Some Broadcasters 'Love' Evoca, Others 'Really Hostile,' Says Edge CEO

Evoca is “getting a lot of great feedback from our end users,” said Achilles. The biggest takeaway is that “everybody loves the video quality, universally,” he said. The service is running “30+” channels, plus 40-50 VOD apps “that we’ve got in the VOD catalog,” he said. Edge still has ambitions to offer 80-100 Evoca channels, he said. "We’re continuing to do the content distribution deals and adding to our bundle."

Edge continues to discount the $49 monthly fee at $20 in Evoca’s “early access program,” said Achilles. “We’ll probably continue to do that through the end of the year.” Achilles rationalizes the discount, though Edge grapples with a customer wait list, because “the content bundle is probably a little skinnier than we want,” he said. “We wanted to make sure that people were happy with what they were paying for the service against what’s available in our bundle.”

Evoca is “aiming to open the floodgates by the end of the year or early next,” when everyone who wants a set-top receiver box can get one, said Achilles. Supply of the box, branded Scout, is “one of our limiting factors,” he said. “We’re building our own box because the devices just aren’t out there.” Edge designed the box, and has “whole hardware and software engineering teams working on it,” he said. They're sourced from “one of the large contract manufacturers” in Malaysia, he said. “We tried building them in the Americas, but there’s no factory capacity.”

Edge “architecturally” designed Evoca as a “3.0+” service, said Achilles. “We’ve got a bunch of stuff on top of it.” The architecture involves “the integration of broadband, the integration of VOD apps, how we do routing back and forth between broadcast and broadband -- kind of more advanced 3.0 stuff that is above and beyond I think the basic 3.0 certification.”

Achilles, who did executive stints managing the mobile device businesses at HTC and T-Mobile, remains “skeptical” that 3.0 receivers belong in smartphones: “The beauty of 3.0 is that it’s so spectrally efficient, because it doesn’t have that great big mobility layer that absorbs so much of the bandwidth that 4G and 5G do.”

The CEO challenges the proposition that 3.0 in a handset “really solves a consumer pain point or a business pain point.” Mobile operators have done pretty well “at ratcheting down the resolution in managing video on phones,” he said. “It’s a 5-inch screen, so there’s only so much you can do anyway.” From Evoca’s perspective, “the biggest pain point is video service in the home,” he said. “There’s less and less competition. Prices continue to rise, particularly in second- and third-tier markets that are just chronically underserved.”

It’s not practical to deliver “a high-resolution signal to a TV over a mobile network,” said Achilles. “It’s blindingly expensive for the mobile operators. The spectrum was never designed for it, and that’s where 3.0 wins.”

On discussions Edge is having with broadcasters to expand the Evoca offering to other secondary or tertiary markets outside Boise, talks involve “a mix between big national broadcasters" and "small locals” with a few transmitters in a single designated market area, he said. Most share the "consensus" that the "traditional broadcast industry is evolving,” and not in a positive way, he said.

As MVPD subscriptions decline, the broadcast advertising and retransmission revenue model "is under more and more pressure every quarter,” said Achilles. Stations are “looking for a different revenue stream, and I think a lot of these people want to roll out the Evoca service on their spectrum,” he said. The Edge team’s “objective is to build the best video service in Boise, then take that and replicate it in lots of markets as quickly as we can across the country,” he said.

Broadcasters are “struggling with the trajectory of the business,” said Achilles. “The old model is under a ton of pressure, and it doesn’t seem to be correcting itself. They’re trying to figure out, what’s the new model that you put on top of this spectrum?” Broadcasters, he said, fall into two camps -- those who are “really excited by what we’re doing, and others who are really hostile.” Some are using “their best efforts to stifle the innovation that we’re bringing, and that’s not good for anybody,” he said.

Achilles thinks the hostility is rooted in the notion that “there’s no clear definition for what we do” with Evoca, he said. “We’re a broadcaster and a set-up manufacturer,” plus an over-the-top video service provider, he said. “That we hold these three things together to create this conditional-access business model -- some broadcasters love it and see the value on their spectrum, and other broadcasters see it as a threat.” Hostilities include “threats to us if we come into another” designated market area, he said.