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The December 13, 2009 Issue Provided by System Dynamics Inc.
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TelcoTV 2009 -- The Changing Face of TV

In November we took time out from our vacation in southwest Florida to attend the TelcoTV Conference in Orlando. TelcoTV is a good place to get a feel for the evolution of IPTV and the evolving aspirations of telcos large and small.

This year, we came away with a better understanding of their aspirations to "lock in" the customer to their full range of triple- and quadruple-play services. We also learned about the rapid evolution of 3D TV, the expanding role of the Broadband Forum, and one approach to providing an easy-to-navigate guide to the rapidly expanding content on the TV set.


Owning the Customer

The TelcoTV Conference is a fascinating mix of giant players like AT&T and little guys like Nsight. Close your eyes during their talks and you'd expect to tell which one is speaking.

Rob Riordan, EVP at Nsight (2nd from left) --> Click for larger pictureWe'll paraphrase a vision from one of them: "We'll be offering both TV services and 3G. .... We want to provide a femtocell in the home, so when you come home from work it recognizes your presence. Your phone interface changes to your in-home view and the movie you selected to download to your phone loads over your home Wi-Fi."

We were startled that this vision came from Rob Riordan, EVP and Director of Corporate Development of Nsight, rather than a company like AT&T. Riordan made clear that he is a fan of providing complete solutions to customers--he said the goal was to "make it very simple and impossible to leave." Holding up his iPhone, he said admiringly "They own me." He was frank in aspiring to have Nsight do the same.

Jeff Weber, VP Video Services, AT&T --> Click for larger pictureBy contrast, the message from Jeff Weber, VP Video Services, AT&T, was TV-centric. He emphasized that "Everything starts with TV" and "You have to be great in TV". Weber talked about U-verse's capability to record 4 streams of video and provide total home DVR. He also mentioned being able to schedule your DVR from your phone or PC and that DVR is included without extra charge in most packages.

The "Any" Theme

Weber also had a "futures" story about "U-verse Everywhere"--AT&T customers will be able to consume and control content on any screen and see related content on any device. Weber believes U-verse is a powerful platform for integrated IP services--75% of U-verse subscribers already have a triple-or quad-play package.

"Any video any device" at RGB --> Click for larger picture"Watch your TV Anywhere" from Echostar --> Click for larger pictureThe "any" theme was repeated in several talks and portrayed in many booths.

Brook Longdon, Head of Global Home Entertainment of Nokia Siemens Networks spoke in terms of an expanded user experience anytime, anywhere, on any device. He distinguished between:

  • Service Convergence: Same services from different sources on different devices (any content, any device)
  • Service Portability: Same services on multiple devices within home network, and Service Mobility: Same services on multiple devices outside home network (any device, anywhere).
  • Session Continuity: You can watch a movie in your house on the TV via IPTV and pick up where you left off on your mobile phone as you leave the house. This implies a common subscription in the set-top box and mobile phone worlds.

All of the above seems premised on the assumption that you have one service provider for your mobile, TV, phone and Internet services.

TV Everywhere -- The Entitlement Enablers

"TV Everywhere" is all about keeping the value in valuable content. Today, video subscribers pay for content, but can consume it only on their TVs in their homes (unless they have a Slingbox type device). With TV Everywhere, video subscribers would be able to access their content not only on the TV in their home, but also over the Internet and via their mobile phones. Underlying the ability to get protected content to authorized users are a wide variety of "entitlement enablers".

Jim Brandt, Director TV/Video at Synacor and Chris Drake, Senior Director of Business Development, thePlatform, spoke about the mechanics of entitlement. Several steps are involved, including securely identifying a user (authentication), mapping the user to what they have access to (authorization), and applying existing policies to these new access rights (entitlement). Ideally this will involve a common and consistent user experience across devices.

Myriad issues arise when attempting to implement TV Everywhere. These include working out licensing deals between service providers, content owners and other rights holders; increased IP video traffic on broadband service providers' networks; and the implications of potential FCC net neutrality rules on the types of deals that video service providers can make with content providers.

Other questions include whether DVR functionality is feasible on any device; whether content is streamed, downloaded, or both; what user intervention is required for authentication and authorization. Content presentation and audio quality need to be adapted to match the capabilities of the end devices and preserve the best end-user experience.

Last, but far from least, is the issue of audience measurement. That metric drives ratings and therefore advertising revenue. If viewing shifts from on-air to online without audience measurement metrics, there will be very negative effects on ad revenue.

Service providers are starting to roll out beta versions of "everywhere" offerings. A few weeks ago Rogers Communications announced the beta release of Rogers On Demand Online. Any customer with a Rogers account can visit rogersondemand.com and register to experience Rogers On Demand Online content free from any streaming Internet connection within Canada.

MSOs are vocal about their support for TV Everywhere, so we hope they have solutions to the many issues the service raises.


3D TV

Title screen for "Avatar" --> Click for larger pictureTelcoTV included a session and several exhibits on 3D TV. The upcoming release of James Cameron's Avatar will be a big deal in focusing attention on this emerging content form.

News releases about 3D come with increasing frequency--for example:

  • Up to 25 of the 2010 FIFA World Cup matches in South Africa will be produced in 3D.
  • Reliance Mediaworks has partnered with In-Three Inc. to set up the world’s largest 2D to 3D conversion facility in India. The project will start in February 2010.
  • LG Display has begun mass production on their Full HD 3D LCD monitor, a 23-inch display with 1080p resolution, with an initial focus on video games.
  • Sony will add 3D capability to its PS3 gaming console via a future firmware update
  • BSkyB has promised to launch a channel devoted to 3D content next year
  • HDlogix had the first public demonstration of their real-time conversion of 2D HD video into 3D this weekend; it will be on view at CES.

Judging from some sessions at Telco TV, lots of issues remain to be resolved. Standards are a key piece of this:

  • Will the glasses ("eyewear") be "passive polarized" or "active shutter"?
  • Is the transmission format one that combines the left and right eye images side by side in a single interlaced frame, or a sequential display of a full frame image for each eye?
  • What format makes the most sense for distribution over existing cable and IPTV infrastructure? Does it take a lot more bandwidth than today's HD? Can it be supported by today's set tops?
  • Which organization will define the standard(s)? Contenders include CEA, SMPTE, DVB, CableLabs, Blu-ray Disc Association, 3D@Home Consortium, etc.

There are also many issues beyond standards:

  • What are the impacts of eye-strain and fatigue, as well as possible unpleasant side effects like nausea?
  • Will shows in 3D be interspersed with 2D commercials?
  • What is the financial justification for the extra expense involved in 3D?

This year's CES promises to be a banner year for trumpeting 3D TV. There will be an Experience 3D TechZone and lots more across the show floor, so we'll watch as this area develops.


The Broadband Forum

Laurie Gonzalez of Broadband Forum --> Click for larger pictureWe met with Laurie Gonzalez, Marketing Director, The Broadband Forum at Telco TV to learn more about the Forum's activities. The mission of the Forum is to "develop multi-service broadband packet networking specifications addressing interoperability, architecture and management."

Our conversation with Laurie focused on their work to avoid duplication of efforts. Laurie explained that the former name "DSL Forum" no longer described their wide scope of activities. Current efforts include liaison with the Home Gateway Initiative for collaboration on the development of standards and specifications for broadband networks worldwide; their working with the Home Grid Forum to develop a certification program for G.Hn; and their union with the IP/MPLS Forum to establish a central body for next generation packet network specifications.

The organization has both technical and marketing initiatives. Laurie's presence at Telco TV was on behalf of the Broadband Forum's Ambassador Working Group, which promotes the Forum's objectives through speaking engagements at industry events.


Orca Interactive: The Guide is King

Once upon a time, a printed weekly magazine called "TV Guide" was the definitive source for information about what content was on what channel at what time. It was summarized in a series of grids, divided by day, time and channel. Most on-screen guides -- both simple scrolling guides and interactive guides -- still follow the old grid model.

Piece by piece, technology has destroyed the underpinnings of that notion of the guide as sufficient to explore the possibilities of what you can view. The DVR and "start over" did away with the notion of a program only being available at a given time. Slingbox undid the notion of "place". VOD, the Internet and the home server did in the notion of "channel".

Haggai Barel, CEO Orca Interactive --> Click for larger pictureWith a plethora of content choices and no more bonds of time, place and channel, providing a great guide is an area that is open for innovation. During a visit at TelcoTV with Haggai Barel, CEO of Orca Interactive, we saw one notion of content discovery that appealed to us. Orca's Compass guide is designed from the start for converged services.

Haggai described Compass as "a content discovery recommendation platform." In a world of so much choice and potential confusion, its purpose is to help you discover what you want to watch. He said the Compass model has a close affinity to that of Amazon, which remembers what you have previously bought and looked at. Like Amazon, it allows you to see other people's opinions and reviews and what people who have bought a certain item have also purchased.

Haggai said that in most people's minds Orca is closely associated with its middleware platform, but Compass can be used along with whatever middleware a service provider is using. Compass is based on Web technology, rather than being client intensive. Their SDK supports both HTML and Flash. It is also operable on multiple set-tops and can be accessed not only on TVs, but also with PCs and mobile phones.

Orca Compass VOD recommendations --> Click for larger pictureTo create its "blended recommendations," Compass assigns different weights to several different recommendation engines, including: most popular, what your friends like (social engine), related videos, operator promotion, your previous viewing patterns and choices, and extensive search functions. The service provider can set the weights to create the blend of various engines. The operator is provided with analytics to decide what the appropriate weights are for their objectives.

Portions of Orca's technology are based on the work of the Israeli next generation personalized video services consortium, called Negev. We liked the intuitive and attractive user interface and the idea that you could find something that truly appealed to YOU with only a few clicks. (There may have been other innovative guides on display, but did not come across them at this show.)


OTT -- Over the Top Video

Amino's new IPTV settop --> Click for larger pictureAmino Communications new IPTV set-top boxes were one of the most interesting items we saw at Telco TV regarding "over the top" (OTT) video. These boxes, powered by Intel's Atom CE4100 media processor, will make it simpler for providers to mix and match video from many sources on the TV screen. Amino said the CE4100 "will enable IPTV STBs to deliver a full open Internet experience." Amino's new box supports HD video, home-theater-quality audio and advanced 3-D graphics.

The market for OTT video continues to attract more entrants. Boxee recently announced a partnership with D-Link to make a settop for browsing Internet videos on TVs. Others include Roku, which can stream Netflix, Amazon and MLB video; game consoles like the Xbox 360 and Sony PlayStation 3; and connected Blu-ray players which can receive Netflix Instant streaming.

( www.att.com ) ( www.nsight.com ) ( www.nokiasiemensnetworks.com ) ( www.synacor.com ) ( www.theplatform.com ) ( www.rogers.com ) ( www.adlabsfilms.com ) ( www.in-three.com ) ( www.lgphilips-lcd.com ) ( www.sony.com ) ( www.sky.com ) ( www.hdlogix.com ) ( www.broadband-forum.org ) ( www.homegatewayinitiative.org ) ( www.homegridforum.org ) ( www.orcainteractive.com ) ( www.negev-initiative.org ) ( www.aminocom.com ) ( www.intel.com ) ( www.boxee.tv ) ( www.d-link.com )