Ray Milius and his team are responsible for engineering matters at Starz. Starz is not among the largest programmers, but it frequently is among the first programmers to adopt new technologies. For example, in 2008, the company was among the first to embark on the transition from MPEG-2 to MPEG-4.

More recently, Ray and his team got Starz into TV Everywhere with its Encore and MoviePlex On Demand And Play services.

On the occasion of his recent promotion, Milius took some time out for an extended chat about the technological path Starz has traveled, some of the technological challenges of program distribution, the intersection of technological feasibility and business issues, and speculation on what one of the Next Big Problems might be.

CED: In 2008, Starz was among the first programmers to move from MPEG-2 to MPEG-4. Five years later, the new H.265 (aka HEVC) standards have been ratified. How much of a challenge was the MPEG transition?

Milius: It was timed around our expansion on the HD side. Our first two HD services were launched on MPEG-2 – much like the rest of the universe. And when we went to expand HD and add more channels, we looked at compression as a way to reduce bandwidth to make that happen. We were adding HD services, so there wasn’t a huge installed base of receivers.

The problem you get into with HEVC is the installed base. In order to get to that compression, which would help us with transponder bandwidth, we’d have to replace receivers. It’s easier for us to do when launching a new service because there aren’t a lot of receivers out there. When a cable affiliate launches a channel, it’s a new installation, versus going back to 4,000 headends and replacing all of those receivers.

For us, the bandwidth on the satellite is valuable to us, and for storage and a lot of other reasons, it’s a good solution to go to something like HEVC. The issue is the cost of converting all those receivers in the field.

We had an advantage when we went to MPEG-4: The two HD channels we had were not so widely distributed at the time, so that we were able to replace those receivers at not too great a cost.

Look at satellite usage at different programmers such as HBO; they’ll retain several transponders they’re using for MPEG-2 HD, even though they’ve converted everything else to MPEG-4. I don’t know the reason for that, but I suspect it’s because of the large installed based on the MPEG-2 service, and it would be cost-prohibitive to change it over on the receiver side.

CED: What would encourage the move to advanced compression such as HEVC? Would the adoption of Ultra HD (aka 4K) television sets do it?

Milius: 4K is a good example, and I think workable. If we were to launch a 4K linear channel, it would be a new service. That would mean providing new receivers, which would be relatively inexpensive. Trying to convert channels would get kind of expensive.

There’s a lot of discussion about whether 4K will really take off or whether it will be more like 3-D. I think TV manufacturers will have to go there. Over time, the TV costs will come down. Whether viewers will shell out money for it is a good question. Certainly, they’re not going to sell a lot of $20,000 and $30,000 range.

The other thing with HEVC – there’s the royalties aspect of it. That was a big issue with MPEG-4. It’ll be interesting to see if the same kind of thing comes out with HEVC. It’s still kind of early, and nobody really knows what’s going to happen. You’ve got a lot of people who own pieces of it.

With MPEG-4, they had a patent pool and MPEG-LA – the licensing body. But in the case of MPEG-4, it changed from being a per-box license to an annuity sort of thing, and I think that may have impacted the rollout of MPEG-4 initially because the terms were somewhat distasteful to some distributors. It didn’t really affect us, because of the way the licensing went. We’re certainly going to be watching what happens with HEVC because it could, in the future.

And it’s also scary when you get something like MPEG-4, when there is a large group of patent holders, but then there are some people who don’t join the pool, and then you still have to license with several different organizations, and it gets cumbersome. It remains to be seen if the HEVC boys will follow the same path.

CED: Will distributing 4K video be any more difficult?

Milius: Because of bandwidth to home, it can be. At CES, Netflix announced it would be doing some 4K content and announced a partnership with Samsung. It’ll be interesting to see how well they pull that off because the problem with your bandwidth on the Internet is that it’s not consistent, so your experience can vary from good to bad depending on what happens.

Frankly, I’m impressed with how good the quality has become over the Internet. We’re doing a lot of tricks with adaptive bit rate (ABR) that make it acceptable to the viewer, but it’s still not as good an experience as you can get from your traditional cable or satellite provider. So there’s a question if it will be as good with 4K.

With what I’ve seen of HEVC, the potential is certainly there – at some point. I’m not sure it’s there today.

CED: With experience with TV Everywhere thus far, what has Starz learned thus far?

Milius: With the authentication model, we’ve rolled that out relatively recently. We’ve got Starz Play, Encore Play and MoviePlex Play products out. We’re out on DirecTV, AT&T and Cox, with a few more coming.

You can get our stuff over Xfinity, just not on our app yet; we anticipate Comcast coming.

We’ve found with the platforms we’re on, it gets some pretty good usage. We launched “Spartacus” a couple weeks ago; we got a lot of sampling in the online space, a lot more than we expected. We’re very pleased with the way that went. Today we’re on the iPad and the iPhone, and stay tuned for the others because we’re getting close.

CED: It’s common for companies to start with one set of platforms and then add others. How much of that is technology, and how much business?

Milius: It’s a little of both. In general, we’re ready to go with the launch prior to the business getting resolved. I don’t think we’re different from anyone else in this space in that regard.

There’s an issue with the Android stuff in the sense that you have a lot of people that have tweaked that platform for their own devices, so it’s a little more difficult to implement than the iOS devices because they’re all from one company.

The same thing on the Smart TV side. You have a lot of manufacturers with connected TVs, and while it’s attractive to be on a connected TV device, it’s prohibitive for people like us – who are not exactly the biggest networks in the world – to fund development for a lot of different custom setups. I think over time, if the TV manufacturers get their act together and get a little more consistency with the way they implement the online stuff, I think you’ll find more and more stuff available.

CED: Is there a path toward standardizing?

Milius: Several of the manufacturers were trying to find some common ground. It would certainly be nice for those of us who have to develop apps if it were that way.

It’s an issue in that there are a lot of different flavors out there, and different manufacturers will choose one that’s incompatible with us in a business sense. We can implement different kinds of technology for that, but we have to utilize something that’s been approved by the motion picture studios, and sometimes they’re a little slow to approve certain DRMs. We’re limited in the ones we can use. It’s not a huge limitation – we’re all complying with the studios; they recognize they have to get their content out there. We can deal with that in time. But sometimes when someone comes out with the latest greatest DRM, we’re limited by what the studios will allow.

CED: What’s been Starz’s experience with CDNs?

Milius: We’re using Akamai. We’re using adaptive bit rate for distribution on our Play platform. Most companies are doing that now. It takes a lot of the sting out of the bandwidth issues on the Internet bandwidth into the home.

It all depends on the partner. For example, Netflix does all of their own encoding of their ABR files, as does Comcast. We give them a mezzanine file, a very high-bit-rate file, which they then take and convert into adaptive files for their streaming files. They all have their own flavor of how they want to do an ABR file, all to save bandwidth on their side. So we provide the mezzanine, and they take it from there.

For others that don’t want to go through that pain or that work – that’s one of the reasons behind Starz Play – it provides an opportunity for those affiliates’ subscribers to get Internet delivery of that content without having the affiliate go through the process of creating all their own files.

It’s easier today than it was a couple of years ago. Today, generally we can get the folks to accept the mezzanine files pretty close to the ones we use in-house, or even the same ones, which makes it easier for us. Go back four or five years, we were producing 25 different formats of files, and that was a nightmare. There’s been some stabilization in that regard. We’re now able to produce a smaller variety of file types than we’ve had to do in the past, which is helpful for us operationally.

CED: So distributors are converging on a smaller number of formats?

Milius: I believe they do it for the same reason we were happy to change. They were in a different situation – they were getting files from 100 different programmers, and, of course, everyone has their own flavor, and that quickly becomes a nightmare, having to deal with all that. I think going to a mezzanine-type process benefits everyone in the same way. You control the distribution on your side, and where you can build in some efficiencies, you can, and at the same time, you’re reducing the complexity coming in. For us, it reduces complexity on the distribution side; for the DirecTVs and Comcasts of the world, it reduces complexity on the incoming side.

There is no universal standard. It would be nice if there was, but it’s better than it was several years ago.

CED: Are things trending toward some common formats?

Milius: It depends on whether you’re talking about the video format or the metadata. We’re seeing more of a variety in the metadata people are using, and the fields they want added in. There’s still a lot of complexity in the metadata world.

Everybody kind of does their own flavor a little bit. This metadata stuff grew out of the original CableLabs VOD program. But some affiliates want additional fields for their own internal use that other affiliates don’t, particularly when you get into the differences between a traditional cable operator and a telco, and that has to do with the systems they’ve built in-house to handle distribution of their content.

CED: Is there movement toward standardization in metadata?

Milius: That’s an issue we have – and there are several attempts to fix it – and that’s to create a common ID for all content. Another is underway right now that CableLabs has been behind, and a lot of people have joined on. To my knowledge, Rovi’s a partner, but Tribune isn’t, and that’s a problem because if you can’t get those guys to sing together, it’s not going to work real well. They use different IDs, and that adds complexity.

[The reference is to the Entertainment Identifier Registry (EIDR).] 

The other thing that worries me, that I think will be an issue for all of the programmers and cable operators going down the road, is when does SD go away? Cable networks have satellite agreements and deals that will expire in the next six to seven years, and we have to think about what we want to do because it takes a long time to get a satellite built and into orbit. The satellite guys need to know how many channels we’re going to have, and that’s a difficult question to answer because nobody knows how long SD will have legs.

DirecTV, for example, thought they might be totally HD by 2016, and not have SD anymore. My ears pricked up on that one, because that’s a question I’ve been wrestling with. SD is still pretty well-entrenched – we have 33 SD channels and only 13 HDs. There’s going to be some interesting changes that are going to have to take place.

I’m just speculating – asking the question. It will be a topic of discussion within the next three or four years.

CED: In six or seven years, we might have 100 GigE on backbones: Might faster, higher-capacity networks address the problem by encouraging migration from satellite delivery to terrestrial delivery?

Milius: Most of our on-demand content that is not traditional cable – in fact, all of our online content has been distributed by terrestrial means today. Satellite is not going to go away anytime soon. Here at Starz, we’re hitting about 4,000 headends, and you just can’t do that cheaply with fiber, particularly because of the last mile.

You are going to see more and more distribution over terrestrial, just because it is cheap and easy. We can distribute all online content via Aspera technology over the Internet very efficiently.

But the problem with doing linear channels terrestrially is a reliability issue. We’ve had more issues with fiber going down and fiber cuts than we have with satellite outages. Satellite has been very reliable for us.

We do have some direct fiber links with some of our major affiliates, and we do deliver a stream at a higher bit rate than we do via satellite, so that when they compress it, it’s at a higher quality to give to their viewers. So we do have a couple large affiliates we’re delivering terrestrially, but in those cases, satellite is still the backup. With everyone else, satellite is still the best way to go.

The other thing is 3-D. …

CED: I thought that was dead.

Milius: It’s not a big part of our life. We are still providing some 3-D on-demand product. It’s a small selection, maybe three or four titles a month. Mostly Disney kid stuff – “Cars” and that sort of thing – and it does get a lot of play with the kid set, but other than that, it’s not a big thing for us, it’s not a future direction. It’s a sub-category of on-demand.

CED: What do you watch?

Milius: I watch a lot of our channels. I watch “NCIS.” I watch “The Big Bang Theory.” I don’t spend a lot of time watching TV other than our own stuff, but that’s because if we have an outage, it’s my ass on the line.