The recent HTNG Awards for “Most Innovative Hospitality
Technology” went to Philips MediaSuite Hotel TV, which says it offers hotel guests
online apps like YouTube, Twitter, Facebook, Catch-up TV, local and
international news, weather, games and more. In their marketing blurb, TP
Vision, who owns Philips’ hotel business in EMEA, claims that with their
system “there is no longer a need for a set-top box or heavy head-end investments, reducing the total cost of ownership for
a hotel.”
If only. Of course,
eliminating the set top box and head-end equipment is a very attractive proposition
for hotels. But, as I said in a previous blog, the scenario of removing a
set-top box or head-end is simply not realistic, and won’t be for some time to
come.
To illustrate just how far
away Philips and similar OTT-based solutions are from providing a viable option
for in-room entertainment for hotels, you only need to do some simple maths
around bandwidth requirements for the various services offered on an OTT-based
hotel solution.
Sure, social media apps don’t take up a lot of bandwidth,
and even VoD is manageable with a streaming bitrate of 2 Mbit/s for SD, and
8Mbit/s for HD. Assuming that the maximum viewing concurrency doesn’t exceed 10%
on average, this will require a 250 rooms hotel to have a 50Mbit/s – 200Mbit/s pipe
to meet this type of viewing behaviour.
But TV is where the bandwidth issue becomes more
perilous. If a similar traffic model is
applied to a cloud-based TV channel delivery service to a hotel room, the
bandwidth requirement would be at least 3 to 4 times higher than for VoD. So hotels are looking at 150Mbit/s –
800Mbit/s they have to provide to ensure reliable delivery of broadcast quality
TV channels to their guests – a big challenge to any hotel in developed
countries as it comes typically at a big cost.
According to industry analysts, video
currently consumes 29% of network bandwidth, which is predicted to increase to
40% within the next year. However, the same analysts say that the operators
they surveyed so far have only set 10% of their network capacity aside for
video technologies. But even where investment in FTTH and other infrastructure
technologies eases the issue of bandwidth availability, the cost to actually
provide the service reliably and offer hotel guests the QoS they expect, will
remain prohibitively expensive for a long time to come. And this of course negates
the supposed savings suggested by doing away with the traditional walled garden
equipment.
And let’s not forget the increasing wariness of network
owners about the demands the influx of these bandwidth hungry OTT services have
on their infrastructure. South Korea’s KT has been very vocal in chastising big
technology companies for free-riding on their networks and has warned of a “big
data blackout” if OTT players don't agree to help pay for the rapid growth in
data traffic that they are contributing to.
There is a reason why network operators are nervous about
this. A network provider typically pays a price per m/bit far in excess of the
charges it passes on to its end customers, hotels included. This is because the
retail market is not prepared to pay the same price per m/bit, particularly in
Asia, where upstream costs can be as high as US$18 per m/bit. So in order to
hedge against this imbalance, network providers use something called over-contention.
It’s a bit like the common practice of airlines selling more seats than they have
available to minimise empty seats. For the most part it works, but occasionally,
for whatever reason, some passengers have their travel plans thrown into chaos.
Translated to the hotel business, this means that in-room entertainment QoS
cannot be guaranteed, which is probably not the type of experience you want to
expose your guests to.
So unless the day comes when hotels are willing to pay for
the bandwidth required or the cost for a 1,000Mbit/s pipe goes down to today’s
cost of a 10Mbit/s pipe, OTT in a hotel environment remains only really a best-effort
delivery of long-tail content.
In the light of these issues it is puzzling to me why HTNG would give this technology its stamp of approval as its
most innovative technology. What is and isn’t innovative may be debatable, but
in my mind, a technology that is endorsed by an industry body should be a viable
solution, not a piece of wishful thinking that for the foreseeable future remains
out of reach for most hotels.
