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50 years of TV Advancement Eclipsed in Five

BY RICH TEHRANI

Rich Tehrani

I have to admit that I�ve had mixed emotions about how big a market the IPTV (News - Alert) space will be. In terms of making money, I wasn�t sure this space would make money for service providers or vendors. I thought a swarm of Internet competitors would come onto the scene, like Vonage (News - Alert) has done in the world of telephony. I figured it would be easy for consumers to watch Yahoo! or Google (News - Alert) TV and there would be no need for traditional IPTV from the service provider out to the customer.

At least this was the long term view I had of the market.

Then, the whole network neutrality argument came on the scene and I started to realize that service providers will eventually find a way to build tiered levels of service quality. It just seems inevitable and, furthermore, I am pretty sure the quality of non-enhanced level of Internet service will deteriorate over time allowing only very basic video streaming � it won�t be worthy of the larger screens that are filling a growing number of homes.

Once I realized this is likely, I changed my view on the market. Indeed, I think there is great potential for IPTV.

Still, I am a bit skeptical, as devices already allow Internet video to be watched on a TV screen and building in a nice GUI for the TV is trivial. In addition, a device could incorporate a DVR and record content ahead of time allowing TV to be watched for free. Google and Yahoo! will certainly make this reality going forward.

But, taking off my skeptic�s hat for the moment, let�s focus on the successful rollout of IPTV.

Many people don�t realize that one of the early companies in this space was Microsoft (News - Alert). The company has been dabbling in the TV market for over a decade. When Greg Galitzine asked me if I would focus on IP TV for this issue, I figured it makes sense to touch base with Ed Graczyk, director of marketing and communications for Microsoft TV.

Ed started about by explaining that Microsoft�s view of IPTV is high quality paid television over a next generation network using next generation technology. This network would not run over the open Internet; instead, it would be a managed network and would support hundreds of channels and thousands of on-demand channels. The services that Google might offer they consider to be Internet television. (Boy this reminds me a lot of the IP telephony versus Internet telephony debates of the nineties.)

Ed says the consumer experience will be much better than what they are used to with digital cable and satellite. This may not be such a staggering accomplishment, since cable companies are having a tough time delivering new HD channels over the limited bandwidth lines they have running to consumers� homes.

An excellent USA Today article (www.tmcnet.com/316.1) goes into the details of the challenges cable companies are facing. One of these challenges is that cable companies are still carrying analog channels, which take up lots of bandwidth and, as such, means they have limited room for HD channels. Analog channels, by the way, take up six times more bandwidth than their digital counterparts.

At one point, the USA Today article describes what cable companies are doing to deal with the problem. An easy fix is reducing the number of analog channels, but this has the adverse effect of upsetting customers, who will now need to have set top boxes on all their TVs � even that small TV in the kitchen.

Another solution is to change the way cable companies send TV signals to something called switched digital, which sends channels on an on-demand basis to homes. Currently, cable technology is designed to send every channel to every subscriber residence.

The amazing thing about this new technology is that it is basically emulating how IPTV works. So, even though cable operators have a twenty year head start, HD programming has put them at a disadvantage.

I asked Ed what, precisely, is the bandwidth demand for HDTV. He responded that six Mbps is required for pre-recorded content; live content takes 8�10 Mbps. He also mentioned that operators can throttle these numbers up and down, if they so choose.

IPTV is not a broadcast medium and Ed makes sure to emphasize this. This gets back to the discussion of not being forced to send every channel to the customer. Instead, a single stream is sent, as required, to each device.

So, as long as you have the bandwidth, you can have as many channels as needed. This is why AT&T can deliver a service that supports up to four TVs per house, including HD over 20-25 Mbps per home.

I asked if phone companies will, then, need about 30 Mbps to the home to be able to provide TV, broadband, VoIP, other services. Ed�s response was, perhaps, in the United States. In Europe, where HDTV is not as prevalent, less bandwidth will be needed, though he suspects that may change rather quickly with the World Cup � which is being contested as this issue goes to print.

He also mentioned that BT uses a hybrid solution, providing live channels over the air using digital terrestrial technology. There are millions of subscribers who buy a set top that plugs into an antenna to receive 32 channels for free. BT also allows broadband and other services over this same box. In this scenario, less bandwidth is needed than, say AT&T, as BT is delivering fewer channels over broadband.

I asked how his customers are doing; he said they have rollouts taking place in Switzerland, the United States, Germany, and France.

I also inquired about the challenges Microsoft is experiencing in rollouts, to which he responded that it took four tries for the cable company to get the TV in his house to work (maybe they knew what he does for a living). His point is that even mature technologies can have problems. The challenge, he says, is getting rollouts to scale. He likens IPTV rollouts to putting together puzzles where the pieces come from different companies. Furthermore, the puzzle is different from operator to operator.

I then asked about testing these services as they are rolled out. Ed thinks you need to test the resiliency of the network and the in-home consumer experience. You also need to focus on customer service representative (CSR) training and make the rollout very easy. Ed emphasized that it has to be easy for consumers.

I finished by asking where TV will be in five years and Ed conjectured that we will see TV change more in the next five years than the last fifty. �If you aren�t in this space already, you are a bit behind the curve,� he stated. You should be focusing on delivering and executing the basics, otherwise you have missed the boat. IT

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Huw Rees, Packet8/8x8

I recently had a chance to catch up with Huw Rees, Vice President, Sales and Marketing at Packet8/8x8 on their recent patent award in hosted VoIP. This is what Huw had to say:
“We are very pleased to have been awarded this patent, which validates the pioneering work done by 8x8 on hosted PBX technology and our subsequent inventions. 8x8 has developed a significant patent portfolio in multimedia communications over the years, but this is our first patent to combine basic VoIP technology with the delivery of value added services to the business market. The inventions we have patented include the call control application to control the call routing itself, a device-control application that provides the signaling between the call control application and the endpoints (telephones), and the configuration manager, which provides information to the call control and device-control applications. We have a total of 44 separate claims in this patent related to these inventions. All of this functionality is critical to our hosted PBX system and, potentially, all hosted PBX systems.” IT

Securing the Crown Jewels

The IPTV market is made up of a few different parts and, without access to content, you simply cannot make money in the IPTV space. But how do you get access to all the available content and, at the same time, ensure that your potential partners are happy to allow you to broadcast this content over IPTV. After all, when any sort of data goes on an IP network, it is usually possible to digitally copy it. Right?
Well, a company called Widevine Technologies is looking to counter conventional thinking by enabling service providers to keep content encrypted from end to end in a device-agnostic and open manner. Widevine’s goal is to allow service providers to keep the content providers happy that their programming cannot and will not be stolen.
Widevine, as it turns out, competes with Microsoft in this area and feels its differentiator from the software giant is their ability to work with more manufacturers’ technology, allowing best of breed solutions to be built. In addition, Widevine feels its solution is much more secure than Microsoft’s.
Widevine has a series of products that can help service providers keep content safe. One of Widevine’s innovations is a downloadable softcard that that can be reset and re-downloaded as needed. This, they tell me, reduces the risk of card attacks.
There is a suite of products for IPTV providers to choose from allowing encryption of video on demand as well as live streams. The company also has a product allowing IPTV providers to broadcast to consumer electronic devices and PCs. These devices are generally able to be hacked and, as such, sophisticated hackers can copy programming just after the program stream has been unencrypted — before it has been displayed.
To guard against this, Widevine has a product called Cypher Digital Copy Protection that monitors these devices for theft and responds accordingly. Some of the threats the company guards against are debuggers, in-circuit emulators, stream recorders, and screen scrapers.
In addition, the company has technology allowing digital watermarking of content, allowing service providers to provide additional protective mechanisms to their content providers. The theory goes that, if a pirated episode of 24 shows up somewhere, the service provider will be able to prove the programming did not come from the transgressing network.
Protecting content is not the first thing that comes to mind when you think about IPTV but, without proper safeguards in place, the IPTV market will certainly stall. You should certainly be exploring these sorts of technologies as you look to roll out your IPTV strategy. IT

Dividing Microsoft

Recently, Eric Lundquist wrote in eWeek that Tech Giants are stumbling. As an example, he offered Microsoft, which is throwing its hat into every ring. He says that even the mightiest company will have its resources drained by trying to focus on search-based ad engines, video game consoles, and enterprise TVs.
I have to agree with Eric, but maybe not for the same reason he sees. Microsoft has a great strategy in doing virtually everything in tech because of the massive unification of technologies taking place. For example, it makes sense to make an OS for a smart phone, an OS for supercomputing, focus on virtualization, and so on. It makes sense to have a back office IPTV strategy if you also supply consumer devices.
The problem with Microsoft is that it is too large. It hasn’t been able to easily articulate its message and core values for about half a decade.
The solution is very simple: Divide into a series of smaller companies that collaborate.
One immediate benefit of this strategy will be tripling of the amount of press the company’s products receive. (News outlets can only report on so many Microsoft stories each day.) I would suggest dividing into consumer, enterprise and service provider divisions with different names and more autonomy.
What do you think? IT

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