. cable operator), the process of implementing and maintaining PPV is significantly less glamorous. Veteran operators will tell you the devil is in the details and in the case of PPV, nothing is farther from the truth.
The process of offering and collecting for PPV movies involves a number of different steps the result of which average between 80-90% reliability. In other words, up to 20% of your subscriber PPV buys generally can go unrecorded during the month they take place. Some purchases are unable to be
associated with subscribers and become orphans – or completely written off as uncollectible. How can this happen and how can this be fixed? In this article we’ll provide you with a behind the scenes glimpse of PPV and some promising new ways to get your arms around some of its inherent
inefficiencies.
Figure 1.0 PPV Process
Figure 1.0 describes the inter-workings of PPV from an extremely high level. From left to right, the process begins with the PPV content provider. The PPV content provider defines their program lineup and queues this content up to be transmitted to their subscribers (operators)
via a satellite uplink. Up to a month before the actual video content is transmitted, details of the programs, times, etc. are communicated to a data provider who assembles this textual information into a neat package that is then sold to operators to use for billing and to support their electronic
program guide (EPG). Operators receive this raw information and then associate a unique internal number and price to each and every PPV program. The unique number is called a program ID number and it is used by both the billing system and the conditional access system (CAS) to identify this program during
the month it is used. Since most conditional access systems are relatively old, they do not support very large program ID numbers – a majority of these systems only support a four or five digit number. The implication of this is that only 9,999 or 99,999 programs can be offered each month before the
unique program ID number must be recycled (reused).
A single PPV channel offering 24 hour movies could potentially use up to 384 program ID numbers a month. That is essentially one program ID number every 90 minutes for an entire month.
An operator using a conditional access service that only supports a four-digit program ID number can at most support 26 unique PPV cannels a month where as an operator that supports a five-digit program ID number can support up to 260 unique PPV channels a month. Regardless of how
many program ID numbers a conditional access system can support, most operators have been trained by the limitations of previous equipment to recycle their program ID numbers monthly – that also coincides with the fact that their conditional access systems only maintain 2-4 weeks worth of programming
information at a time. As a result, the additional number of available program ID numbers generally translates into increasing the number of PPV channels an operator can offer on a monthly basis.
Typically smaller operators only host a handful of PPV channels. Larger operators will host up to 26 while very large operators may offer up to 50 (or more) PPV channels. Although a number of PPV channels offered by the large operators are being converted to Video on Demand (VoD),
it is not believed that VoD will completely replace PPV anytime soon. A number of key programs like college football, professional wrestling, and boxing remain very profitable PPV content. In fact, PPV may continue to receive first run movies before VoD and/or be priced less than VoD movies. As a
result, PPV may coexist with VoD indefinitely.
Once all programs have been assigned a price and a unique program ID number, this information is uploaded into the operator’s billing system as well as the conditional access system where it will wait until just days before the programs are transmitted from the PPV content
provider. At this time, the conditional access system broadcasts the program information down the last mile (e.g. cable plant) for set top boxes (STB) to store. STBs generally store anywhere from 5-7 days worth of programming information. Unlike video on demand (VoD) that allows subscribers to
purchase and immediately view their selection, PPV must be purchased in advance of the movie starting (generally this interval can be as much as days before the program starts or if the movie just started it can be purchased and viewed up to 5 minutes into the movie). However, once a PPV movie starts
it cannot be paused, rewound, etc. rather it works like any other live broadcast. The program guide information is necessary to enable the viewer to purchase the movie from their STB as it tells them exactly what they are buying.
When a subscriber finds a program they want to view, they simply buy this via their remote and wait for the program to start. PPV programs start at staggered intervals so it is pretty easy to find something acceptable to watch within a convenient amount of waiting time – this is
especially true if the operator offers 20 or more PPV channels. When you purchase the program, everything happens within your STB. Meaning, the STB force tunes to the channel where the PPV movie resides just seconds before it starts (in case the user is watching something else) and then permits the
movie to be watched on an otherwise unavailable channel. The PPV content provider distributes the movie content via satellite to all operators. Operators in turn pull this information off the satellite and then send it down to their STBs. Behind the scenes, the STB records the program ID number,
time, etc. about the program purchased. This information remains protected and stored within the STB until it is retrieved by the conditional access system. When the movie ends, the channel becomes unavailable again. However, before the movie can be billed to the customer, the conditional access
system must perform a successful purchase poll on the STB to collect and clear all purchases.
PPV purchases could just as easily be negotiated with the conditional access system at the time of purchase rather than stored on the STB for later collections. In this way, there would not be a need to regularly collect purchase information from individual STBs because the
conditional access system already has this information. However the problem with this method is that purchase requests for popular programs or events could potentially overwhelm the conditional access system thus preventing some users from buying their desired program. Rather than depending on an
always-available conditional access system to handle real-time PPV purchase requests, operators settle for performing nightly polls to collect and clear PPV purchases from individual STBs. This “store and forward” approach is the generally excepted way to collect both PPV and some VoD purchases. Upon
completion of the purchase polls, this information is eventually uploaded by the billing system where it can be appended to the customer’s account in preparations for being figured into the end of the month billing cycle and the whole cycle starts all over again.
Reconciliation Activities
The purchase polling method has its downfalls. The most serious issue being the fact that it requires an upstream channel between the STB and the conditional access system. Large operators are especially impacted by this requirement as most dedicate their premium upstream channels
(those with the least amount of noise and interference) to telephony and high-speed Internet services. The remaining upstream channels available for STBs are marginal - this adversely impacts successful purchase polling of STBs. As a result, an appreciable number of STBs on an operator’s system
become what is called “nonresponsive”. They are nonresponsive due to the fact that they have failed to respond correctly to ongoing purchase polling that is performed by the operator’s conditional access system. An operator can see as many as 20% of their STBs become nonresponsive and this number
fluctuates. Hidden within this number is a small percentage of STBs that have been adversely affected by subscriber tampering (such as moving their STB to a new room which is fed by a splitter that is not two-way capable). The number of subscriber-tampering causes of nonresponding STBs is believed to
amount to about 1-2% of the overall nonresponding STBs. The remaining percentage of nonresponding STBs are considered self-inflicted by the operator either through their use of marginal upstream channels, inadequate plant maintenance, or even improper STB installation. Since operators cannot be rule
out the possibility that the source of the problem lays within the subscriber’s home, the only way to positively correct a nonresponding STB is to schedule a service technician to visit the subscriber’s home.
While operators are now favoring STBs that feature a DOCSIS out of band data channel that can exploit this more reliable connectivity to conduct their purchase polls, a majority of their STBs still use the proprietary upstream channel located within a marginal area of their
upstream spectrum. DOCSIS STBs are still susceptible to nonresponding and are currently worked manually -- similar to STBs using proprietary upstream interfaces. When these STBs turn nonresponsive, manual efforts are expended in order do what is necessary to permit a successful purchase poll and reconcile whatever PPV purchases are currently stored on the STB. These manual processes have been known to decrease non-responding rates down to
the 2-5% range – an improvement that requires significant personnel commitment to achieve. In fact, the level of effort needed to bring non-responding STBs below 5% increases exponentially with each percentage of improvement. Most operators cannot economically antae up this many resources to manage
these non-responding lists and thus fall into the 5-10% (or more) range. Some operators refuse to manage the list at all or simply disable PPV services on these nonresponding STBs until such time a service call is required at the subscriber’s residence.
The economic impact of nonresponding STBs can be significant. On average, each nonresponding STB costs the operator $9.65/month which includes opportunity costs and labor costs to resolve the matter. Each responding STBs nets the operator about $6/month in revenue on average. Each
percentage of nonresponding STBs costs the operator about 1.89% in costs and lost revenue. For example an operator with 10,000 STBs receiving PPV with a 15% nonresponding rate produce a PPV revenue stream of about $51,000 but also create a combination opportunity cost and actual cost of $14,475. If
you only take into account actual expenses of each nonresponding STB this cost is much lower ($2.45 per nonresponding STB). Unfortunately, if you cannot resolve these nonresponding STBs within one month, the PPV purchases stored on the STBs could become orphans. Meaning, their program ID number
becomes associated with a different program. These subscribers could argue that if billed for that incorrect program they could refuse to pay it upon the grounds that it is improperly identified. Ultimately any STB that has been nonresponsive for more than 30 days is generally beyond help and may
ultimately be written off. The resources required to resolve these STBs (those nonresponding more than 30 days) produce diminishing returns as the chance for successful reconciliation decreases with each day.
Successfully Resolving Nonresponders
Some exciting new ways to successfully tackle nonresponders has recently surfaced. The key to these solutions is the result of extensive analysis of what is causing nonresponders. These solutions break out plant causes, customer causes, device causes, and installation causes.
Together these causes can be compared and contrasted at different levels to formulate the most probable smoking gun. In contrast to this multi fascist approach, most operators rarely employ technology or automation in their efforts to resolve nonresponding STBs. In one notable instance where
automation proved especially effective, a large group of nonresponding STBs were associated with a particular interface card and once the suspected card was replaced all these STBs began responding normally – a savings of dozens of phone calls to these subscribers as well a quite a number of service
calls, none of which would have ever been able to find the actual source of the problem. These solutions may pave the way for enhancing and speeding the resolution of problems for other services as well.
Check out these other Birds-Eye.Net papers/products regarding
nonresponding STBs:
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