IPTV and VoD: the great content adventure

Time for a new deal between ISPs and content owners

Next gen security for virtualised datacentres

The internet and the digital media that comes along with it have changed the collective worlds for rightsholders – whereas analogue copies of their VHS and cassette tapes would degrade through copying and good old fashioned wear n’ tear, the latest era of technical wizardry preserves the integrity of media perfectly and makes it easy to reproduce unauthorised copies of copyrighted work. Not only that, but it is a highly disruptive and invasive protocol that eats into their core businesses.

The public buy physical media – DVDs, CDs and video games, all in their packaging. Together they are worth many, many times more than their newer cousins such as Pay TV or Video On-Demand - media on-demand is a competing product and potentially takes away a more profitable sale. Those who control the licensing to works that are so lucrative do not want to be cut out of the distribution chain, and they are fighting like any other business would, to protect their primary interests. And that is what most of the P2P argument comes down to – who controls the distribution.

The very first thing anyone looking to acquire content for an IPTV needs to do is familiarise themselves with the business drivers of those supplying it. First and foremost, the entire distribution process must be secured from end to end, physically (locks and staff background checks), electronically (digital rights management, DRM), in transmission with conditional access encryption (CA), and through analogue copy protection (which generally works by exploiting the automatic gain control feature of VCRs by adding pulses to the vertical blanking sync signal).

Secondly, the viewing audience must be large enough to ensure sufficient exposure for the material – when you consider most TV network audiences in the US are at the very least in the tens of millions it goes some way to explaining their hesitance to work with young start-ups with fewer than 10,000 subscribers.

Thirdly, permitting third parties to distribute content is a huge commercial risk, so almost all will demand pre-paid sales up front, typically between £500k – £1m per studio/label in most cases. Fourth, quality must be preserved at all points of the distribution chain, which must be contractually guaranteed with service level agreements (SLAs) – that means the highest quality imagery (produced by trusted third parties) and sonic perfection. Rights are negotiated for a specific region, purpose and technical platform – if it’s not in the contract, you don’t have permission for it. And possibly one of the most important points to understand, the rightsholder will almost always want to own the relationship with the end-user, for every new contract, distribution agreement or alteration.

Massive barriers to entry

The old economics price most ISPs and telcos out of the content world – BSkyB have completed monopolised the Pay TV movie (PPV) window in the UK with their Box Office service (by block-buying movies for six months at a time, hence the rotation schedule on Sky Movie channels), and Murdoch’s enormous power in the world’s media markets is a force that very few are willing to compete with. Many argue the "window" release system is now reaching the limits of its flexibility and needs to be changed to accommodate the increasing power of consumer choice through media that is offered on-demand. The length of time spent negotiating licensing and sub-licensing agreements is simply not conducive for the pace of technological change – it is now actively hindering innovation.

The question for new market entrants is viability, and the message to content owners is clear enough.- the way they do business right now is just not commercially viable to new customers. The future of TV is not single subscriber bases of millions, but in an aggregated consumer population made up from many differently-sized niche IPTV audiences. Operators wanting to deploy triple play services are faced with massive barriers to market entry, yet still are compelled to press ahead with very risky plans simply as their competitors are doing the same.

In the UK, only the top four ISPs (BT, Wanadoo, Tiscali and AOL) have the pockets deep enough, and a subscriber base sufficient enough that will enable them to offer premium content. The will and enthusiasm from the top 20 ISPs is there, but snobbery and financial implications (such as cash low issues generated by pre-paid sales guarantees) make such ventures an unsustainable risk. There is an answer to this, and it’s in the opposite of what the current TV market is - niche content, democratisation and innovation. More on that later.

Their current pre-IPTV compromise is to market video-download services on the internet. This is not true “IPTV” in the sense that although it uses internet technologies, it goes across the public internet and does not replace part of, or a whole TV broadcast service such as Sky or Freeview. ISPs know how to innovate, and they’re incredibly hungry for new products and services to offer their attention-challenged customers. Indeed, some of the more modestly sized operators investing in small, localised LLU deployments are involved in some fascinating TV projects that are perfect for risk-minimised experiments by content owners.

Everyone wants in, and wants to beat the big guys. They want to cash in on the new iTunes phenomenon. Illegal downloading soars with the growth of broadband connections that enable huge files to arrive in no time at all. The unspoken truth is that ISPs do profit from piracy – free music, movies (read: porn), games and software are a massive incentive for new people signing up for broadband. It’s not in their interests to tackle it, and as long as it’s impossible for them to offer entertainment services through the cooperation of rightsholders, the problem will simply get worse.

Boost IT visibility and business value

More from The Register

next story
Canadian ISP Shaw falls over with 'routing' sickness
How sure are you of cloud computing now?
Don't call it throttling: Ericsson 'priority' tech gives users their own slice of spectrum
Actually it's a nifty trick - at least you'll pay for what you get
Three floats Jolla in Hong Kong: Says Sailfish is '3rd option'
Network throws hat into ring with Linux-powered handsets
Fifteen zero days found in hacker router comp romp
Four routers rooted in SOHOpelessly Broken challenge
New Sprint CEO says he will lower axe on staff – but prices come first
'Very disruptive' new rates to be revealed next week
PwC says US biz lagging in Internet of Things
Grass is greener in Asia, say the sensors
Ofcom sees RISE OF THE MACHINE-to-machine cell comms
Study spots 9% growth in IoT m2m mobile data connections
O2 vs Vodafone: Mobe firms grab for GCHQ, gov.uk security badge
No, the spooks love US best, say rival firms
Ancient pager tech SMS: It works, it's fab, but wow, get a load of that incoming SPAM
Networks' main issue: they don't know how it works, says expert
Trans-Pacific: Google spaffs cash on FAST undersea packet-flinging
One of 6 backers for new 60 Tbps cable to hook US to Japan
prev story


Endpoint data privacy in the cloud is easier than you think
Innovations in encryption and storage resolve issues of data privacy and key requirements for companies to look for in a solution.
Implementing global e-invoicing with guaranteed legal certainty
Explaining the role local tax compliance plays in successful supply chain management and e-business and how leading global brands are addressing this.
Top 8 considerations to enable and simplify mobility
In this whitepaper learn how to successfully add mobile capabilities simply and cost effectively.
Solving today's distributed Big Data backup challenges
Enable IT efficiency and allow a firm to access and reuse corporate information for competitive advantage, ultimately changing business outcomes.
Reg Reader Research: SaaS based Email and Office Productivity Tools
Read this Reg reader report which provides advice and guidance for SMBs towards the use of SaaS based email and Office productivity tools.