Thought Leaders in Mobile and Social: Mark Hyland, VP of Sales and Marketing, QuickPlay Media (Part 8)

Sramana Mitra: All the storage is in the cloud.

Mark Hyland: Storage is in the cloud, streaming. There are still some use cases where it makes sense to have downloading capability. So, we enable that. What we’ve done in software and replicate everything that a traditional set-top box does. It does the conditional access and the security.

SM: So, it’s a set-top box in the cloud.

MH: Exactly. We think we can take a lot of costs out of the system, capital costs of doing the set-top box, and track rules of the logistics and installation. Then you’re going to have an interesting world where network providers can compete out of footprint. Today, you’re in a Comcast area, and you can get Netflix or whatever. But tomorrow, maybe you’ll have a great offer from an AT&T or Charter that’s offering you a pure IP service. Kids at universities could get skinny TV services where they’re paying a lower amount per month, and they’ve got a great on-demand catalog and their sports channels and stuff like that. So, maybe it’s a $10 or $20 offering instead of a $50 offering.

SM: And you don’t need armies of people to go fix equipment.

MH: No. It’s software. If there’s a problem, you’ve got an update in the app store.

SM: It’s software in the cloud?

MH: Yes.

SM: That’s a big difference.

MH: Yes. Those are some underlying shifts. For consumers, it’s ultimately more choices, more devices, and more convenience. It’s  a good time to be a TV watcher. I think there are going to be lots of positives there. But the infrastructure to deliver all of that goes through a huge sea change over the next decade.

SM: That infrastructure is messy and cumbersome today.

MH: Yes. There are mixes of analog and digital. There are lots of big iron delivery big VOD files that are specifically formatted for certain set-top boxes. All of that goes to IP. We ingest a high-quality live stream or high-quality mezzanine video file of a movie, and essentially, we can deliver optimized versions of that file or stream whenever, wherever. For us, it’s a simple thing to draw on a whiteboard. The difficulties shift from different formats to managing storage and delivery and concurrency and all those types of clouds.

SM: That’s a hairy technical problem, what you’re solving.

MH: Yes.

SM: I think you said you’re at about $30 million in revenue. Are you profitable?

MH: We are choosing to reinvest and expand the business. We’re close to positive. It could be at that level, as you can see. We got big news in July. The majority interest was bought by Madison Dearborn Partners (MDP), a major private equity firm based in Chicago. They purchased a majority stake in QuickPlay, and they are big believers, having done a lot of due diligence on us in the marketplace and customers and prospects. They want us to invest, especially within the U.S. but also in Europe and Asia.

SM: What’s happening in Asia?

MH: Asia’s fascinating. We have a great window on Asia with one customer, TVB. TVB is probably the biggest distributor of Chinese language programming in the world. They were best known for discovering Bruce Lee, Shaw Studios, the Shaw Brothers, and so on. They’re incredible content providers and visionaries in the sense that they said, We’re going to take all of our programming, both live and on-demand, and make it available in a free, supported service. So, it’s web, tablet, devices and, as I mentioned, people have found all kinds of ways to connect to that service. It is getting massive usage. I think it’s only going to get bigger.

SM: What are the areas?

MH: The area right now is limited to Hong Kong, but they do have content that plays in other parts of the world where there are Chinese language speakers. For us, Asia is first of all … there’s a real business model for an ad-supported model. TVB is proving that today. We think there’s also room for premium. They have premium channels and other specific content they’ll do as a subscription service. The networks are there. The devices are there. Traditionally, our proofs have been low for things like satellite TV and so on, but that’s changing. There are wealthy parts of Asia that are interested in buying the same types of services that people in Western Europe and the U.S. are in terms of channels, video on demand, and all the latest movies.

SM: Your assumption is that there needs to be broadband penetration for this service to be viable.

MH: Yes. But what’s interesting, one nugget that we’ve learned about Asia, is that for video, PC is important but tablets are more important. The key faceted broadband penetration is wireless broadband not necessarily wired, because we’re finding that tablet and mobile use are outstripping PC use. We’ve always had the vision that there would be more mobile devices.

SM: What are the regions other than the U.S. and Western Europe that are top adopters of wireless broadband at the consumer level?

MH: Korea, Australia and New Zealand, and Singapore. We’re starting to see interesting wireless broadband penetration in markets like Thailand, Malaysia, and India. India and China are almost separate categories. They’re gigantic. I would say we’re trying to learn a little bit about China through our work in Hong Kong. I’ve been to China a few different times, talking to partners. It’s out there in the future, but we’re in a learning stage right now.

SM: Cool. Thank you, Mark, for taking the time.

MH: Thank you for having me.

This segment is part 8 in the series : Thought Leaders in Mobile and Social: Mark Hyland, VP of Sales and Marketing, QuickPlay Media
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