UPC Hungary is delivering YouTube content to its subscribers entirely through the cloud, using ActiveVideo’s StreamCast platform and associated cloud service.

While delivery is through UPC Hungary’s set-top boxes, there is no software resident in the box to enable the delivery, according to the companies involved.

UPC Hungary is, in a way, hosting a YouTube app in the cloud. Although a box is involved, UPC’s rollout of a YouTube app is significant because it takes the box out of the equation.

MSOs have long complained about the legacy boxes they have installed – boxes with limited processing and memory resources, because they pose a significant constraint to rolling out new services. If companies such as ActiveVideo can perform all the functions of a set-top in the cloud, those constraints are loosened, and perhaps can even be removed entirely.

UPC Hungary, part of Liberty Global, has had the service up and running for a few weeks. ActiveVideo said it has already exceeded both usage and engagement targets for the first six months, as well as previous industry benchmarks for YouTube on pay-TV, though it said it could not provide numbers.

UPC Hungary’s success in bringing YouTube directly to D4A boxes has broader implications for Liberty Global and the pay-TV industry, said ActiveVideo chief marketing officer Murali Nemani:

  • Liberty Global can quickly use the same virtualization of CPE functionality to bring YouTube to its entire footprint of millions of D4A boxes throughout Europe and Latin America;
  • Other pay-TV operators can break the logjam of device fragmentation to accelerate the availability of new sources of content that provides sustainable differentiation for pay-TV and materially impacts customers;
  • Pay-TV’s own “TV Everywhere” services – most notably HBO GO and Showtime Anytime – can unlock vast new opportunities by combining for the first time the flexibility of the Web with the power of the 10-foot living room experience; and
  • Marquee online video services such as Amazon, Hulu and – of course – Netflix can strike carriage agreements with operators that don’t limit access to a fraction of the pay-TV customer base, but rather open the gates to entire footprints of existing cable STBs.

“Maybe all of this can be done using high-end STBs,” said Murali in a blog post, “but here’s my two cents: such an approach would take years to achieve critical mass, would cost orders of magnitude more than a cloud-based platform and never would be able to provide the win-win of access to millions of STBs for online video providers and a limitless supply of new video content for pay-TV.”