We have recently interviewed Richard Smith, a seasoned industry expert and entrepreneur with a passion for innovation in the field of set-top boxes (STBs) and broadcast technology.  In this interview, we delve into his insights and experiences.
We hope you find this conversation as enlightening and inspiring as we did.

Thank you for accepting my request to better understand the STB business Richard. Could you please introduce yourself and your company, EKT?

My name is Richard Smith, and I am the co-owner and founder of EKT. I was born in the UK but spent the first 15 years of my life in Southern Africa. I returned to the UK to complete high school and pursue a degree in production engineering. In 1992, I joined a UK-based company specializing in set-top boxes and LNBs. My entire professional life has revolved around set-top boxes and this industry.
In 1999, I relocated to China and lived there for over 20 years. In 2007, I founded EKT, so we are 16 years old and employ around 100 people.
The key challenge for EKT has always been finding a unique position in an extremely competitive and crowded market. Our approach was to blend the strengths of both Eastern and Western practices: Western emphasis on communication, project management, language-oriented software development, and quality, combined with Eastern advantages in time-to-market, hardware design, manufacturing, and cost-efficiency. This strategy allowed us to establish our presence in the market, and it remains consistent in our ongoing SkyFlow project with EasyBroadcast, which introduces a new concept -- native IP in an end-to-end offering.

Now, let's delve into the SkyFlow project. Could you provide a brief explanation of the project, its future plans, and EKT's role in it?

SkyFlow is a collaborative effort involving four like-minded, enthusiastic companies. The project's success is attributed to our shared enthusiasm for innovation and the belief that demonstrating technology is the best way to sell it. Each member contributes a crucial aspect to the project: EasyBroadcast manages content preparation and metadata, Quadrille or Broadpeak convert multiple unicast  streams and files into a single multicast stream, ST/I-Direct adds DVB-S2X modulation for satellite transmission and encapsulates the mABR stream with GSE-HEM, and EKT, as the fourth partner, receives the signal, removes the GSE-HEM encapsulation to expose the unicast channels, and delivers content to TVs or mobile devices with the EasyBroadcast app. The project aims to provide an end-to-end experience, demonstrating this technology, which is quite unique. We have invested significant time in developing and refining the software to ensure seamless operation. As we expand into the mass market, especially DTH (Direct-to-Home) for paid content delivery, our next step is to enhance security throughout the end-to-end solution. We are currently collaborating with EasyDRM to achieve this.

How has the traditional set-top box (STB) evolved over the years, and what are the current economic and supply chain challenges in this industry?

In many ways, the traditional STB has not evolved. The traditional STB started in the 70s with the first analog cable and satellite TV, and if we consider a STB is a device to receiving multicast video and sending it to a connected TV, it is essentially still the same. The difference is that the multicast video has evolved from analog to digital, SD to HD, HD to 4K and the transmission technology has improved from analog to DVB-S to DVB-S2X. However, the fundamental concept of receiving a multicast signal and displaying it on a single TV in the living room, has remained unchanged.

Regarding economics, there has been a significant shift. Before, approximately 90% of the set-top box cost was attributed to hardware development, driven by complex hardware and expensive components. In contrast, software development accounted for only 10% of the cost with basically just a simple UI. Today, the landscape has reversed, with 90% of the cost associated with software development and 10% with hardware. Except now, customers do not see the value in the software because companies like Google with their Android middleware and Widevine DRM have offer this for “free”. So, setting a fair pricing model for the STB becomes extremely difficult. 
Another challenge is supply-chain related, especially during the COVID-19 pandemic. Our reliance on China for hardware and components was exposed when various disruptions occurred, including temporary factory closures, shutdowns at component factories, and port closures. These events had a significant impact on our operations. To mitigate such risks, now we are diversifying our supply chain by establishing manufacturing facilities in Poland and Turkey.

You offer a range of different products. Now, let's categorize your set-top box products by industry and discuss regional variations in suitability.

Set-top box products can be broadly categorized into two types: unconnected (unidirectional) and connected (bidirectional).

Unconnected (Zappers):

• These boxes lack a return channel, Wi-Fi, or the ability to send a signal back to the headend.
• Typically, they are priced at less than $20, and still form a big market segment for us as the reality is that there are large areas of Africa, Mexico and South America, which will not have affordable broadband for many years to come.

Connected (Bidirectional):

• These boxes have a return channel to the headend, enabling requests to be sent back.
• They are all about software and integration with 3rd party software and has basically become a battle between Google’s Android OS and open-source Linux, such as RDK. EKT fundamentally believes that Android is bad for the industry and so we have chosen to work with RDK.

What role do set-top boxes play in the businesses of Mobile Network Operators (MNOs) and satellite operators? How are these devices distributed and financed? Do you foresee OTT players distributing their own devices?

This is not an easy question to answer as there are multiple possibilities.
The role of set-top boxes in MNOs and satellite operators' businesses varies based on their specific strategies and goals. Most traditional operators, with a managed network, offering a linear TV service, and these will be the companies you are familiar with, such as Canal +, SKY, Liberty Global, take a position that they want to have:

• a direct relationship with their customers and a managed relationship with them, where they can control the user experience,
• the user’s data
• the way advertising is pushed to their customers and who makes money from it.
  Typically, these operators will purchase STB and then distribute them to their customers through contractual agreements of some kind.
  Once we move to OTT, where the reach of OTT programming extends far beyond the limits of the managed network, and may even cross international borders, the distribution of managed STBs becomes more complicated. We observe a shift towards utilizing the retail chain and, notably, downloadable apps to facilitate this distribution process. Developing an OTT app may initially seem more cost-effective, but, in reality, it presents significant challenges.:
• The number of devices you need to support (phones, tablets, TV etc.) is huge. Not only do you need to get all of these apps approved on the various application stores, and the TV brands, which can be costly, but then you have to support them when the OS of those devices is updated.
• You will never be able to cover all TVs and devices. Some households will not have a smart TV
• Watching premium sports on a mobile device, is not preferred. A TV still gives the best viewing experience. So, if the TV does not support an app, then a STB is required.
• You have no control over how the App is positioned in the TV/OS UI and whether or not it will be in a prominent position.
• You are relying on a 3rd party billing system
• You give away all your customers user data.

Finally, what trends are shaping the set-top box market, and what is your vision for the future of set-top boxes in a changing landscape of viewing behavior, with increasing app-based experiences on smart TVs, streaming devices, and mobile devices?

The set-top box market has seen a transition from traditional multicast STBs to a landscape that includes OTT services and a desire for multi-device viewing at one's convenience. However, if we look at the delivery platform options, cable and satellite have faced challenges in keeping pace with IP as a delivery platform, because cable and satellite are fundamentally multicast.
Tier 1 operators often prefer managed set-top boxes, as they allow for a consistent and controlled user experience. Despite the rise of OTT, there is no evidence of declining demand for traditional STBs, particularly unidirectional ones, which lack OTT capabilities. Affordable broadband availability and the customers’ ability to pay for connected STBs with advanced features remains a challenge I many developing regions.
The future of set-top boxes will likely involve coexistence with app-based experiences on various devices, with traditional STBs continuing to serve a prominent role in many households. The diverse viewing experience will accommodate a range of preferences, and set-top boxes will remain relevant, especially for delivering a superior living room experience.

Peru hükümeti, ülkede internet erişiminin kısıtlı olduğu kırsal kesimlerinde Peru halkının daha önce erişmekte zorlandığı eğitim ve kamu dahil olmak üzere OTT video ve evrak  erişimini sağlamak için SKYflow ekosistemi ile sözleşme imzaladı.

Coronavirus pandemisi, küresel düzeyde sağlıktan ekonomiye kadar birçok farklı alanı etkilerken, uzaktan eğitime erişimin önemini de vurguladı. Dünyanın birçok yerinde altyapı ve erişimin kısıtlı olduğu kırsal bölgelerde yaşayan öğrenciler gerekli imkânlara tam anlamıyla sahip olmadığı için uzaktan eğitime ulaşamadı. Bugün dahi Peru’da TV kanalları evlerin yalnızca yaklaşık %30'una ulaşabiliyor.  Peru hükümeti bunu değiştirmek icin kapsama alanı genişletme sözü verdi.

SKYflow, özellikle internet erişimi olmayan ya da kısıtlı olan, ancak televizyon, tablet ve hatta akıllı cihazlara sahip hanelere çok ekranlı bir ortamda içerik dağıtımını sağlayan,  uygun maliyetli, ultra hızlı, düşük gecikmeli son teknoloji bir ABR (Uyarlanabilir Bit Hızı) ekosistemdir. SKYflow ekosistemi ile Peru nüfusunun tamamı dijital televizyon (DTV), kaydedilen ve gerçek zamanlı yayınlanan içeriklere kolaylıkla erişebilecek; çift yönlü yayın sağlama özelliği sayesinde gelecekte Peru hükümetinin kullanabileceği kullanım alanlarını da genişletecek.

SKYflow ekosistemi, EasyBroadcast, EKT, Quadrille ve ST Engineering iDirect gibi uydu tabanlı OTT sunumuna öncülük eden bir grup şirketin teknolojilerini içeriyor.

Don’t overlook the importance of subscription models to monetize your content and services when launching your OTT service. In today’s crowded and ever-changing media landscape, it is a prerequisite to experiment with different approaches to succeed. In the first of our interview series, we had the pleasure of interviewing Ludovic Bostral to address the role of subscription models in the fiercely competitive streaming video market.

A learner, a wanderer, a creator. By all accounts, Ludovic Bostral is someone who wears many hats!
His journey in information technology started with the Amstrad CPC 6126 computer back in 1987, but did not end just there. Drawn more and more to the world of pop culture and video, he began working at M6 Video, perfecting their product development as their R&D manager.
His profound interest in video-on-demand and subscription based services culminated in Afrostream, “the African Netflix," but this adventure ended by 2017. Looking for what he should tackle next, Kessel was born — a space where authors can exercise freedom of expression while speaking directly to their readers, generating income without the constraints of economic pressure and proliferating clickbait. As someone who strives to explore, share and communicate, Ludovic has worked at Kessel since 2021, helping it become a haven somewhere between traditional media, publishing houses and social networks.

• Thank you for joining us in this interview series. We’d like to begin with looking at various billing systems. What new payment methods are driving the OTT video market?

There are three payment options nowadays: firstly, credit card payments via Stripe or Adyen, a structured method many companies adopt. The second is mobile payment offered by telco operators, allowing anyone with a SIM card to make payments without submitting banking credentials or a credit card. It is only widely used in Africa (in countries like Kenya and Nigeria); while in theory, it can be applicable in many continents, mobile billing is not encouraged by mobile operators, especially in Europe.
Lastly,  cryptocurrency-based payment: a refreshing, new approach; in my opinion, the future of payment technology. What makes it so interesting is this option enables to build of token-based communities. The consumer can access an array of additional content related to the main content, such as digital collectibles, podcasts, and documentaries: and in some cases, interact with the producer. An example would be the French startup Uncut. Creators can create tokens (each containing special or additional content) and sell them to the public. It helps creators claim ownership and connect directly with the consumers, which is crucial for many reasons.
Again, this is a method just springing up (that is hard to implement for the moment), but I can see it becoming a prominent topic in the upcoming years.

• What changes/ updates do you expect to see in OTT content monetization?

The way we consume content is rapidly changing. Just the content itself is not and will not be enough to entice customers or keep the already existing ones interested. One must outside the box, offer additional content that will liven up the audience, keep them interested and engaged. For example, Sorare -a company focusing on digital collectibles around football- has a compelling model. Their method revolves around 'Blockchain' where one can buy, sell, trade, and compete for prizes with digital player cards, which provides a deeper digital experience around the main content rather than consuming it passively. It is just one way creators can add value to the subscription.

• OTT video subscriptions have infinite pricing options. How important are subscription/payment methods to garner a large subscriber base?

I cannot understate the importance of choosing the correct method. With so many options, customers will turn to other services even with the slightest inconvenience. In a nutshell: simplify the flow, and make sure it is smooth, straightforward, and tailored to the need of your customers. So, avoid any method that would get the subscribers to dwell for a long time to complete the process that should not be more than three steps (maximum).

• Can you recount a challenge you faced while working on the payment part of the streaming service operation?

The difficulty, for the most part, is managing OTT churn with failed payments. It happens due to insufficient funds, stolen or lost credit cards, or the customer forgetting to update an expired payment method. Back in 2015, when I worked on this part of the service, it was a daily occurrence for us to handle OTT churn caused by the issues outlined, as the third-party payment solutions to get the updated bank information was not widely used. Nowadays, banks have the API to provide new banking information needed to update the payment method.

• Thank you for sharing that with us! Let’s talk about creating a secure infrastructure. What are some key points to consider when it comes to building a reliable payment system?

Payment security is a complex issue, as the regulations are strict. The shortcut would be to choose a reliable third-party platform (like Stripe or Adyem) that respects all the security aspects by complying with the norms (such as RGPD). For example, the banking information is to be secured by a third-party platform. No one should have access to it. Whichever third-party you see fit, local or global third-party payment processor for your streaming platform, it would be beneficial to first and foremost make sure they comply with the regulations for the safety of your viewers.

However, for the platforms that adopt the mobile payment method, the situation is less complicated, as it does not involve many different actors for the operation to complete.

• Lastly, what are your thoughts on Netflix's ad-supported tier?

I, personally, am not a fan of this method. I think ads disrupt the customer experience; if one pays to access content, it is only fair that the platform does not monetize the viewing experience. As a customer, I pay for streaming services such as Netflix so as not to be bombarded by commercials while viewing content. Another move could have been to provide a method to split the payment with friends or provide a mobile-only plan (an option offered only in Africa for now) that costs less than its regular plan.


This was truly meaningful! Thank you, Ludovic, for sharing your vision, time, and expertise with us!