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Gearing Up for IPTV
By Susana Schwartz
As telcos strive to make IPTV a compelling alternative to cable and satellite TV, they have to drive consumers to higher-margin video and data services through portals and wireless devices. Video streams of re-purposed sports news and entertainment began with Sprint TV Live as part of Sprint PCS Vision Multimedia Services and Verizon developed content specifically for mobile TV. However, audiences are still limited and the technology still remains in its rudimentary phase.
To entice consumers, lower price points are needed, and to entice content providers, more control over content is necessary.
The emergence of Network Personal Video Recorders (NPVR) could be the answer. Already, Entone and BitBand offer NPVRs—the latter of which has a significant deployment in Italy with FastWeb.
Ideally, NPVRs could be the means by which telcos provide all customers the ability to procure any piece of broadcasted content at any time. It has been deemed by some to be the end of “appointment” television, where people must view content at times dictated by networks or content providers.
While this is not a new concept because of PVRs and DVRs, the idea of storing the content at the head-end equipment on the telco side is a novel idea. Rather than putting caching devices at the customer prem, software sitting at the head-end enables the telco to store content for whatever period they choose. That means all commands are sent to the head-end. In other words, consumers get the same capabilities as they do with a DVR, but a smaller cost.
It would give telcos control over the content, thus mitigating illegal use of content such as burning of CDs without permission, and it would enable them to bring down prices because the set-top-box (STB) would no longer serve as the storage device for content.
Today’s Tivo-type devices used for mini-storage at the customer prem cost $200 or more for a new device (but basic devices can be had for a one year service contract at $16.95 per month). Nowadays, European and Asian operators are deploying NPVRs for less than $60.
“Because storage is becoming commoditized, the price of storage is dropping,” says Mukul Krishna, industry manager/Digital Media Practice at Frost & Sullivan. “Also, content providers are more amenable to working with carriers with this model because there is more control over what happens to their content. Customers like it because they can watch their shows a week or two later at their convenience.”
“With so many stored programs on the head end and applications needed to manage, serve, insert ads and provide on-demand capabilities among others, carriers need to just integrate software applications on top of their appliances to offer the flexible access customers want,” says Krishna.
Though the process of controlling content might be easier, the roadblocks in figuring out how to offer content any time without breaking the rating:advertising relationship are difficult. With individual DVRs, the ratings can still be procured, but with network-based equipment, some sort of reporting about viewership would be needed. “The networks call the practice of storing major content for re-broadcast or re-purposing at a later time as ‘time shifting,’ which changes the way they have to think about ratings and advertising,” says Rich Baughman, senior director of business solutions at SureWest, a full-service communications provider with quad play services. “When it comes to popular shows like Lost or American Idol, where 20 percent of the population is recording it, it would behoove stations to try and offer content online, but for operators to do it, there are some issues to work out.”
Other applications that generate metrics on viewership will need to be integrated at the head-end and speak with the other applications to generate that information.
If those issues could be hashed out, NPVRs could become a competitive advantage for telcos over cable companies as a way to attract customers to the new set-top-boxes. “Telcos could have an opportunity to sell different storage tiers based on the customer’s needs,” explains Baughman, noting that NPVRs would enable all sets in the same house to access the same set of stored content. “In increments of 30, 60 or 90 hours, or more, customers could buy personal blocks of space on the storage servers so that they can watch whatever they want at any time, on any TV set or maybe even any device, such a PC.”
That would depend, however, on the manner in which data is encoded, as with MPEG standards, which are still evolving.
“Ultimately, you could view your favorite show on your PC while you are simultaneously gaming online with a friend, and ordering a pizza at the same time,” adds Baughman.
Reality Check
While the possibilities for compelling services are endless, there are some real difficulties to mull over.
With IPTV, carriers will have non-traditional components around digital assets to manage. If operational considerations are neglected, there could be serious issues down the road.
Digital rights management (DRM), digital asset management (DAM) and content management, as well as on-demand technologies will increase the amount of gear carriers must integrate with operational systems.
Archival and search-and-retrieval processes require video servers, network video recorder software and content management systems. Most agree that a Web Services architecture will be the key to enabling applications to talk server to server at the backend. “Because many layers of OSS are held together with chewing gum, more and more companies will look to Web Services as a means to integrate with third parties or circumvent certain layers of OSS,” says Krishna.
Web Services can enable companies to dynamically change IPTV offerings without disrupting underlying infrastructure. Already, SOAP has been widely used to enable software modules to interact through Web Services Description Language (WSDL).
Additionally, IMS holds the promise of facilitating one service delivery platform for all IP services, which means IPTV-specific components should be viewable separate from the network over which the services ride. Adding digital content to the growing amount of ringtones, graphics, images, video clips, animation and audio already managed means that operators will have a huge amount of content in digital assets to manage, archive, and retrieve for multimedia services.
As explained by Derek Kuhn, Chairman of the Broadband Content Delivery Forum and Director of Marketing and Business Development for Alcatel during the Broadband Content Delivery Forum a couple years ago, DAM is complicated for operators because they do not have experience inputting metadata about characters and scenes, dialogue and episodes. That could be the main hindrance to telco’s marketing’s visions coming to fruition.
Like telecom, most studios and channels operate in a silo fashion, which means no unified method of DAM exists. Additionally, content providers have strict rights demands, which means IP services struggle to monetize and personalize content.
“DAM, DRM, interactive VoD and targeted ad-insertion solutions are just some of the technology components that operators have to fit in the vendor mix,” according to Krishna. “The OSS and billing companies need to actively integrate or partner with content management companies specializing in video so that carriers can accommodate both TV and cellular customers with IPTV offerings,” says Krishna.
Companies like EMC focus on content and digital rights management, and storage. HP has also focused on telecom as it expands its service delivery platform and its digital media platform. There are even some content management folks now starting to talk about building their own billing components, such as NorthPlains Systems. If that were to happen, the content managers’ billing solution would act to as a preliminary biller that would then send records on for more complex billing processes. One thing billing and OSS companies will have to consider is how to help their customers to execute transcoding of digital content into different formats so that operators can differentiate between content for customers on TV and content for portals and cell phone services.
“Ultimately, you could view your favorite show on your PC while you are simultaneously gaming online with a friend, and ordering a pizza online at the same time,” adds Baughman.
The challenge is that no single standard exists in the industry for encoding in different formats. “Encoding in various formats drives up costs," says Krishna, noting there also is a high cost incurred in moving from analog to MPEG 2. “That will dissuade recent buyers from adopting newer formats, effectively slowing market growth.” Additionally, lack of fiber to the home will be another impediment with which to grapple.
Despite the challenges, Krishna believes the encoding market for IPTV will see strong growth. “It should be in the$100 million range at the end of this year and continue to show a very robust double digit growth going forward.”
He also sees the video-server market for IPTV growing substantially: “The market was worth $30 million in 2004, which works out to a 70-percent increase compared with 2003,” he says, predicting that by 2009, the market will account for more than $100 million. “By 2011, it will be pushing close to $200 million,” adds Krishna.
The software component of networked personal video recorders (NPVRs) for IPTV will be an area of more incremental growth. “We think it will be worth around $2 million at the end of this year, but it will cross $10 million within the next 5 years.
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Oracle Buys Portal Software It was announced on April 12 that Oracle will acquire Portal Software for approximately $220 million dollars. Portal’s management and employees will form a new global business unit within Oracle and will concentrate on billing and revenue management. Portal’s senior vice president of worldwide sales, Bhaskar Gorti, will lead the unit as General Manager. Portal Founder and CEO Dave Labuda, who will become CTO for the new Oracle business unit, cited the combined value of Portal’s billing and revenue management with Oracle’s ERP, CRM and infrastructure software offerings. Acquiring Portal gives Oracle new billing capabilities that span wireline, wireless, broadband, cable, VoIP, IPTV, music and video services and provides Oracle with greater reach into the end-to-end management of application-based service offerings, including media and entertainment content. Oracle provides Portal with more significant financial backing, deeper research and development resources, and significantly greater sales channels. During the conference call announcing the acquisition, Oracle spokespeople stated that the company would continue to expand its communications software offerings in order to provide an end-to-end, integrated application suite.
Convergys Signs Disney Mobile, Telecom Egypt Convergys and its MVNE partner, Visage Mobile, announced a multi-year agreement to provide outsourced billing and professional services to Disney Mobile. Visage will provide the service delivery platform. Disney Mobile’s offering will include wireless voice service, exclusive handsets and a package of features and applications tailored to families. Convergys also announced that Telecom Egypt, a fixed-line provider in the Middle East and Africa with more than 10.5 million subscribers, has signed a five-year licensing contract for Convergys’ Infinys rating and billing solution. Convergys will manage the replacement of Telecom Egypt’s 12 existing billing systems by providing project management, business requirement analysis, solution definition, configuration, installation, testing and data migration services.
AutoTrader.com Selects Comverse Comverse announced that AutoTrader.com has selected Comverse’s Kenan FX billing and customer care solution. AutoTrader.com serves 40,000 dealers and 250,000 private owners who advertise vehicles to the site’s audience of more than 11 million shoppers each month.
TelePacific Extends Contract with OSG OSG Billing Services has announced a three-year agreement to continue managing invoice presentment and distribution services for TelePacific Communications, a California-based service provider serving the business market. TelePacific has added the OSG Dynamic Messaging feature that enables targeted marketing.
Telcordia Signs Flying J Telcordia announced that Flying J, a highway hospitality services company, has selected the Telcordia Hosted Solution for MVNOs to launch its prepaid wireless service to the nation’s transportation industry. The hosted solution features real-time call management, helps eliminate revenue leakage and facilitates a positive end-customer experience. Flying J is ranked 30th among Forbes’ 500 largest private U.S. companies, with 2005 annual sales exceeding $11 billion and more than 14,000 employees in the United States and Canada. Sprint is providing access via its nationwide digital network.
Convergys Licenses bcgi Products Bcgi announced it has signed a multi-year software license agreement with Convergys. Convergys will license bcgi’s Real-Time Billing, which enables network-based prepaid and hybrid mobile service; Payment Manager, which helps operators broaden payment channels and reduce the complexity and cost of managing multiple payment partners; and Mobile Guardian, which can block unwanted, unauthorized and harmful content and contact from mobile phones.
BT and MetaSolv Expand Relationship BT will implement MetaSolv’s Provisioning 5 to enable IP service delivery. Provisioning 5 will facilitate the automated provisioning of BT’s MPLS-based IP-VPN services and network elements as part of its Vserve initiative. BT is replacing a legacy order management system with Provisioning 5 to manage the entire provisioning process for provider edge and customer edge routers, MPLS IP-VPN services and QoS. The product is already deployed at BT to manage a number of services and technologies.
Axtel Signs Comptel for Activation Axtel, a CLEC based in Mexico, has selected Comptel’s automated activation and provisioning solution for its new pre-WiMAX network. Axtel offers integrated local, long-distance, Internet and value-added services. It currently uses Comptel for provisioning and convergent mediation.
TDC Deploys Cramer 6 Activation TDC has licensed ActivationEngine, a product within the new Cramer6 OSS Suite. TDC is Denmark’s incumbent telecom operator and the second-largest provider in Switzerland, offering fixed wireline, mobile, Internet, cable TV and wholesale services. TDC is deploying ActivationEngine to support a new Gigabit Ethernet services platform. ActivationEngine will be deployed across multiple network domains and technologies, and will replace TDC’s legacy activation systems.
