Aterlo's CEO: "The idea is to charge a monthly subscription fee"

Following my post on Aterlo Networks  ("Ex-Sandvine Team NightShifts Netflix for Satellite Subscribers" - here) earlier this week, I had a short Q&A session with Gerrit Nagelhout, Atelo's CEO [pictured]. The first thing I learned is that Gerrit spent several years at Sandvine's R&D center in Israel (here), but more-importantly - much more on Aterlo's plans.

Gerrit started with the observations led to the starting Aterlo: 

When we left Sandvine, we set out to solve the problem of peak congestion caused by streaming media in the access network. We felt this was a space that didn't have enough focus yet. This is an issue for any network, but in particular the rural ISPs (satellite , fixed wireless and some DSL) are struggling to deliver a good Streaming Video experience. Being a startup we had to focus and choose one area so we started out with Netflix. 

Q: I understand that Aterlo targets service providers (here) as a market, rather than the consumers.

A: With our Sandvine background, we originally fully intended to sell directly to service providers. Although we are in talks with a number of them now, we actually started with the end consumers. As you probably know, selling to service providers can take time. We were looking for a way to bring our first version of the product to market as fast as possible in order to gauge interest and get valuable product feedback. We figured that from there we would see what would happen. Either continue to sell to end consumers and/or attract the attention of service providers and start working directly with them. In some cases it would even make sense to integrate our technology with their existing home gateways.

On the consumer front, many satellite internet providers structure their plans to have either unlimited/free or additional bytes available at night. These people typically can't use Netflix at all (or if they do only at very low quality levels and in great moderation). This was a perfect starting point for NightShift. We posted on a couple of ISP forums and got our first batch of beta customers this way. Somebody with free nights can now basically watch an unlimited amount of Netflix, while not causing the ISP any congestion issues as its all downloaded off peak. Actually it makes it better for the ISP even in this case for those that did use some Netflix during the peak already.

Q: What is the business model?
   

A; In terms of the end consumer business model, the idea is to charge a monthly subscription fee (something less than Netflix itself). NightShift currently supports various ASUS routers (pretty much anything running asuswrt with a USB port). We expect to expand upon this in the future. Part of our software runs on the router, and part of it in our cloud service (hence the monthly subscription). For now, consumers buy an ASUS router and a USB Flash Drive (typically 64GB), download our software onto the Flash drive, put it into the router and it automatically installs from there.

Q: What are the other benefits to the carrier?

A: At this point, NightShift is in beta and deployed at end consumers of a number of different service providers. We are now also in talks directly with a number of carriers. The benefits to the carriers are

• Reduction in peak bandwidth leading the less congestion and/or ability to add more subscribers to typically constrained capacity networks such as satellite
   
• Reduced churn in subscribers (or even additional subscribers)
   
• Potential value add packages they can sell to their subscribers while using off-peak bandwidth that is already available. 

Q: How do you select the content to cache? 

A: There are a couple of different models for selecting the content. NightShift automatically downloads subsequent episodes in TV shows when one episode is watched. This doesn't require any consumer interaction and is a great to way to automatically offload peak bandwidth. About 70% of Netflix is in the form of TV shows. 

For those consumers that want to download all Netflix at night (we are getting this a lot right now), we have provided a mechanism to schedule movies. That is currently done by watching the first few seconds of the movie from their Netflix player in order to provide a hint to NightShift. We are looking at other options for this in the future.

We do not break the Netflix DRM, you need an active Netflix subscription and internet connection to be able to use NightShift. NightShift stores the content in the same encrypted way that a network level cache would.  Because of this we think this is a good thing for content providers such as Netfix also as it will result in additional subscribers and improved QoS for them.