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IPTV/VoD: The fall of content's kingdom

But how will the story end?

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Industry comment The textbook says content is king, and that saying is something every telco and ISP worldwide is contemplating after realising that if they throw enough technical people at the IPTV infrastructure problem they can put a TV network together.

But putting the wires in doesn't make people flock to your service like broadband or telephony does. TV is not just a whole new ballgame, but a massive leap of competence and faith. To attract customers, you need good content, and getting it is no afterthought – there are far too many IPTV projects alive in the world today where content is seconded or laughed off. It's a very deadly mistake.

It's often easy to forget the humble beginnings of content owners, but a good place to start is with ASCAP (American Society of Composers, Authors, and Publishers) and the BMI (Broadcast Music Incorporated), both created just under a century ago to protect the rights of musicians, similar to the UK's PRS and MCPS. Before the 1920s, people didn't pay for entertainment like we do today – radio stations broadcast performers live without paying them. Radio (or the "wireless") changed everything.

During wartime, ASCAP members (predominantly musicians) boycotted the radio as the industry had become motivated to have their assets protected and paid for. Slowly they came to rely on the new medium until it formed the very backbone of their industry, once they were able to be compensated for their work being played on it. History repeated itself with vinyl, cassette tapes and internet P2P piracy today.

But this time content's kingdom is crumbling, right before our very eyes, slowly and gently.

There is a war on its way between telecoms companies and content owners, coming about because of a fundamental lack of understanding between each others' business models and operational concerns. The battle lines have already been drawn in the US and we will almost certainly see them coming to Europe and beyond very soon. Network operators want to charge content owners and developers for the secured delivery of their assets across their infrastructure, in the same way as mobile carriers do. That would be fine, except the network they are talking about is the internet, and it's not meant to work that way.

The aggressive stance of "two-tiered" internet access is a result of a lot of miscommunication between the two industries, and is a looming and dangerous issue that needs to be fairly resolved if IPTV is to move forward into the mainstream.

Telcos have been battering down the doors of content companies everywhere to ask for material to go on their shiny new IPTV services, but they've had it firmly slammed back in their face by rights holders who are rightly sceptical of the technology, the audience, and the lack of enthusiasm for their licensing terms.

But that is relatively easy to sort out, as everyone wants to make money. The problem has arisen with the advent of legal P2P distribution technology such as Kontiki. Broadcasters like Sky, Disney and the BBC have all worked out that they can save on costs if their distribution is decentralised – that is to say, not all streamed from one central HQ. P2P distribution offsets network traffic to the edge of the access network so that customers can download from each other, rather than the broadcaster. They still need a central P2P seed grid, but ongoing distribution costs are considerably lower.

That's great for broadcasters, but bad for ISPs. The traffic load is the same but shifted from one part of the network to another, meaning they are incurring the heavy backhaul costs that the broadcaster would have to put in if they were to do it themselves. Understandably, if you refuse to cooperate with licensing content and then use them to transport your products and services, you'll not only raise eyebrows, but probably the temperature in the boardroom with it. The impact from IPTV is going to be enormous, and ISPs have enough on their hands from the step change of just upgrading their infrastructure to deal with it.

So as a result, ISPs want delivery on their networks to be a premium service that big content owners pay for. This means the networks are paid for bilaterally, firstly by the consumer and now by the content distributor. Real-time video is orders of magnitude more expensive in comparison with other types of media, and the internet as a whole is currently evolving to be so much more than it was originally designed to be. That evolution brings costs and difficulties which the current framework can't meet. But a tiered delivery structure breaks the open model of so-called "net neutrality" and as Tim Berners-Lee recently pointed out, would mean we enter a "dark period".

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