Aterlo Networks Deployed by Wireless Nation (ANZ); Offers Subscriptions

Last December I presented Aterlo Networks (see "Ex-Sandvine Team NightShifts Netflix for Satellite Subscribers" - here) and interviewed the CEO, Gerrit Nagelhout (here).

Aterlo NightShift Solution 

Since then, Aterlo made a nice progress, partnering with an ISP to deploy its technology in Oceania and offering its service directly to consumers:

• Wireless Nation, an ISP from New Zealand, is using Aterlo's Nightshift technology
  
  "New Zealand and Australian Netflix users can now save time, money and their data allowances .. Wireless Nation’s technical director, Tom Linn says he’s pleased to be able to offer this easy solution to customers frustrated with slow internet speeds due to congestion at peak times .. For Wireless Nation’s rural customers, this is a great saver because they can pre-load Netflix shows and movies at night, using their free off peak data .. NightShift comes in the form of a dual-band router that plugs into the back of your current router. The NightShift technology is installed into the router so it’s ready to use from the moment you get it"
  
  See "Streaming Netflix in NZ Just got Much Easier" - here. 

• The company is moving forward with its plan to offer paid subscriptions to consumers ('The idea is to charge a monthly subscription fee" - here) and launched a new site for direct sale to consumers. The service is priced at $9.99/month, and ooffered now, for a limited time, at $6.99. 

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.

Ex-Sandvine Team NightShifts Netflix for Satellite Subscribers

A recent study from Sandvine (here) finds that "Netflix continues to dominate North American networks, accounting for 34.9% of downstream traffic in the peak evening hours" and even "On a fixed network in Australasia, where Netflix isn’t even available yet, approximately 2.5% of subscribers are accessing the service and it comprises as much as 4% of peak downstream traffic".

So everybody loves Netflix, but not all enjoy the internet connectivity allowing them to stream the movies and TV episodes with the expected QoE.

Aterlo Networks, a new start-up, led by ex-Sandvine employees ("Before starting Aterlo Networks Inc, our team worked together for years defining, building, architecting and managing mission-critical products which were deployed in some of the largest Internet Service Providers in the world" - here) changes that by adding a "local cache" to the home router. 

"NightShift runs on your compatible home router with a connected USB flash drive. It seamlessly works with existing Netflix players. It analyzes your viewing patterns and predicts content to automatically download at night. Once a TV show or movie is downloaded, you can watch it from any Netflix player in your home the same way you always do. NightShift creates a temporary local copy of video content. It does not break or bypass DRM, and an Internet connection is still required".

Of course, with the presence of the software at the subscriber's access point, a lot more can be achieved, including QoE measurements, and other features to the ISP (Aterlo positions itself as a service provider solution (here). A sure challenge would be the distribution of the software to the mass market.

An example is the satellite broadband service - "These subscribers have very limited day-time plans (15 – 25GB / month). They typically have either unlimited nights or additional usage that can only be used at night". Aterlo beta test (at Exede) showed that "In a typical night, and depending on Satellite Beam congestion, NightShift has been able to download up to 15GB of Netflix ready to watch the next day. Depending on playback quality settings, this equates to up to 5 hours of High Definition or over 20 hours of Standard Definition content".