Canal Satellite, the French satellite pay-TV operator, is raising the stakes in the personal video recorder (VCR) arena by deploying Pilotime, a next-generation set-top box (STB) designed by Thomson, with technology provided by Canal+ Technologies. The box features Canal+ Technologies’ MediaHighway Advanced middleware, which combines a multimedia home platform stack, with an HTML engine and a PVR module. It is one of the first digital STBs compatible with the new international DVB-MHP standard.

The device will enable viewers to record and store programming at the same time they are using other interactive applications and watching other programmes. The box has an 80 gigabytes hard drive, which is the equivalent to around 40 hours of programming.

For Canal Satellite, the commercial deployment of Pilotime marks an aggressive push into the PVR arena. Jean-Louis Erneux, senior vice president of international communications at Canal+ Group, told Interspace’s sister publication Inside Digital TV that the operator has already ordered 60,000 boxes from Thomson. The operator has around 2 million digital subscribers in France and hopes to entice 15 per cent of its subscribers into using Pilotime, which would be 300,000 subscribers.

The key question is whether Canal Satellite will have more success with Pilotime than BSkyB has had with Sky+ in the UK. Canal Satellite will adopt a different pricing model to begin with and base their strategy on a rental model. So, customers would have to pay an extra 28 euros on top of their initial subscription, although there would be an additional deposit and remote control costs. Nevertheless, the costs are significantly lower than anything seen before. In the UK, BSkyB subscribers have to pay for the box outright, and then a monthly subscription charge for the service.

Faster Penetration

Canal+ Technologies CEO Francois Carayol outlined the reasons why he thinks Pilotime will be a success in France. He exclusively told Interspace: “We believe that our product will have a faster penetration than the Sky+ box. These boxes have more power than any others that have been produced. Conceptually, what Sky has done is add PVR function to the current generation of the STB. We have a Java virtual machine, an HTML browser so the functionality, power and ease-of-use means there is at least a generation’s difference between the two boxes.”

The move by Canal Satellite is a bold one and the operator hopes to pile the pressure on its DTH satellite rival TPS, as well as cable operators in France.

For Canal+ Technologies and Thomson, with the deal with Canal Satellite in the bag, the challenge will to do further deals with other pay-TV operators around the world. In terms of other future PVR deals, Carayol said: “We have 20 operators, which are our customers. They have all been presented with the box and seen its development. We are having ongoing discussions with the some of our most important customers. We certainly hope to have other operators making a decision to launch this product before the end of the year. This is not necessarily just about Europe. If we have one or two operators on top of Canal Satellite making a decision before year-end, we would be happy.”

The box initially will not start a whole host of interactive applications. Most of the interactive applications currently available on the current Canal Satellite STBs won’t be available on Pilotime. Yet, Carayol believes it won’t take long for the new box to quickly catch up. “A large portion of those (interactive applications) have been developed by the channel themselves and are not controlled by the operator. So, we have ongoing discussions about whether they want to put the previous applications on to the new boxes. They are interested to do it, but obviously they didn’t want to do it before the box was launched. They want to it once a significant number of boxes have been deployed, even though it is a very small investment for them.”

He continues: “It is only a matter of weeks and days of putting the applications on the new box. Using Java and HTML, you have so much power and operating power to develop services and applications, it isn’t really an issue.”

Other Deals For Pilotime

While Thomson hopes to do other deals, Carayol admits that despite the power and impressive functionality of the box, this could prove difficult. A number of pay-TV operators are not flush with cash. With the PVR arena not awash with success stories, it may be difficult to get others to follow Canal Satellite’s lead. Carayol added: “The market is not what it was two years ago in the sense [the pay-TV operators] have to think even more carefully when they make a significant investment like this, they will have a swift return on it. We will believe that the product will provide a very good [return on investment] but they have to be convinced by it.”

The Pilotime project also gives an indication of the direction that Thomson wants to take and the importance of its acquisition of Canal+ Technologies. Carayol believes morale at Canal+ Technologies has improved since leaving the troubled Vivendi Universal Group to go under the Thomson umbrella. On this issue, he says: “We now have a shareholder that has a very clear, long-term strategy. There is now much better morale amongst the people and efficiency. It is clear that Thomson is establishing its strategy to be one of the leaders of what they call ‘the video chain.’ They felt that having both the middleware and conditional access was the perfect glue within their strategy of working with those large service operators.”

Carayol also told Interspace that the Canal+ Technologies hopes to be profitable and to have a very significant positive cashflow this year. “This is not something trivial given the state of the market and the level of competition. We are on target for this so far at the end of the first quarter,” notes Carayol. It could also take part in industry consolidation. “We have agreed with our shareholders that we want to participate in industry consolidation. If opportunities arrive, we want to be a player,” he says.

–Mark Holmes

(Contact: Marie-Vincente Pasdeloup, Canal+ Technologies, e:mail: [email protected])