Original URL: http://www.theregister.co.uk/2007/08/26/iptv_vod_complacency/

IPTV/VoD: The tortoise and the hare

How complacency is stunting the industry

By Alex Cameron

Posted in Broadband, 26th August 2007 08:02 GMT

Industry Comment The power of television is undeniable. When gorillas were first introduced to Longleat Zoo's Gorilla Island and had to be quarantined and initially segregated from each other, the wardens came up with the rather smart idea of building TVs in their enclosures to keep them occupied. The gorillas loved it so much that when they came to take it away, they protested and sulked so violently that they were forced to put them back in. Now their living quarters come with Sky Digital satellite dishes fixed to the roof. According to the zoo officials, they are particularly fond of Spongebob Squarepants and other children's programmes.

What happens in nature is often a fantastic yardstick for our own technological evolution. We are all subject to natural law and develop in the way everything else does, albeit on a slightly more advanced style and pace with all the tools that help us build bigger and better tools. Digital media is an art as much as it is a science, and it subscribes to the same principles that every other business does, especially the traditional precedents it takes its lead from.

About 300BC, Aesop, a Greek slave and storyteller, wrote a famous fable entitled The Tortoise and the Hare that teaches the impervious wisdom of the danger of becoming complacent and how slow and steady always wins the race. In the fable, the hare is so convinced he is faster than the tortoise that he rests and falls asleep under a tree. By the time he woke up, the tortoise had already crossed the finishing line by simply plodding along at his own speed. The hare lost the race because of his arrogance and assumptive thinking.

Spend a few days flirting with either the content owning community or technology vendors and one theme strongly shines through – their consistent belief that the market for IPTV and video on-demand is so nascent that it is virtually non-existent. Consumers aren't ready for next-generation entertainment and don't understand it, they say. They are happy with what they have and are overwhelmed with choice, the story goes. These are the same sages who make up the digital distribution teams in major studios that sell pay-per-view video on demand but have never had a broadband connection in their home, preferring 56k dial-up.

How very, very wrong they are.

The average consumer is way ahead of any industry professional out there today. They are crying out for content and the technology that powers it. So much, in fact, that they have already gone ahead and done it themselves without being marketed to. Unfortunately, we are all being held up by the weakest link in the chain.

The secret is that the market is there, as is the content and the technology, but the delivery network to get it to them isn't.

The chances are that if you did an anecdotal survey among the people you know, it's almost certain they will have built some kind of video on-demand network in their home, however basic. Naturally, the percentage will be much higher in the early adopting 24-35 year old male demographic, but it also extends to the middle-aged and older audiences, and across genders.

It's very easy to understand why they've gone ahead and moved up a gear from daisy-chaining VHS players to watch digital video content – they are illegally downloading TV and movies over the internet using programs like BitTorrent and want to watch them on their normal living room TV rather than the computer.

This leap of getting content from the PC to a normal TV is colloquially called the "air gap" in industry vernacular. It's an obvious and predictable transition, but a very hard one to make. The problem is generally with the location of their broadband router, which is typically in the study, hall, or in a room that is nowhere near the TV. You can't use Ethernet cabling because it's too messy, you can't use coaxial or copper cabling as drilling holes in walls is too time-consuming, and you can't use wireless as it's too unreliable for video.

The answer to home networking for video is powerline communication (PLC) or Ethernet over home electric cabling, which needs no install and can provide up to 200Mbps IP connectivity in any power socket in the home. Companies like Devolo (HomePlug), Corinex (DS2), and Netgem now have their products in high street stores and consumers are slowly realising their usefulness. The way to get your iPod to play on your car stereo when you only have an old cassette player is similar – buy an FM broadcasting device for the headphone socket and tune into the signal on the car radio.

At where we are now, consumers have a massive collection of electronic hardware doing a million different tasks. They are flooded with gadgetry that fills their shelves and doesn't quite seem to do everything they want. A typically forward-thinking home has an HDready plasma/LCD TV, a digital TV set-top box (often with PVR or recording capability, like Sky+ or Freeview Playback), a DVD player and/or recorder, a games console (e.g. Xbox 360), three to four PCs and, increasingly, a network media player such as Apple's iTV or D-Link's streamer ranger. It's getting chaotic. The proliferation of these devices is direct evidence that the electronics industry sees the demand for digital media in the home.

This pile of silver boxes is the bane of most girlfriends' or wifes' lives, and is leading to a wave of consolidation. If Sky added Ethernet connectivity to its HD set-top boxes that allowed access to digital content over the local home network, that is to say doubled as a network media player, its dominance would be complete.

The most frequent question among subscribers surveyed is why they can't use the Sky+ box to stream the music, TV, and movies they've downloaded onto their PCs from the internet onto their living room TV. Nobody wants the hassle of ripping DVDs, re-encoding video files or burning their own discs.

Setting up a basic video on-demand network at home isn't easy, and it's not made any easier by the fact that there aren't many places to go for help, or any companies that provide engineers that will come to your home to do the wiring for you.

Ironically, these companies don't exist as the perception is that the market is not there to justify their launch. Setting up that network is also very costly. At the least, a pack of PLC adaptors are needed, as is an IP device to show the media on the plasma TV screen (i.e. a set-top box or media player).

The first incarnation of the home video network was arguably the first generation Xbox that could be "mod-chipped" to allow a third party program called the "Xbox Media Centre" to run on it instead of the normal Xbox operating systems.

Computer nerds immediately realised that it was simply a computer with hard drive embedded into it; hence it could run Linux, read video files from a disc in its DVD drive, and stream out TV through its Ethernet connection. Mod your Xbox, add the Media Centre software, and the movies you downloaded would play on your normal TV.

The next-generation Xbox 360 took advantage of this and added the capability to behave as a media player and stream files from shared network folders on PCs built-in from the beginning. The catch was that the only material that could be streamed had to be encoded using the Windows Media system. Each proprietary media player product that has been brought out has its own idiosyncrasies that affect its reliability and attractiveness.

Luckily, there is an answer to the problem of certain devices not being able to read certain types of files or decode video created in different formats. The open-source media server TVersity is an act of genius. Install TVersity onto your PC, and you can immediately watch all the content on your PC hard drive through a web browser anywhere in the world. Put a media player connected to the TV screen on the network and TVersity connects to it perfectly.

But the genius is TVersity's use of the open-source FFMpeg library to transcode any audio or video format on the fly to any other. Your xVid file is converted into Window Media video in real-time for the Xbox to pump out onto the TV. If your D-Link judders and jitters when it tries to play back H.264 content, just use TVersity to transcode it into MPEG-1, which it displays perfectly.

To get a home video network up and running in 20 minutes is easy. Buy an external USB hard drive to put your movies and music on, connect it to a PC in the study, and share it out as a network drive. Buy a PLC starter kit and connect the first electric plug to your home router, and the second into a plug by your TV. Buy a media player of some kind (D-Link, Philips, Netgear, Xbox etc) and connect it to the second PLC plug's Ethernet connection in the lounge. Install TVersity on your media server PC and tweak it to play out the right way for your media player over the power cabling. Nineteen minutes later, you have a home video on-demand network.

Install one of these, and you'll see why people become so excited when they see what it can do. It's about as compelling as it gets. The message is simple, yet profound. Your customers are going ahead and doing it anyway, even when there's no content for them to buy.

But that still leaves the massive collection of DVD packaging on the shelf. We all know discs will become irrelevant as times goes on, as Bill Gates has predicted. Media will be streamed across the network, not from a physical product. Consumers want to be able to backup their DVD collection onto a hard drive (complete with menus, subtitling, featurettes, etc), but crucially, they want to be able to burn it back onto a disc again later if they need to. Research has consistently shown that reproducing the DVD experience over a network increases video on-demand take-up by more than 40 per cent. Network DVD is a familiar "bridge" to video on-demand that makes it easier to adopt and be perceived as great value for money.

Again this touches on another difficult problem, the one of consumers wanting the physical packaging and a sense of ownership of a product. CD artwork is especially pertinent as its part of an artist's work and it cannot be reproduced easily on a PC.

Apple's CoverFlow application does a good job with its 3D representation of a CD and its artwork, but like books CDs need to be held in the hand. Many smaller independent labels and artists are supplying the artwork with music downloads so consumers can take the PDF file down to the local printers and ask them to produce a top-quality copy of the physical product on-demand at their own cost.

But all of this is relatively pointless when we consider the whole point is about sending content down a broadband circuit into someone's home. Professional video on-demand networks do work when the conditions of the network are right, and they work very well indeed. Most services are contended around a 20:1 ratio, and tend to be live in real-time with response times less than 100ms. More advanced video compression may save bandwidth, but it has its price in that the decoding hardware needs a much faster processor to provide a smooth playback experience.

The truth is that in the UK the copper ATM network just isn't capable of streaming media properly to a TV screen, unless it's provided as part of an unbundled telecoms platform. We are massively behind other civilised economies despite having the most advanced TV platforms and audience in the world. So-called "Max" broadband is anything but. We cannot do live, real-time video delivery and won't be able to for a long time. Even when we can technically-speaking, the economics will still prove too prohibitive. Usage-based tariffs are totally opposite to what is needed for video. Regional fiber connectivity pricing to exchanges is frankly, absurd.

What we can do, though, is push video content progressively "over the top" or through a private ISP circuit onto some form of hard disk storage, like a PVR, media player, or desktop PC for playback later. The trouble is the vast majority of IPTV set-top box devices out there as we speak have been built for deployment in countries where realtime streaming is possible and already been in effect for years. Offering a TV guide based on XML data and HTML menus is easy with an in-built browser making requests to a web server somewhere. Getting 1GB video files down the line takes a lot more, even when you can cache the most popular material at the BT exchange at the cost of co-location fees.

Until capacity increases and the BT network becomes viable for delivering video, we will have to produce set-top boxes that progressively download DVD-quality media over the internet that we have to wait for. As most "live" streamed internet TV now uses Flash Video, set-top box vendors need to integrate the Flash codecs onto silicon to allow us to suck download material from Google Video and YouTube for offline viewing. Centralised playlists built using XML and stored on the internet to be edited and managed through a web browser are also a compelling feature that again broaches the divide between the PC and the TV.

Downloading video content "over the top" doesn't solve the issue of ISPs footing the bill for content distribution. Net neutrality may very well just be coming to an end unless content providers contribute to the bandwidth costs their products generate. All we need to know for now is that the audience is there and there is significant demand. We have been too caught up in the guessing game of whether consumers will take what we give them digitally to focus on the true problems, like how on earth we get the material to them without making them want to throw the TV out of the window.

Digital media is all about one thing, and almost only one thing – portability. MP3 files can be transported anywhere, and devices like iPods, Walkman phones, and USB thumb drives mean your music can go with you wherever you are. It's now the turn of video, although it has bigger requirements due to its size and complexity. Wherever there is a screen on an IP-connected device, there can be IPTV. DRM in itself is pointless for lots of reasons, but the reason it's commercial suicide is that it negates the most powerful selling point of digital material – its portability.

Consumers want to take their media with them wherever they go, and to share the things they have heard and watched. The world is screaming out for the content industry to provide for it. We need to be able to play our media anywhere, and we're willing to pay for it if we get what we want. And the first law of business is give the customer what they want. Because of that portability, the rights to access the digital content after we've obtained it need to be attached to an individual person, not a territory or some rights window controlled by a big media broadcaster.

P2P has created the market of distribution, whether we like it or not, and whether we choose to acknowledge it or not. The catch is that the market is now becoming disintermediated by the stampede of high street customers now wanting to buy directly from content owners instead of their middlemen. It has no distributor or agent with a stranglehold they can wield to monopolise their industry. Naturally, there are vested interests from those who are threatened, from the likes of high street retailers and broadcasters who traditionally buy it on our behalf and decide when we can watch it. Niche is the new mainstream when it comes to a globalised audience.

Consumers also desperately want back catalogue "long tail" content, and for simple reasons. They cherish memories, they are curious and the big production names don't necessarily distribute material that appeals to their individual niche tastes. Yes, they want the latest movies, but they are more compelled by the all-you-can-eat buffet of digital archives and enjoy getting lost in them. The trick is how to give them the choice of hundreds of thousands of hours of it so they can find their way easily and not feel totally overwhelmed.

The hare in Aesop's fable is an industry thinking it is way ahead of a tortoise consumer simply because it goes to trade shows and reads market research reports about future technology. Content owners, technology vendors and network owners need to face their fears, their commercial barriers and study the way customers consume. The high street customer isn't dumb, and is already miles ahead. But not because of technical understanding – because of the need to work out problems in the home that should be simple and common sense. The boat's already left, and hardly anyone who wants to be on it has actually boarded. You either listen to your own customers or they speak to you by voting with their feet.

© Digital TX Ltd

Digital TX Limited is a London-based provider of technology and consultancy solutions for interactive digital television and broadband media. Alexander Cameron can be reached at alex.cameron@digitaltx.tv.

As well as co-ordinating the birth of the IPTV Consortium (IPTVC), Alex is now offering a great value one-day workshop course on IPTV and Video On-Demand (VoD) specifically for web and media professionals. It can help you get up to speed on the latest technologies, content deals, operators and applications across the world, and offer immense value in identifying both new opportunities and threats for your business and personal career. If you would like more information, call Alex on 07986 373177 or email iptvworkshop@digitaltx.tv. Readers who quote The Register as their source will receive a 10 per cent discount on the course fees.