|North America 2006
|IPTV turf wars
Ervin Leibovici is the CEO of BitBand, a global provider of Video-On-Demand (VOD) server solutions for IPTV. Under his leadership, BitBand has partnered with the key players in the IP-TV industry and several high-profile investors. Prior to joining BitBand, Mr Leibovici spent five years with SGI as the region manager of SGI EMEA. Before that, Mr Leibovici held managing director positions for the Israeli subsidiaries of SGI and Cray Research, the supercomputer company. Ervin Leibovici earned a B.Sc degree in Computer Science from Technion – Israel Institute of Technology and an MBA from the Rekanati Business School at the University of Tel Aviv.
The service providers that can best personalise their services to meet the needs of their subscribers will win the battle for the consumer, the IPTV turf wars. There are a number of promising technologies – TVOD or TV On-Demand, PLTV, NPVR and TSTV – that unchain the subscriber from the broadcaster’s programming schedule and let him control when, where and what he can view. Of these, TVOD gives the viewer the greatest control; it seems destined to change the broadcasting industry forever.
Internet Protocol networks, ‘IP networks’, offer a large, flexible and evolving variety of services via a heterogeneous, low-cost and secure network infrastructure. The growing availability and reduced cost of high-speed broadband now make it possible to deliver high, DVD-quality, broadcast-grade TV content over IP. Moreover, using newer compression technologies, high-quality images can be transmitted using fewer bits to improve the usage of bandwidth resources. These technological market enablers, coupled with fierce competitive pressures on Telcos to create new revenue streams, are the driving force behind the evolving IPTV (Internet Protocol Television) market. Telcos and service providers are already starting to offer advanced entertainment packages to increase customer acquisition and retention. With triple-play packages, a combination of fast Internet, digital IP telephony and video, Telcos find that true real-time, on-demand content delivery is among the most lucrative value-added services. From a subscriber point of view, the convenience of easily accessing, choosing and immediately viewing the desired video content from large content repositories, without risking late-return fees so common with video rentals, promises high attractiveness and acceptance. The new entertainment era The IPTV value chain consists of a considerable number of industry players, all on the lookout for new revenue generating opportunities, yet cautious to stay in the game. These include CPE (Consumer Premises Equipment) manufacturers, video delivery solution providers, content providers, content aggregators (including some of the largest Internet players), DRM and CA (digital rights management and conditional access) vendors, and many more. They all need to stay tuned to the changes in the demand for entertainment, specifically, the way TV viewers consume content based on lifestyle changes. TV audiences today, overwhelmed by the vast amounts of broadcasted programming, are looking to gain a higher level of control over their access to content, thus improving leisure time quality. The growing demand of TV users for a more personalized media experience leads to a shift in power, from the equipment and infrastructure providers, to content providers. Users have started evaluating IPTV services primarily based on the ease with which they enable them to retrieve content at a convenient time. More-over, TV consumers have become aware of exciting capabilities their TV can offer, such as sharing content or sorting out their favourite content from the vast pool available and creating a personally tailored viewing package. These changes in the way entertainment is perceived are shortening the distance between end-users and content providers, and taking power, loosening the hold, of some of the traditional leading players in the broadcast and delivery arenas. Content providers, for their part, are recognizing the potential of new business models that support the growing demand from highly involved TV consumers. They are looking for ways to form close relationships with consumers, offering them the ability to consume media anywhere, anytime, thereby weakening the bond between the broadcast schedule and the audience. The next TV killer app To fulfil the promise of tomorrow’s TV, content providers can harness technological progress in their favour by presenting advanced TV products that enrich the digital viewing experience. A recent major trend in delivering digital TV to the consumer’s living room employs a method of separating content availability from the schedule dictated by the broadcaster. This is often referred to as TV On-Demand, or TVOD. TVOD is expected to be highly appealing to subscribers and open a world of possibilities for implementing new revenue-generating business models. Examples of TVOD applications include the following: • Classic network PVR (Personal Video Recording); • Time-shifted TV (TSTV); • Last X days TV; • Library of TV content. These applications offer viewers a rich, intuitive user interface and high service availability. To change the paradigm of TV viewing, TVOD applications need to demonstrate high performance and quality —including the smooth rewind of broadcast content and instant recording of live channels. TVOD employs a unique approach for recording and storing broadcast content to ensure high service availability and recorded programming accuracy. The innovative approach simplifies the interface with the IPTV application and its integration with the Electronic Program Guide, or EPG, and allows immediate viewing of the recorded content ordered by subscribers. This technology supports both centralized and distributed recording models, thus allowing the service provider to choose the best scheme according to network, storage and programming operator specific constraints. By providing a flexible, powerful, simple to integrate solution, service providers can extend their offerings and increase revenue, while leveraging existing investments in infrastructure and resources. What your TV can do for you Consider the following TVOD applications as examples of a different approach to improving the subscriber experience, forming the basis for new revenue-generating business models. Classic PVR and NPVR – Network Personal Video Recording This application allows subscribers to record a programme or a movie in advance for later viewing. The recording is typically ordered through the EPG and the ordered recording is available to the subscriber in his My Recordings file. The business model can be subscription-based, where, for example, users can purchase the movie channel package for US$8 monthly, or get the same package as a premium service with recording capabilities for US$12. Alternatively, the business model can be transaction-based per recording requested, or based on the My Recording quota of the user. Another variation of a PVR application is Impulsive Recording, where subscribers can start and stop a recording regardless of EPG programming. This type of application mimics a VCR with a better user interface, and is useful for impulsive users who do not register their recording requests in advance. Unlike a client’s home-based PVR, a network-side, NPVR, implementation allows greater flexibility for recording programmes on different channels that are aired at the same time. NPVR also offers a virtually unlimited storage quota since the same copy may be used by multiple subscribers. Pause Live TV – PLTV This application, originating from consumer PVRs and client-side digital video recorders (DVRs), allows subscribers to pause and rewind a live broadcast by switching seamlessly to VOD. Psychologically, the user feels less tightly bound to the broadcaster’s dictated schedule – and commercial breaks – and can take a short break, or replay a missed event. When planning a network-based PLTV service, special consideration has to be given to the cache servers so that low latency, quick response, is provided when shifting to VOD and, at peak, a great number of concurrent streams can be supported. The business model for this application is likely to be subscription-based, with a premium over the base price of the channel package. Time Shifted Television (TSTV) This application allows subscribers to backtrack using the EPG to view programmes that were already aired in the last few days. For example, a show, a recording of the last 24 hours, or even the entire last seven days of TV can be played back for subscribers who missed the scheduled broadcast of their favourite programme. They can now view that programme on-demand. TSTV is sometimes considered a ‘Pause live TV’ application, rather than backtracking the EPG. It is evident that such an application is considerably easier to use than the classic PVR since there is no need to plan ahead; moreover, the advanced functionality is provided within the same well-known EPG screen. Given the easy-to-use nature of TSTV, there is a growing industry belief that it will dramatically increase the amount of on-demand replays of live TV sessions. The use of this service might reach 50 per cent concurrency at peak times, with a service penetration of anything between 30 and 100 per cent, depending on the business offering of the service provider. > As far as the business model goes, the TSTV application is likely to be offered at a premium fee over the basic subscription fee of a channel. As opposed to NPVR and PLTV, which can be implemented as client-side solutions with certain limitations, this type of application, as well as TVOD, can only be available in a network-side implementation since multiple programmes are recorded at the same time on different channels and the storage capacity requirement is quite large. TV on Demand – TVOD TV on Demand is a new concept, rather than a specific TV application. It includes TSTV, but goes beyond it by offering the same TSTV content, accessible based on category, on a personalized basis using any classification chosen by the operator. This means that access to content is completely separated from the original broadcast time, and can be organized in ways that will increase consumption by subscribers by adhering to their needs rather than a strict timeline. The service provider may choose to categorize the recorded programmes by genre such as comedy, sports and news. This sort of categorization is popular in VOD listings. An alternative is to categorize the content according to the provider’s brand, such as HBO series or Hallmark movies. This type of categorization can aggregate several channels into a single branded category. More schemes use My TV, a user-specified classification organized in the form of a favourite list and classification by popularity such as the top ten programmes, etc. The road ahead Today’s TVOD applications are only a first, innovative, step towards the subscriber driven applications and services targeted by both subscribers and the industry. Given today’s information and content overload, the ability to control and personalize the access to content becomes a key factor in both the viewer’s experience and the vendor’s success. Undoubtedly, we will see more progress towards the ultimate TV experience – direct and unlimited access to any content, from any location, using any device, at any time.