Mind the gap: Can OTT content catch up? - CSI Magazine

Mind the gap: Can OTT content catch up?

march/april 2012 TV gaming

HTML5 video

Smart TV roundtable

SNG future

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Contents highly competitive sector through STB and cloud-based gaming services

24

HTML5

We examine how the over-the-top industry is rallying behind this technology as Flash fades away. Also, an expert gives his opinion on page 27

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28

Analyst corner

Dual-screen and social TV

IHS Screen Digest’s Guy Bisson compares distribution and income for European channel brands

A UK government-organised event showed some surprising stats and attitudes on these hot topics and examined their impact on the industry

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32

COVER STORY - OTT content

SNG

How can the over-the-top content gap be bridged and how will it change the TV industry?

Satellite news gathering is evolving towards mobile news gathering

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35

YouTube: friend or foe?

Adaptive bit rate

Is YouTube an opportunity or a threat for traditional broadcasters?

Verimatrix outlines how Smooth Streaming and HLS can give operators a pain-free way to multi-screen

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43

TV gaming

A look at how payTV can carve out a niche in this

Smart TV roundtable

A diverse panel discusses the main issues faced

Reports: Another week, another new online video streaming service. As Dixon’s new KnowHow Movies service launches in the UK, you’d be forgiven for wondering if there is any room left in a market that already contains a host of rivals catering for a relatively small demographic. This, somewhat perversely, is Dixon’s - the UK’s largest retailer - argument, that over 90% of the population are not engaging in digital video and it is confident it can kick-start the consumer mainstream. Apart from a strong installed base of devices, the company has managed to acquire some decent content (see page 8) to take on OTT and pay-TV players. This is an issue many feel is key in the current OTT vs pay-TV debate/battle, and one we analyse on p14. YouTube has its own offerings in this space, which we look at on page 18. In terms of technology, HTML5 making a big splash in OTT and TV Everywhere, and this is deconstructed on pages 24 and 27. Goran Nastic, editor Perspective Publishing 3 London Wall Buildings London EC2M 5PD www.perspectivepublishing.com

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News

Sky to launch internet TV The UK’s leading payTV platform BSkyB is launching a streaming video service to compete with new entrants such as Netflix and targeting the 13 million or so UK households who do not subscribe to payTV. The new as yet unnamed over-thetop service, which will go live in the next six months, will have unlimited access to a package of Hollywood movies for a monthly subscription fee, with sport and entertainment on offer soon after launch. Pay-as-you-go for rental of single movies will also be available. The news comes as KnowHow Movies became the latest entrant into the increasingly crowded UK online video market (see p8). The move is part of the company’s strategy to tap into the growth of connected devices and reach those who don’t currently subscribe to a

payTV service. The new service, which will support recommendations, will be available across a range of connected devices, including PCs, Macs, laptops, tablets, mobile phones, games consoles and connected TVs. Sky already provides its Sky Go branded multi-screen service to existing payTV subscribers and revealed as part of its Q2 results that 2.5 million customers have used it some five months after launch, with a high of 1.5 million unique users in

news in brief December. The Android version is due out this month. Overall, Sky generated a turnover of GBP3.364 billion, up 5.6% y-o-y despite falling ad sales, while net profit for the six-month period climbed to GBP441 million. TV growth was lower year on year at 40,000, as the market reaches saturation, although 60,000 new standalone communications customers were added during the period. Customers take an average of 2.6 products each, with over three million taking a triple play of TV, broadband and telephony, driving ARPU to a new high of GBP544, with churn at 9.6%. HD subscribers reached four million, with 138,000 net adds in the quarter.

Virgin to open up OTT Virgin Media is in talks with streaming services LOVEFiLM and Netflix to provide added content for its TiVo boxes, which blend linear with over-the-top broadband content. CEO Neil Berkett said: “We want TiVo to be completely open. We’re talking to everyone.” The company is, how­ ever, taking a cautious stance on the issue with a phased approach to OTT content as opposed to letting in the Wild West of the internet. “It’s easy to publish all sorts of things to it, because it’s got Flash - but we want to land the real heavyweights,” said COO Andrew Barron. Since the TiVo platform was launched at the end of 2010, only 15 applications have made their way onto the service.

News

CTVMA expands east

news in brief DVR records all Freeview channels, all the time A new DVR has gone on sale in the UK that can record every channel broadcast on Freeview and save it for up to a week. The Promise products, initially available in the London area, record all the 50+ Freeview channels allowing the consumer to then pick the programmes they want to watch. Promise Lite stores all programmes for three days and costs £1,200 while the Promise Seven model, which retains them for a week, has more advanced options and costs £1,998. New programs automatically replace the oldest, except for shows the user has marked to be saved. The products will be rolling out to the rest of the UK in due course. TV audience measurement expands in Poland Nielsen has won a contract with partners cablenet UPC Polska and ad sales firm Atmedia to launch what will be the largest TV audience measurement panel in Poland. Nielsen will measure the behaviour of payTV audiences through a sample of 5,000 households, with research based on return path data (RPD) technology using UPC’s decoders. The first batch of data will be made available to UPC’s thematic TV stations in May this year, analysing viewership among the cable company’s customers and their use of interactive services such as video on demand and games. Panel design, data processing and panel recruitment will all be led by Nielsen, which was last year awarded a four-year contract by public broadcaster Telewizja Polska (TVP) to provide TV audience measurement services.

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March-April 2012

The Connected TV Marketing Association is looking eastwards with the formation of a regional body focusing on Central Eastern Europe, Russia, CIS and Turkey. The newly formed CEE CTVMA Board will be led by Mirek Smyk, MD of Mirek Smyk Consulting Group (MSCG), with members coming from local broadcasters, OTT and multi-screen platforms. The board will consist initially of ten executive members from all

countries in the region including Russia and Turkey, and local CTVMA boards will be created in each country during the next few weeks. Membership and other cooperation opportunities will be announced in due course. The CTVMA CEE will close appointments for Executive Board members from other CEE countries including Russia and Turkey by end of February 2012 and will announce its 2012 Annual CEE Activities and

Development plan during major industry events in March. CTVMA - itself only established late last year to promote all things connected TV - has identified the region as a key potential growth area for connected TV, where in markets such as Poland already more than half of all sets are internet enabled. One of its key challenges is to facilitate relationships between content providers, CE manufacturers, advertisers and consumers.

Hotel deploys second screen solution The Mandarin Orchard Singapore has become the first hotel in the country and one of the first in the world to offer a mobile device solution for a range of in-room services including iPads for use around the hotel. The advanced in-room IPTV system was deployed with local operator StarHub and connects guests at all of the hotel’s 1,051 rooms to features such as express check-out, concierge and dining services, movies-on-demand and 24 StarHub TV channels. StarHub also installed a second screen solution enabling resident

guests to remotely access in-room services from hotel-issued iPad devices. The specially designed mobile device solution is connected full-time to the hotel’s Wi-Fi network and provides IPTV access from anywhere within the premises. Using the iPad app, guests can

navigate through IPTV via an on-screen remote control, view messages, select StarHub TV channels and movies-on-demand, as well as check real-time flight information. In the next phase of development, guests will also be able to browse current promotions at the hotel and The Mandarin Gallery, control the room ambience, as well as ordering in-room dining service. A report from MRG identified over 11 million hotel rooms and one million airline seats as potential IPTV applications, predicting the market for hotels and airlines to be worth $1.9 billion in 2012.

BBC: SmartTV should go back to basics The head of the BBC iPlayer catchup service has warned the industry needs to rethink its approach to smart TV, arguing that there will always be disparity between connection rates and usage unless devices become easier to set-up. “We need to go to basics with connected TV to reach mainstream audiences. It shouldn’t require a firmware update,” said Daniel Danker, speaking at the DTG Summit, held in early March. “We

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know we’ve succeeded when the technology becomes invisible.” Danker’s comments came as he gave out some usage figures for iPlayer across various devices. The damning statistic was that four times more consumption takes places on the iPad despite there being more than twice as many connected TVs in UK homes. The single tablet device accounts for 11.7 programme views in the last month compared to only 2.7 million over all types of

smart TVs, although this is growing at a fast rate. According to Rovi, over half of all smart TVs sold globally aren’t connected (52%), with the connection rate in the UK standing at only 35%. Danker added that the BBC is engaging in a renewed focus on the Red Button for interactive TV, with 19 million people using the service every month. “It’s a dead simple user experience.”

HbbTV a “lightweight” standard, says Zeebox’s Rose Zeebox co-founder and CTO, ex-BBC iPlayer head Anthony Rose, has criticised the European Hybrid Broadcast Broadband Television (HbbTV) initiative, calling it a “lightweight” standard that won’t satisfy consumer demand. Speaking at a recent Westminster organised event on the dual screen and social media (see page 28 for a full review of the event), Rose said European broadcasters have been slower to adopt the opportunities on offer than their US counterparts: “Whenever technology provides something new, an incumbent always has a choice of ignore, block or embrace, and as I’ve spoken to broadcasters across Europe and US and elsewhere, and I think some of the European ones are a little bit more conservative; they wish the internet would go away, it spoils the business model.” Rose argued that the nature of the standard will simply lead consumers to go towards third party service and applications. “If you look at the HbbTV standard in Europe, what happened is the European broadcasters decided they didn’t like what TV manufacturers were doing, and instead they said they would create a new standard, a fairly lightweight standard that would allow broadcasters to overlay things over their

programmes to create interactive experiences. But importantly it also ensured that only broadcasters could do it, it’s enshrined in the standard essentially, that broadcasters could say, no one else other than me can overlay things. And so as a result, I think, it’s a very low technical standard to implement and I think it will become quite successful in being built into every TV in Europe. “However, I think it won’t offer any excitement because the broadcasters will fail to deliver, they are the incumbents and they won’t be disruptive to their own business and therefore the TV manufacturers will continue to drive traffic to the apps area and second screen makers will continue to innovate.” Rose also explained how Zeebox was established in response to customer demands for easier access to more information about what is on TV, as well as to give them the ability to buy things they see on the box. The company, one of the most high profile start-ups in this space, at least in Europe thanks to Sky’s recent 10% investment, is rumoured to have delivered around 200,000 downloads in December, although MediaCom estimates that only 1,600 tweets were actually made through the Zeebox app.

BBC confirms 3D Olympics The BBC has said it will broadcast some events in 3D during this year’s London Olympic Games as part of its trials of the technology. The trial coverage will be broadcast via the BBC’s HD channel and will include the Opening Ceremony, the Closing Ceremony and The Men’s 100 metres final, as well as a highlights package at the end of each day. The BBC broadcast in 3D for the first time last year when it showed the Men’s and Ladies’ Finals of the 2011 Wimbledon Championships. A number of other trials are also underway. “We have always said we believe some of 2012 should be captured in 3D, and we’re delighted to confirm our offer to audiences in the UK, providing them with a new way of getting close to some of the key moments from the London 2012 Olympic Games,” said Kim Shillinglaw, head of BBC 3D.

The public free-to-air broadcaster added that the plans were never to have a dedicated 3D channel for the games, a decision now vindicated by relatively poor consumer demand and the abandonment of certain 3D channels around the world such as by Canal Plus in France. It also admitted while its decision to go ahead with 3D broadcasts has met with polarised opinions, the technology should enhance the overall experience and lends itself well to certain Olympic sports. • In other positive news for 3D, Empire Post Media has secured funding to create and develop new 3D TV projects that will complement the company’s first television series, Journey Beyond. The funding will allow the company to develop up to ten new projects. The company’s strategy is to select content opportunities that are positioned to take advantage of the increasing number of platforms and channels for 3D content.

Your vision...

News

KnowHow Movies launches in UK

news in brief HEVC spec a step closer A joint effort between the MPEG group and the ITU-T has made a draft of the next-gen High Efficiency Video Coding (HVEC) standard, also known as H.265. The spec, which faces two more hurdles before it is finalised, is expected to provide efficiency boosts in transmitting video of 35-40%, although one insider claimed it could be as high as 67%, according to a report in the EE Times. The draft international standard is due in July, at which time more chip designs are expected, the report said. The thinking is the successor to MPEG-4 (H.264) would be out on the market to support new services such as ultra high definition (UHD). A final standard is aimed for January 2013. In-flight sports channel goes live IMG Media and Panasonic Avionics have launched the first live global premium 24-hour sports channel for airline passengers. Going live this week, the Sport 24 service is being broadcast via satellite to speciallyequipped Gulf Air planes. It will feature live coverage of the 2012 Olympic Games, English Premier League, and a host of other sports content. Gulf Air, Bahrain’s national airline, is initially offering Sport 24 on its ‘Sky Hub’ which is currently available on some A330 aircraft retrofitted with Panasonic’s Global Communications Suite. There are ongoing discussions with a number of other airlines. The channel will also be available to cruise liners from March, with Norwegian Cruise Liners being the first operator to broadcast on select vessels.

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March-April 2012

Currys and PC World have become the latest British retailers to make a splash in the increasingly crowded online video waters. The transactional on-demand movie and TV streaming service, called KnowHow Movies, launches with content from Disney, Warner Bros and Momentum Pictures, with three other major film studios in the pipeline. Launching on Thursday 1 March across 600 stores, around 9,000 staff have been re-trained in the process, the biggest training programme in the company’s history. Around 1,500 titles will be on offer at launch, with content to be expanded daily thereafter. New releases will be added in same-day release windows as DVDs and BluRay, priced at £3.99 to rent and £12.99 to buy. Catalogue titles are priced from £2.99 to rent and from £5.99 to buy, with TV shows starting at £1.99. Each new connected device sold by Currys and PC World will come with KnowHow Movies pre-loaded and demonstrated at purchase by store staff. Customers will be able to access content on up to five registered devices, allowing them to place- and device-shift content between them. Initially available for PCs and Macs, KnowHow Movies will be rolled out to tablets, mobile phones

(Android/iOS), Smart TVs and games consoles within the next six months, again either pre-installed or via a software update in app stores. Gift cards will also be available to buy in-store. Rovi is providing the technology platform and will manage the digital supply chain. On many devices, it is rolling out a new form of adaptive streaming (ABRS) called Divx Plus, which it claims will for the first time enable the switch from HD to SD smoothly and seamlessly. The digital locker runs on Rovi’s proprietary

system but this will eventually migrate to the Ultraviolet standard later in 2012, which has been gathering a greater level of support from a range of companies. In theory, it will make download functionality consistent across all retailers. (Rovi is also looking at MPEG-DASH to fit with its own ABRS technology, it said.) While 96% of UK consumers have internet access, the online movie

market is still in its infancy. Only 5% are watching films digitally but this is growing fast, with the market value expected to increase from £138 million (EUR163m) in 2011 to some £450 million by 2014. The company is confident it can play a large part in accelerating this adoption curve. It thinks it can do so through a combination of content, technology and customer service. “None of our existing competitors provide everything that people want and we believe we provide all the answers,” said Niall O’Keeffe, KnowHow development director. Dixons Retail (part of the same chain) sells 4.5 million connected devices annually and talks to 19 million customers across its various channels. These numbers make O’Keeffe confident that service take-up will be “substantial” although he wouldn’t disclose precise targets. Moreover, he argued that the move will benefit the industry by broadening the market as a whole. KnowHow Movies comes up against payTV offerings and a range of other subscription retailer-backed initiatives such as HMV’s hmvondemand, Amazon’s LoveFilm and Tesco’s Blinkbox, as well as the recently launched Netflix. Amazon, incidentally, just announced it would buy the remaining 58% of LoveFilm, which operates in the UK, Germany, Sweden and Denmark with 2.3 million subscribers.

DVB to extend CI+ in 2012 The DVB is looking to complete its work on the technical specification for the latest version of the CI Plus standard this year, having begun development in December. Additional functionality specified in the requirements for v1.4 include dual-tuner support, IP delivered content, extensions of the

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browser to make use of broadband connectivity and supporting watermarking and transcoding functions within the module. While already possible technically, the current spec prohibits any manipulation of the content by the module beyond decryption, according to DVB.

Beyond v1.4, there are currently discussions over a new form factor for CI Plus given that the original PCMCIA format has been dropped by the PC industry. “This does not necessarily invalidate its continued use for CI Plus, but it is recognised that here are now alternatives,” DVB said in its bulletin.

Channel 4 launches second screen application Channel 4 will be the first terrestrial broadcaster in the UK to launch a mobile application that reacts to watermarked audio triggers within a broadcast to unlock exclusive content. Viewers with the Channel 4 app, which is available at £1.49 on iOS devices, will be able to listen in on episodes of Facejacker starting this Spring to unlock features such as soundboards, a booth to turn viewers into characters in the show, videos and ringtones. Digital watermarks are inaudible to the human ear but detectable by mobile devices, forcing a piece of content to be unlocked in the app. Each broadcast episode will feature two distinct codes, unlocking two new pieces of content. The watermarks can also be found in other Facejacker content, such as trails, 4oD episodes and in the Facejacker DVD. Viewers will be ancouraged to track down the audio to unlock all the bonus material which includes additional ringtones, ‘Facejack Booth’ masks and up to 30 minutes of original, unseen clips and behind-thescenes video. The move is part of the company’s strategy for deeper audience engagement, providing them with more opportunities to interact with programmes. The channel is using Cambdridge-based

Intrasonics software for the new service. Channel 4 mentioned at a recent conference on dual screen TV that it was looking at so-called automatic device synchronisation technology, which involves an audio signal (sometimes watermarked) embedded within the television broadcast that the companion device can recognise to display more information in real-time. This is part of a clear trend in the broadcast space where media companies are looking to exploit the synergies of companion devices to augment their content. The FX channel recently launched a companion app for the popular

Walking Dead series, which marked the first commercial use of digital audio watermarking technology in a second screen application in the UK.

Studios unveil new standard for digital content Warner Bros and Twentieth Century Fox are part of a new initiative that aims to allow consumers to easily organise, download, store and move HD content across multiple devices. The project, currently going under the working title of Project Phenix, is being developed by the newly formed Secure Content Storage Association (SCSA), together with storage firms SanDisk and Western Digital. The alliance will create and license solutions that secure HD and other premium copyrightprotected content in up to full 1080p quality on local and portable hard drives, including flash memory products including USB flash drives, SD cards and solid state disk drives. Once content is downloaded to a hard drive or flash memory product, it could then be accessed, online or

Your way

offline, on any SCSA-enabled device such as a connected TV, Blu-ray player, tablet, mobile phone or game console, the SCSA said. The idea is that optimised content will then be made easily available for purchase via digital download, digital files bundled with physical media, kiosks in retail stores, or other means of secure digital delivery. “The device renders content up to ten times faster than over-the-top internet. We see Project Phenix as a key component of the emerging digital ecosystem,” said Mike Dunn, president of Twentieth Century Fox Home Entertainment. In addition to local storage, the content will also be backed up via the UltraViolet industry standard as well as other cloud-based services, the SCSA added.

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News news in brief 4.4M Freeview devices sold UK digital TV platform Freeview added 1.3m HD televisions and set-top boxes in Q4 2011, taking the total number of units sold to 4.4m at year’s end. Freeview estimates that of the 2.6m smart TVs sold across the UK, more than 80% are Freeview HD sets. The number of UK homes with Freeview on their main TV is currently 10.6m. According to measurement company BARB, two million homes are actively using the service, which launched 18 months ago. Around 81% of the country can receive a Freeview HD signal, which should grow to 85% by the time of the Olympic Games in London this summer, and 100% coverage when the digital switchover completes in October. The focus will then likely switch to how the platform evolves with the upcoming YouView launch. Satellite leads in Germany Satellite TV has reached a milestone in Germany where more viewers now watch TV via DTH than cable, according to SES. At the end of 2011, 17.5m households were watching TV via satellite (5.9m in HD), up 900,000 from the previous year, of which 90% were digital, leaving 1.8m still analogue. These homes have three months left to make the move to digital as DSO approaches. At the same time, SES claims cable lost about 900,000 households last year and reduced its CATV to 17.3m. Digital terrestrial TV lost 180,000 households, bringing its coverage down to 1.8m. IPTV, meanwhile, has continued to grow, albeit from a lower base, with an increase of 330,000 households, to exceed the million-mark; it now reaches 1.3m homes.

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March-April 2012

DVD Forum calls it a day as UltraViolet makes inroads The DVD Forum is soon to enter a winding down phase with current technical groups to be closed following the body’s latest members meeting. At the 56th Steering Committee meeting held at the end of January, the 100-member industry body, originally established in 1997 to launch the DVD format, will formally enter “a reduced activity mode” from 1 April. The Forum “will be reactivated as necessary to address issues that may arise through the end of its chartered duration in August 2017,” DVD Intelligence reports. The 15th – and likely last – General Meeting of the Forum, was scheduled to take place in Tokyo on 1 March. Of the two options put up for discussion – “termination”

or “sleeping” – the members chose the latter, the report said. Earlier this week, an analyst note from Morgan Stanley described the home video business, for many years a major cash cow for Hollywood’s movie studios, as “an area of concern”. Noting that video rental spending surpassed video sales in 2011 for the first time since 1998, this trend will likely to continue due the economy, convenience of kiosk and subscription channels, and an overall maturation of physical DVDs. The studios’ efforts to promote downloads and streaming through their own distribution channels won’t bear fruit for a while, the report said. The studio-backed UltraViolet (UV) initiative has achieved a milestone of 800,000 household accounts in the US, according to IHS

Screen Digest, meanwhile. For each account established, consumers have redeemed digital rights to 1.25 titles, meaning US consumers now have added more than one million films to their digital film collections via UV-enabled discs. Some 19 million digital film files were sold during 2011 by electronic sell-through (EST) vendors like iTunes, Xbox Live and Vudu, meaning that UV could encourage consumers to buy more movies, the analysts said. Echoing Morgan Stanley’s findings, the rental business has dramatically outperformed the purchasing segment in recent years, with the number of US digital rentals amounting to more than three times the total for digital purchases in 2011, IHS added.

Home gateways to triple by 2015 Home multimedia gateways are expected to become the new hub of the digital living room when they take over from set-top boxes, with the market projected to triple from 2012 to 2015, according to IHS Screen Digest. Shipments of gateways and thin client boxes that act as receivers are minute at present, but their numbers will grow dramatically as cable and wireless operators begin to roll out services offering broader connectivity and seamless access, and are projected to reach 4.2 million units in 2012, up from just 345,000 last year and a mere 1,000 in 2010. Shipments then are expected to continue to climb

quickly during the next two years — rising to 6.7 million units in 2013, to 10.4 million in 2014 and to 12.6 million by 2015. “Through the residential gateway, a set-top box acting as a central server can be connected to any number of thin client boxes — and eventually to other media devices being used in the home, like smartphones or tablets — in order to deliver content. As such, gateways can become the nucleus of the digital living room, where consumers have seamless access to material from a wide range of sources,” said Jordan Selburn, senior principal analyst for consumer platforms at IHS. If the current set-top box market is

any indication, countries like Brazil, Russia, India and China could propel the gateway space during the latter part of the decade and beyond, IHS predicts. In North America, many of the leading operators are moving to the server/client model, with the “Whole Home DVR” service offered by DirecTV, Comcast and others as the first step. The key component within the residential gateway box — the media processor, which converts media into the right format and resolution — is now ready for prime time, IHS believes, with companies like Intel, Broadcom and STMicroelectronics launching products aimed at the gateway and client markets.

IHS iSuppli Figure: Worldwide Residential Gateway and Thin Client Shipment Forecast Millions of Units

2011 0.3

2012 4.2

Source: IHS iSuppli Research, February 2012

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2013 6.7

2014 10.4

2015 12.6

News

Real money for HTS to go beyond broadband access High Throughput Satellites (HTS) go beyond mere broadband access services, and the industry is beginning to open its eyes to a number of other possible applications of these powerful birds that stand to deliver serious revenues, according to NSR Research. A good example of potential new revenue streams came in December when Eutelsat reported that mobile facilities company Jackshoot was the first to deliver TV rushes over its KA-SAT satellite for the UK’s Channel 4 Live and Lost with Blackberry programme. NSR foresees similar deals coming up that will eat up total capacity on the KA-SAT and other HTS. Beyond traditional contribution & occasional use services, NSR sees promise in sectors including corporate VSAT, backhaul, commercial mobility, government/ military services, and even most interestingly for DTH and video distribution, which will account for almost 20% of the HTS nonbroadband access capacity this year, second only to enterprise data applications. Nevertheless, satellite broadband access will dominate the use of capacity on the growing number

of HTS entering the market in the coming years and account for nearly 90% of the expected leased capacity forecast for 2020. But there is real demand for HTS capacity in other applications and NSR expects that these first drops will grow into a steady stream in the coming ten years. Equally important, NSR believes these other applications will generate much higher revenues per leased bit than broadband access services. The 10% of the global base of leased HTS capacity in 2020 will likely account for 40 to 50% of the revenues generated on HTS capacity, which will accumulate into a real

news in brief

and significant revenue stream for operators. • Euroconsult estimates that a total of 1,145 satellites will be built for launch from 2011 to 2020, up 51% than the previous decade, with almost three quarters attributable to government demand. Commercially, 203 comms satellites with a market value of $50 billion will be launched into GEO orbit and a further 165 birds will be built and launched into medium and low Earth orbits. Euroconsult also expects the value of satellite capacity leasing to grow at 7% over the next ten years.

Global HTS Capacity Demand: Non-Broadband Access Applications, 2012

Enterprise Data 44.6%

Commercial Mobility 16.9%

Gov/Mil 13.0%

Contribution &

OUTV 1.7%

DTH 19.0%

Distribution 4.8%

Source: NSR

TV advertisers look to multi-screen A joint Association of National Advertisers (ANA) and Forrester Research survey of more than 100 US advertisers has found a renewed belief in the effectiveness of television advertising, especially with new technologies and their role in the form of the future of addressable advertising, smart TVs and second screen advertising. Compared to 2010, the number of respondents who believe TV ads have become more effective in the past two years has tripled.

Respondents particularly expressed a growing confidence in set-top box data that has the potential for TV ads to be targeted at specific customer groups. Nearly three-quarters of marketers expressed a strong interest in targeting their advertising to addressable audiences, making use of this new behavioural and demographic data to place television ads. They believe the quality and accuracy of set-top-box data will improve in the next few years.

Nearly half of respondents are further testing or planning to test advanced TV ad placements in the next 12 months via platforms such as video on connected TVs. With the growth of second screens, 18% of respondents have already implemented synchronised ads, and another 31% will try out this strategy this year. TV ad spending will account for 47% of media budgets, which are for the most part expected to remain stable in 2012.

Video surges on connected devices Facebook users on average share ten times more video than Twitter users, according to Ooyala’s latest quarterly Video Index report, which also found that video plays on tablets, mobile devices and connected TVs nearly doubled in Q4 over the previous quarter. Tablet viewers continue to be far more engaged than desktop viewers, being 45% more likely to complete at least 75% of videos played. Video plays on Google TV also saw strong growth, increasing by 91% in the quarter. VoD up 50% in France Sales of DVD and Blu-ray discs fell 9% in 2011 to an estimated EUR1.26 billion in France, while revenues from video-on-demand transactions rose more than 50% to EUR230 million. According to figures from SEVN and market researcher GFK, Blu-ray sales did rise 20% last year, both in value and volume, to ten million units sold, to now account for 16% (EUR210m) of total turnover of physical media. SEVN attributes the overall video revenue fall to continually high levels of piracy. Retrans grows in US An SNL Kagan study analysing Q3 2011 broadcast TV retransmission revenue shows a group of 16 US TV station owners grew their average monthly retransmission fees per multi-channel subscriber by 46.8% between 2009 and 2011 to reach an estimated 33 cents. Univision Communications came first at 61 cents, followed by Sinclair Broadcast Group. SNL anticipates that fees will remain on an upward trend, thanks to valuable programming like the Olympic Games.

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March-April 2012

11

Analyst corner

Show me the money: brand power premium brands is at a level that boosts these channels to the top earning slots. Mixed among them are core pay-TV properties like Disney Channel and Discovery Channel. MTV — Europe’s most widely distributed channel brand — just makes the top ten. The mix in Eastern Europe is very different. The top earning brands are the key international power brands that can be considered drivers for pay-TV in less mature markets. While movie and sport channels are still crucial to the pay-TV strategy in these markets, the relative lower uptake in these less mature markets mean that they fall lower down the pecking order. In addition, among these genres, it is local premium operations that make the top ten rather than the better-known multinational European sports and movie brands. Scandinavian operator Viasat has cornered the market in heavily localised premium sport channels in Central and Eastern Europe, while HBO — a well known channel brand in the US — has until its recent Dutch launch focused its European presence solely on Central and Eastern Europe. As these markets continue to mature, the mix of channel brands that make the most money will evolve with movie and sports moving up the rank. And it is at this point that the influence of absolute reach begins to reassert its importance: their ultimate power will relate to the platform partnership decisions that they have made.

There is currently a disconnect between distribution and income for European channel brands but absolute reach will ultimately rule...

D

istribution is key (see last month’s column in CSI), but when it comes to the business of channels, the money is what really matters. To some degree the money that a channel can make is a function of its distribution, but the relationship is not actually as simple as that.

Top earning brands: Western Europe Channel Sky Sports 1 ESPN Sky Sports 2 Sky Sports 1 HD Disney Channel Discovery Channel Sky Sports 2 HD National Geographic Channel Disney Cinemagic MTV Top earning brands: Eastern Europe

For pay-TV channels, carriage/affiliate income is generally the primary source of money with advertising making up the rest of the pie. Affiliate revenue ratchets up with the growth of the platform on which a channel is carried, being based on a per-subscriber fee. Advertising is, of course, partially correlated with reach. But any linearity in the relationship is lost when the other key factors that impact the channel business are taken into account. Broadly these are: maturity of the market, maturity of the channel’s own local business, Group brand power of the channel and BSkyB specific market strategies of the Disney channel group. Thanks to the complexity of these BSkyB interacting factors, there is a BSkyB disconnect between distribution and Disney income, with the list of most widely distributed European channel Discovery brands differing from the highest BSkyB income brands. By extension, the Fox relative mix of top earning brands in Disney different countries and regions can tell us a lot about the market in Viacom which those brands operate.

Channel

Group

Discovery Channel

Discovery

National Geographic Channel

Fox

Disney Channel

Disney

Animal Planet

Discovery

TV 1000

Viasat

Viasat Sport

Viasat

MTV

Viacom

Sport 1

Chello

HBO

Warner

TV 1000 Russkoe Kino

Viasat

12 March-April 2012

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Different mix in different regions While the brands that fill our top slots for money may come as no surprise — many, like Discovery and Disney, are the key power brands in Europe — the relative mix between Western Europe and Eastern Europe is interesting. In the West, where pay-TV markets are generally mature and in a phase of low growth, sports and movies are key to the premium experience and the uptake of

Guy Bisson is research director, television, at IHS Screen Digest. In this regular column, he gives CSI readers exclusive insight from the company’s new channel strategies service

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OTT content of years are expanding overseas. Netflix lost 800,000 subscribers in the third quarter of 2011 when it raised its prices, then gained 600,000 the following quarter. It has a 55% market share of the US VoD rental market, according to NPD Group. It will be interesting to see how it fares in the UK and Ireland, following its launch in these countries in January 2012. Netflix CEO Reed Hastings told the Daily Telegraph that Netflix sees BSkyB’s movie channels as its principal commercial rivals in the UK; and criticised the user experience at Amazon’s LOVEFiLM streaming service. But his comments touch on a fundamental question that

Compelling content is widely perceived as the biggest hurdle faced by over-the-top services. How can this gap be bridged and how will this impact pay TV, asks David Adams

Mind the gap…

A

survey by Informa found that the industry sees content issues as the main roadblock holding back over-the-top. Indeed, 99% of respondents believed that rights holders withholding content from devices will slow down OTT growth. The debate however has shifted not to if OTT content could change the shape of the mainstream broadcasting industry, but to exactly how it will do so. The amount of video viewed online continues to rise. In December 2011, 182 million US internet users watched an average of 23.2 hours, up from 21.1 hours in October, according to research from comScore. In Germany, in October, internet users were watching an average of eight online videos each day for 50 minutes in total, according to comScore; up from six videos and 34 minutes a year earlier. That growth must be a worry, on some level, for incumbent TV service operators and for

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March-April 2012

content owners too, particularly considering the challenges of securing content in the OTT environment. Everyone working in TV or film is also haunted by what has happened to the music industry in the past ten years. And broadcasters could also be forgiven for being unnerved by the fact that OTT service providers like Netflix and Hulu are investing in original content. Meanwhile, US pay TV subscriber numbers will fall by 200,000 during 2012, according to a Credit Suisse Securities report written in late 2011. One could argue the US is a special case: a combination of commercial, technical and economic factors have encouraged cord-cutting among pay TV subscribers. Cable subscriptions also tend to be more expensive in the US than elsewhere. But some of those factors, including the spread of high speed broadband and of connected devices and TVs, are present in many other markets too, and the debate has spread to Europe too. Some of the OTT providers that took the US cable industry by surprise over the past couple

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will surely determine the extent to which OTT services influence the future of TV: which is more important in attracting consumers, the user experience or the content offered? Netflix supports a wide range of connected devices, delivers a personalised experience and is integrated with Facebook. But many independent observers and consumers feel that the content on offer doesn’t match that at LOVEFiLM or Sky Movies. User experience vs content Last year, a report from Fitch Ratings declared that OTT services will need to offer more compelling content if they are to compete with incumbent cable and satellite services. But it also noted that content owners would be unlikely to strike deals with OTT providers if this undermined existing arrangements with satellite and cable operators. Of course, incumbent operators (most recently Sky, targeting the 13 million UK households who do not subscribe to pay TV) are launching OTT services of their own too, in part because they can be used to nudge consumers towards in-network services, or to persuade existing subscribers to keep or extend their subscriptions. “Incumbents now see OTT as an important part of their strategies,” says Steve Plunkett, director of technology and innovation at Red Bee Media. “There’s an expectation in markets like the UK, driven by catch up TV and the BBC iPlayer, that content will be available to view on demand, on multiple devices. So operators have developed partnerships with industry and invested in new technology skills.” There may be another challenge emerging from a different direction. Connected TVs will account

OTT content for more than 80% of total TV shipments by 2015, up from 27% in 2011, according to Futuresource Consulting. Operators have seen this coming: in January Verizon became the latest to sign a deal that uses connected devices to cut the set-top box out of the picture, streaming VoD titles and linear TV channels direct to LG connected TVs and Blu-ray players. Verizon’s FiOS TV app for LG will launch in mid-2012, part of a broader strategy to stream content to connected devices, as it already does to Microsoft’s Xbox 360. But Sony is planning an IPTV OTT service of its own, according to an interview its CEO Sir Howard Stringer gave The Wall Street Journal in November 2011. If LG or other manufacturers come to form a more active part of the value chain, what’s to stop them doing just that? “The major change in the past ten years is the rise of device manufacturers like Samsung and Apple taking a big part of the value chain,” says Michael Lantz, CEO at connected TV and IPTV app provider Accedo. “That’s a major trend, especially since certain companies have so much money. They can, if they want to, become an OTT operator, licensing TV channels and on demand content.” That’s not to say that such a service

would necessarily succeed – Apple, Google and Microsoft have all been trying to work out a way of bringing their TV ventures closer to the mainstream for a while now, without quite managing to do so. In October 2011, Dan Saunders, head of content services at Samsung Electronics Europe, told an IHS Screen Digest conference that his company did not see itself as a rival to incumbent operators, but as the provider of OTT services through connected devices that would complement the operators’ offerings. CE manufacturers could not use content as a differentiator, he said: the user experience would be key. Second screen and content discovery This is a problem which will be complicated, but perhaps also solved, by the use of ‘second screen’ technologies and services. One major trend of the past 12 months has been CE manufacturers, operators and technology vendors looking at ways of exploiting a second screen – usually a tablet – in the living room, to enhance the user experience. But despite the appearance of some promising solutions this still doesn’t really nail the navigation problem. For the consumer a choice

UK streaming wars (Source: Oliver and Ohlbaum Associates)

between a few dozen channels and maybe a reasonably well-organised collection of VoD titles is one thing; trying to pick a path through thousands of pieces of programming available OTT is quite another. “It’s such a fragmented market that how users find content is one of the big barriers to growth,” says Jake Ward, business development director at streaming solutions specialist Groovy Gecko. “So operators, whoever they might be, don’t just have to pay for content rights, they have to work out how you get people to discover the content.” That process will surely also have to incorporate some elements that replicate one of the key pleasures of TV viewing. “You have to provide intelligent technology yet somehow also provide the serendipity that is part of the TV experience,” says Red Bee’s Plunkett. He advocates a solution like the company’s RedDiscover, a discovery platform incorporating search and recommendations and links into social media. “So as well as using very good recommendation algorithms you can have an EPG that overlays conversations on Twitter, including about content coming up, or that was shown yesterday. You can do similar things with Facebook.” Being able to offer viewers simple and straightforward navigation and content discovery will be a crucial differentiator, agrees Niall Duffy, managing director at the consultancy Mediasmiths. “The easier technology is to use the more people will use it,” he says. “If the platform experience is good, the content will come. Studios have been historically slow to see the benefit of new platforms, but now they see that the widest possible distribution of content is going to get them the most money.” Linear scheduling still rules But even if an OTT provider comes up with a good answer to the navigation problem there’s another fundamental reason why OTT is likely to remain in the background. “The reality is that on demand viewing, even in homes that have had it for a long time, is quite limited,” says David Cockram, senior consultant, Oliver and Ohlbaum Associates. “Even in homes that have had it for a while it only accounts for about 10% of viewing. In terms of viewing across the UK, there are 80 billion hours of TV and if you take all the various on demand platforms only one to two per cent is viewed on demand. Even in homes with a PVR only around 15% of viewing is time shift TV. Our

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March-April 2012

15

OTT content Europe OTT 2015 Pay OTT on tablet, PC, TV other (4.6m)

Pay TV through hybrid set tops (7.2m)

Free to air hybrid devices (29.1m) view is that the amount of viewing of on demand content will reach no more than 10% to 20% in the medium term. Viewing is driven by linear broadcasting schedules.” Even if this changes significantly and if technical barriers related to broadband speed and network capacity can be overcome, many believe, like Yonatan Sela, vice-president, marketing at Tvinci, which develops OTT services for pay TV operators, that incumbent operators are well placed to benefit. “The power of the billing relationship that operators have, the services they offer and the content they’re able to get mean they will still play a main role for the mass market,” says Sela. Any new OTT service backed by a CE manufacturer, a technology giant or anyone else would also still face the challenge of content acquisition, says Pascal Portelli, senior vicepresident, solution strategy and portfolio management for the connected home at Technicolor. “It’s possible that at some point in future massive amounts of money could be put on the table by people with deep pockets to grab compelling content, but probably the major content owners would think twice about doing that, because they have a lot of stock with their conventional partners,” he says. “Signing an exclusive deal with Apple or Google would be a tough call to make for a content owner, to forgo the big revenues they get with the big cable channels.” Joris Evers, director of corporate communications at Netflix, is keen to push the message that Netflix is not, in fact, competing with pay TV, preferring instead to emphasise the way his company’s proposition is a good fit for the TV everywhere concept and talking about the

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April-March 2012

(Source: Rethink Research)

partnerships it has with other companies with which it is already (or might soon be) competing. “We’re on Apple TV, the iPad, the iPhone, we’re on the Microsoft Xbox, we’re partners with Sony on the PS3, we’re on the Amazon Kindle,” he says. “Our model is very simple, we want to be on every device, every screen that’s relevant to our subscribers and we offer a low price point. The great differentiator we have is the personalisation in our solution, based on what Netflix has learned about what you watch.” But the differences between the US TV landscape and markets in Europe and elsewhere will be a factor that determines Netflix’s success or failure in future, says Sela at Tvinci. “When Netflix started most operators didn’t believe how strong it could become,” he says. “I think after the success of Netflix in the US pay TV operators have changed the way they perceive OTT and how serious a threat it is. I don’t think Netflix can have the same impact in Europe as in the US, because operators in Europe are better prepared.” And even if OTT is already altering the shape of the broadcast industry, Lantz believes it will be absorbed by existing players. “In ten years I don’t think the term OTT will be relevant any more,” he says. “As soon as there are good enough devices and legal agreements all service providers will move to an OTT framework.” Andy Hooper, director, converged experiences, EMEA at Motorola Mobility, also believes existing operators will turn these technologies to their advantage, creating portal-type interfaces for consumers through which they will discover content and access interactive services. “That app will become hugely powerful: you will have a huge amount of information being gathered from that subscriber’s behaviour compared to what happens

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with conventional TV,” he says. “The amount of recommendations you can push through is much greater. For an operator, if someone else is doing that, not only are you missing out on the subscriber information, you are missing out on a huge advertising opportunity too.” In the end, it seems, OTT will have a big influence and might one day become the primary content delivery mechanism, but there are lots of reasons for operators of in-network services to be optimistic about their futures. “The impact OTT has on pay TV operators is going to be relatively limited, for the time being,” says Hooper. “It’s still live TV, across demographics, which drives TV viewing. The extent to which OTT services can cannibalise that will depend on the extent to which they can be seamlessly integrated into conventional TV viewing. The main screen TV is going to be there for a while yet.”

And the gloves are off... Netflix has well and truly shaken up the UK market and heated up competition. “The heavy bets they have laid at the table in terms of purchasing content and signing up partners, indicate that they are here for the long haul, and looking to land a knockout blow to both incumbents,” says Jeremy Michaels of Oliver and Ohlbaum Associates. The company has signed deals with MGM, Lionsgate and Momentum, ensuring first payTV window title availability on a par with Sky Movies and its US studio arrangements – traditionally within six months of the DVD release in the UK. “Add this to their existing US studio deals, and a host of other partners that include Miramax, All3Media, BBC Worldwide, Channel 4 and Viacom, and from a content perspective they could be considered to have the box seat,” adds Michaels. It has also started commissioning original content. LoveFilm responded to the launch with its own content deals, with exclusive agreements with the likes of ‘Twilight’ franchise owners eOne, and StudioCanal. Other new streaming deal include Disney UK, under which subscription video-ondemand service, ABC TV On Demand, will offer LoveFilm members access to ABC Studios’ library of network and cable series, including all six seasons of Lost. Programmes such as Desperate Housewives, Grey’s Anatomy and Ghost Whisperer will be available on-demand later in the year. The much anticipated YouView service should also finally launch this year, which will further stoke the fires for the digital consumer, although the jury is still out.

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YouTube

YouTube: friend or foe to the broadcaster? What does YouTube’s continued growth and development mean for the TV industry, asks David Adams

T

he numbers are incredible: 48 hours of video are uploaded to YouTube every minute, meaning eight years of content go onto the site every day. There are over three billion views daily on a seemingly infinite range of material. The site gets 800 million unique users each month. The number of display advertisers increased tenfold in 2011. Year on year revenues have doubled every year since 2009. It’s difficult to tell whether this Google subsidiary is actually profitable, but as Google owns it and there are tens of billions of dollars in cash and investments at its disposal, one is tempted to ask, at this stage, whether there’s much point asking that question anyway. But one question that is worth asking is what the site’s continued growth and development means for the TV industry? The average amount of time users spend watching online video and the average length of content watched are both increasing. People all over the world are spending more and more time on YouTube. Might that be bad news for TV services in general? In December 2011, YouTube rolled out a revamped site: a new homepage, new versions of its customisation and personal ‘channel’-building capabilities, and enhanced integration with social networks. This followed the announcement of its first 96 partner ‘channels’ in October. They include a Wall Street Journal lifestyle channel, another dedicated to the gaming website Machinima, sports and music programming, channels covering subjects including astronomy, pets, fashion, motoring and parenthood; and the satirical brilliance of The Onion. Further channels announced since (there are now 99) include a news and education channel from the Reuters agency. There are no partner channels, as yet, run by

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March-April 2012

mainstream broadcasters. But many content creators and owners have softened their stance towards the site in recent years: you can now watch thousands of movies there, many in HD. While the money that comes from fees for paidfor content is still a drop in the ocean compared to the $1 billion or so the company earned through advertising sales in 2011, revenues from these sources are growing. The site doesn’t do a great deal of live broadcasting, but when it does, as for the British royal wedding in April 2011, the numbers are again impressive – considering dozens of TV networks were covering the event live, it’s notable that 72 million in 188 countries watched on YouTube. It is also investing, directly and indirectly in some original content. But still, the question remains, what is YouTube really trying to do? Some industry observers have dismissed the channels initiative as a marketing ploy to convince investors that the site has ‘matured’. “I don’t understand the re-launch,” says Jake Ward, business development director at streaming solutions specialist Groovy Gecko. “They’ve got 90 to 100 channels, but I don’t understand where it fits in. They obviously want to be a content aggregator, but I can’t imagine pay per view ever being a massive revenue stream for them.” Niall Duffy, managing director at the

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consultancy Mediasmiths, thinks it’s wrong to treat YouTube as TV. “I think it’s an entertainment form of Wikipedia. It’s much more about clips. Where broadcasters have been smart is in putting clips out to YouTube to drive their sales.” Michael Lantz, CEO at connected TV and IPTV app provider Accedo, also thinks YouTube should be regarded by broadcasters as a kind of international sales display facility. “YouTube won’t be a competitor for them, but a platform where they can put their channels out to market and hopefully generate revenues,” he says. On a payTV front, YouTube launched its movie rental service in the UK late last summer, adding 1,000 titles from Hollywood and British studios, following similar launches in the US and Canada earlier in 2011. YouTube Movie Extras will offer blockbusters like The Dark Knight, to new releases and archive titles. Films must be viewed 48 hours after the start, across multiple devices. RTL’s stance Oliver Herrgesell is executive VP of corporate communications, public affairs and marketing at Luxembourg-based broadcaster RTL Group. comScore survey figures from October 2011 showed that YouTube accounted for 70% of online video viewing in Germany. Should RTL be concerned? “TV should not be anxious,” suggests Herrgesell. “YouTube delivers user generated content, but will this replace existing channels?

“Channel 4 now uploads material to YouTube at the same time it loads it onto its 4oD catch-up TV website.”

YouTube

material to YouTube at the same time it loads it onto its 4oD catch-up TV website. “This strategic partnership marked the first time that a broadcaster anywhere in the world made a comprehensive catch-up schedule available on YouTube, providing Channel 4 with additional advertising inventory and reach,” says Channel 4 spokesperson Jenny Cummins. “Channel 4 has branded presence on YouTube and can sell advertising around its content on the site.

Unlikely. TV is the leading medium and will be for a long time to come.” He seems reluctant to accept that the comScore online video findings are particularly significant for the broadcasting industry. “Broadcasters target more than just YouTube users,” he says. “One has to look at the details.” In any case, he points out, average viewing time for linear TV also rises consistently year on year. In 2011 in Germany, average viewing time per person per day was 225 minutes, up from 223 minutes in 2010. “We won’t become complacent, but the facts are reassuring,” he says. “In times of fragmentation people trust strong [broadcasting] brands. People want to lean back, put on the remote control and see what their favourite channels present. This is a fundamental difference from what YouTube is offering, so far at least,” he adds. Herrgesell would not comment on possible plans to build a relationship with YouTube similar to that created by the site with Channel 4 (see below), but it is possible that RTL Group might use the platform this way, if that is what its viewers want: “The strategy is very simple: RTL Group will put its content and brands wherever the viewers want them. But the TV industry

should not feel threatened: the future of TV will be TV.” A niche model for millions For a company that does so much to let people express themselves, YouTube has an interesting attitude towards speaking to the press about strategy. I can ask a spokesperson questions but am not allowed to quote her answers directly and am encouraged instead to quote from the rather bland official YouTube blog. However, I can tell you that the company believes its success is due in large part to two trends: the push towards niche content; and the growth in numbers of connected devices. These factors make it possible for the site to offer visitors access to niche contemporary and long tail content that would be unlikely to find a home on conventional broadcast platforms, but can reach millions worldwide through YouTube in an ad-supported model. This content complements, rather than competes with, existing TV services. Furthermore, although most broadcasters may not yet be setting up YouTube channels, some have developed content sharing partnerships with the site. For example, in the UK, following a deal struck in January 2010, Channel 4 now uploads

“The deal offers value for Channel 4 and its independent production partners, generating additional revenue to invest in creating high quality, original content. The deal complements our own 4oD offering – where catch-up on recent content is most popular – archive is more popular on YouTube. Increasing the availability of 4oD on multiple platforms remains a key tenet of Channel 4’s strategy, ensuring our content is in the places that users want to watch it.” Other broadcasters have found other ways to make the site work for them. ITV is one of many that upload clips or trailers from/for popular shows. “When they had Susan Boyle on Britain’s Got Talent and then there were millions of hits on YouTube, ITV lost out on a pretty sizeable chunk of video advertising,” says Groovy Gecko’s Ward. “They realised the best way to do this was to upload content then clamp down on other people uploading ITV content for fair use. They’ve integrated what they do well with a social media campaign: YouTube is absolutely ideal for that.” Might any of this change in future? “I would imagine they would like to try some premium subscription models,” notes Accedo’s Lantz. “So you could choose from a number of different tiers, maybe with a premium tier for some sport. Then the long tail content free of charge.” YouTube tells CSI there are no plans for any radical changes of direction any time soon and that the site will remain, above all, guided by its users. They are, after all, largely beyond the company’s control. Perhaps one day something will come along that supersedes it, but until then broadcasters and content creators are probably best off trying to find a way to make the power and reach of YouTube work for them.

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March-April 2012

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TV gaming

Get ready for the gaming revolution The world is perched on the brink of a gaming revolution which will see high spec console games and smartphoneinspired apps delivered direct to users’ TV screens. But how can payTV carve out a niche in this highly competitive sector? Stephen Cousins reports

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ixteen days. That’s how long it took the shoot ‘em up Call of Duty: Modern Warfare 3 to rack up sales of $1 billion last November. That’s one day faster than Avatar, the highest grossing movie ever made. If you ever doubted the influence of video gaming on the masses, here was the proof that even Hollywood couldn’t ignore. As movie execs continue to ponder the best way to move forward in the digital age, the video games industry is striding ahead; the sector was worth $65 billion in June 2011 and continues to open up new markets across different age groups, countries and genders. The good news for payTV operators is that now is the ideal time to tap into this rapidly evolving sector, thanks to pioneering new technologies and payment models. Dual-core processors embedded into the latest generation of set-top boxes (STBs) will enable more advanced gaming performance akin to that seen on the iPad, while cloud gaming services such as OnLive and Gaikai are able to deliver console-quality games via existing STB hardware. And where the typical £40 (EUR50) price tag for a console game might put off potential gamers, a new trend for low cost casual games on TV – already made popular on Apple and Android smartphones – will attract new users and open up new revenue streams. Is TV gaming serious business? Gaming has long been touted as a means of encouraging user ‘stickiness’ and now the

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industry’s big hitters are getting behind it and announcing plans for dedicated gaming services. France’s Bouygues Telecom will launch its Bbox cloud gaming service, powered by Playcast, in the spring; TV manufacturer LG has teamed up with Gaikai to integrate PC gaming into its smart TVs;

“Recent statistics from market research firm Park Associates suggest that 65% of connected TV users connect their devices to play games.” cable operator Numericable has launched several interactive game channels in partnership with games publisher Visiware, and in the UK, BT has won exclusive rights to bundle OnLive with its broadband service, simultaneously taking a 2.6% shareholding in the company. With Google TV and Apple TV also planning dedicated gaming services the industry is on the threshold of a new era that could pose a challenge even to console veterans Microsoft, Nintendo and Sony. “We believe games will be one of the key feature differentiators in 2013 and that over the next three to four years games will become as simple to access and enjoy on TV as films and

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music,” says Jasper Smith, chief executive at gaming provider PlayJam, which is currently working with CE makers to port its games distribution platform into high-end STBs. “There is a very high propensity for users

to play games on TV, for example recent statistics from market research firm Park Associates suggest that 65% of connected TV users connect their devices to play games,” he notes. Despite the hype, you might wonder what all the fuss it about, after all, pay-for-play TV games have been around for years without making a huge impact. However, technological innovations have opened up opportunities to vastly improve the user experience. As previous head of gaming at NTL during the late 1990s and current chief technologist at hybrid/OTT TV innovator Amino, Kevin Lingley has witnessed the transformation first hand: “Games like Tetris, quizzes and crosswords were very popular in their day, but now Apple has cracked an entirely new market for bite sized games costing around 69 pence to two pounds, which is attracting multi-million dollar publishers such as Electronic Arts. There’s a real opportunity for low-cost gaming on TV and web technologies such as 3D software webGL, HTML5 and Flash make it possible to port versions of popular mobile games like Angry Birds or Cut The Rope to TV,” he says. As CSI highlighted in our January-February issue, 2012 will see deployment of the first wave of Android OS-based STBs able to access the thousands of games and apps in Android Market. These quick to download games offer new opportunities for targeted advertising, in-game sponsorships and subscription services designed to convert game usage into revenue streams. iPhone and Android platforms also currently offer ‘freemium’ games, through which consumers avoid the upfront cost of a game, but accept advertising as part of the experience.

TV gaming Users then also pay for incremental in game ‘power-ups’ to attain new weapons, status, or access higher levels. Gaming via STBs and the cloud The biggest industry buzz surrounds the concept of cloud gaming, a third party service provided by the likes of OnLive or Gaikai, which allows users to stream HD console-quality videogames over the web without the need for specialised hardware or having to wait for games to download. The technology is being tested by various operators including BT, AT&T, SFR and others. Accessible by PC, smart TV or handheld devices, cloud gaming has particular relevance for pay-TV operators that want to provide quality games via existing legacy STBs which have lower CPU and RAM. It works by rendering the game at the server end then transmitting it to the STB as a compressed video stream. Users’ in-game movements are then relayed back as keystrokes and new video are transmitted to reflect this. “What’s held TV gaming back in the past has been the need to write apps for different makes and models of cable STBs,” says Dave McElhatten, SVP for studio and services at ActiveVideo, whose TAG gaming channel is

deployed on eight million screens from the cloud, including those of Cablevision. “Streaming games from the cloud benefits operators because games can be written once and delivered to every STB, which eliminates the need for lengthy writing and test cycles and speeds time to market,” he says. However, critics have warned that the service can suck bandwidth and suffers from lag issues. Gaikai founder and CEO David Perry also recently admitted that current TVs are not suitable for its platform because of in-built input latency – and if getting access to games means buying a new TV, many users will be put off. As such, investment in next generation STB hardware could make more sense for service providers. The increasing processing power and graphical capabilities of STBs makes it possible to execute high-end games from the box itself, rather than streaming them over the cloud. “This is better for operators because it reduces server CapEx and bandwidth use,” argues Yann Courqueux, VP of marketing and business development at IPTV technology provider NetGem. “Economically speaking, as future STBs gain the power and graphical capabilities, payTV operators’ incremental costs to offer games subscription services will become negligible.

Operators already have the IP infrastructure to offer networked gaming so all-in-all gaming will translate to higher revenues and lower churn rates with no additional operational or upgrade costs,” he says. PlayJam is currently in the process of porting its smart TV gaming platform to the next-gen STB market and is working with chipset manufacturers such as Broadcom, ST, Marvell and UK and US operators to make it happen. From casual games to a more immersive experience TV gaming has long been hindered by the limitations of legacy remote controls, but developments in gesture and voice-responsive controllers will vastly improve the user experience (UX). Several announcements at CES in January show the direction industry is taking: Samsung has revealed that all of its smart TVs will support control by voice and hand gestures, tracked by a built-in camera. The firm PrimeSense, whose motion recognition technology is already installed inside the Xbox, demoed its reach UX system, which enables users to gesture-navigate screen content to create a much more “immersive” user

More advanced 3D games from Gakai

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TV gaming interface. The company is currently working with a dedicated development community to create motion-based games for the system. Meanwhile, next-generation STBs, which are effectively PCs inside, will have the ability to support a variety of game pads, and motion controllers similar to those used on Nintendo’s Wii such as Philips’ uWand and LG’s Magic remote. The key to games’ success on TV – whether smart or pay-TV - is how effectively the service is aligned with how users discover TV content. Cable and satellite operators have an obvious advantage because their content is accessed via a dedicated EPG, so inserting a channel for on demand games makes access easy and allows operators to preserve their ‘walled garden’. “On smart TV users are free to roam between menus and different OTT content, which is a real hindrance to discoverability,” says Piers HardingRolls, senior analyst and head of games at media research firm IHS Screen Digest. “Conversion rates will be much lower in the smart TV environment because people are also reluctant to keep giving their credit card details to different providers. Pay-TV’s aggregated billing structure, whereby games usage is simply added to an existing bill, is a real advantage,” he says. The one-stop-shop approach has proved successful for operators that deployed TAG Networks’s games-on-demand channel, which offers a range of casual and multi-player games. Each month, TAG is currently serving up over 15 million gaming sessions of more than 20 minutes each, which equates to five million hours per month to eight million screens. In the households that have registered player names, 42% play daily and 72% play weekly, a surprising 49% of users

Some operators are looking to technology that lets users control the TV through motion are female and 33% are in the valuable 18-34 yearold demographic. (PlayCast incidentally cites similar usage stats with its operator deployments in Europe and Asia and claims games can boost ARPU more than just superficially.) “Subscribers like the fact that it’s an actual channel in the cable operators’ TV lineup,” says ActiveVideo’s McElhatten. “Their eyes are on the operator’s brand, their hands are on the operator’s remote and their focus is on the

“In the near future we will be working with service providers to deliver advertising that leverages the relationship with these consumers, that’s where the next big opportunity is.” 22

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operator’s ‘walled garden’. They are not straying to OTT programming on their games consoles or their smartphones... In the near future we will be working with service providers to deliver advertising that leverages the relationship with these consumers, that’s where the next big opportunity is,” he says. Learning the lessons Although pay-TV appears well suited to running a games services, operators must get to grips with its specific demands. Technological requirements aside, the way people play games tends to be fickle, so operators must ensure content is regularly refreshed and invested in to keep users interested. Games content must also be licensed and revenue sharing arrangements could become complex with numerous parties involved. Lessons could be learnt from the more experienced console makers, which work closely with games developers and publishers to provide and promote games for their platforms. Get it right and the returns could be great and with improved network speeds, faster processors and more memory, TV could one day become the games console of the future.

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HTML5

Does the standards roulette wheel stop at HTML5? The over-the-top industry is rallying behind HTML5 as Flash fades away, says Philip Hunter

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V Everywhere needs global standards like never before in the broadcast industry, given that by definition it is supposed to connect content providers and operators with customers anywhere

on any device. In the past when services tended to be geographically confined within walled gardens, there was scope for proprietary systems, and for regional standards governing encoding and terrestrial transmission. In the emerging world of OTT and mobile TV, operators must be able to reach end-devices over which they have no control, over networks they may not manage, and have to cater for a variety of display and streaming environments, spanning multiple regions. In this world, broadcasters, operators and content owners alike are craving for common standards to reduce complexity and costs, while enabling them to reach as many devices as possible with acceptable Quality of Service (QoS), and support for the new features possible in OTT, such as interactivity and addressable advertising. Until recently, however, the standards roulette wheel has continued to spin and it has been unclear where the needle will stop. At one time it looked for all the world that Flash would emerge as the standard multimedia application platform for playing video on client devices, but that was before the advent of tablets and reckoned without the late Steve Jobs’ determination that Apple would not support it. This left Flash effectively marooned in the PC environment, with Apple and Microsoft for once in harmony promoting HTML5 as the standard for running video on all internet connected devices in principle.

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At the same time HbbTV, the hybrid initiative which also incorporates HTML5, is fast becoming the standard for hybrid broadcast combining linear services with online and mobile TV, in Europe at least. Finally we now have MPEGDASH emerging as a likely candidate to unify streaming as it has just been finally ratified. There

“The verdict on MPEG DASH and HbbTV globally is yet to be delivered but it is now seen as certain as it can be that HTML5 will be the universal platform for TV Everywhere.” are many gaps still to be filled bringing these standards together and embracing large smart TV screens fully within this emerging standardised environment, while also integrating security and DRMs. But while the final verdict on MPEG-DASH, and for HbbTV as a global standard has yet to be delivered, it is now seen as certain as it can be that HTML5 will be the universal platform for TV Everywhere. This is after even Adobe has

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abandoned support for its Flash platform and rallied behind HTML5 for smart TVs, as well as Android tablets and smart phones.

Flash is dead. Long live Flash Apple’s refusal to support it was a major factor in the demise of Flash, exacerbated by the impact of its iPad and iPhone in OTT, but there are also technical reasons why it has lost the fight to be a multiple device platform for video. “Flash applications running in a browser or the Flash environment are slower than native applications, and even if you are prepared to put up with that, there is the issue of the cost of supporting an application environment on many different devices,” says Andrew Glasspool, managing partner at Farncombe Consulting. “To support a variant for PCs is one thing, and maybe only one variant for Android, but the integration with every TV set and set top box is incremental work, and for currently a small market. The advantages of HTML5 are that it is open, unlike Flash, so supporting multiple devices with it is easier, and, again unlike Flash, it was created with mobile and portable devices in mind.” It is just worth noting that Flash is not dead and buried yet, and will continue to play a role for applications that require heavy duty graphics or high levels of interactivity. “In the shorter term it is still a good choice for heavy-interface requirements such as vector-based animations, advanced video and audio features, and immersive environments,” agrees Kirk Edwardson, director of marketing at IPTV vendor Espial. But for mainstream OTT, HTML5 is carrying the tide, and is really what the industry needed, according to Eric Elia, VP for TV solutions at online video platform vendor Brightcove. “HTML5 allows video to be expressed in hypertext mark-up language via the video tag syntax,” says Elia. “By making the video tag

HTML5 standard across all major browsers, publishers are able to simplify and standardise playback for any device via the browser, including smart TVs, which promises improved and interoperable Web experiences. Having open-standards-based video playback eliminates the need for downloads and updates of proprietary plug-ins, and removes the need for plug-in on start-up, bringing faster video experiences.” HTML5: A work in progress This avoidance of need for extra software was cited as a key factor in HTML5’s takeover from Flash as the client platform of choice for online TV by Frode Hernes, VP for TV products and connected devices at Norwegian web browser developer Opera Software, which invented HTML5. “It makes it possible to integrate it with hardware support by the browser manufacturer or platform manufacturer, without the need for special middleware,” says Hernes. “Now that the

base standard is there, we will see extensions and development that will help in the use cases we see in this industry, including support for subtitles, synchronisation with other media, adaptive bit rate streaming, and content protection.” By implication these extensions are not yet available, and one disadvantage of this switch in focus to HTML5 while it is still maturing is that many of the functions needed to support online video are still missing, notes Elia. “By and large, HTML5 is still in its infancy. The challenge today is that HTML5 video is really only focused on the core function of playback, which is undoubtedly the foundation of great video experiences, but publishers want more holistic video experiences, such as branded players, playlists, advertising, analytics, calls to action, and content protection. Right now, more complex features such as these have to be rebuilt from the ground-up to work in the HTML5 environment.” Elia also pointed out that while HTML5 is

supposed to facilitate playback in a standard way, this has not yet been achieved fully in practice, with differences in behaviour between devices. “Consumers are accessing HTML5 video through nearly 20 different versions of iOS and Android operating systems, which affects the reliability of video playback, and creates differences in advertising and analytics behaviour.” Another omission until recently at least was the lack of support for video playback on large screens, which would be a serious handicap if we are to believe that 2012 will be the year internet connected TVs really do coalesce at last around common standards, and start to take off as a result. However this is now being addressed, according to Espial’s Edwardson. “Specifications are being developed by a number of industry players for a “Full Screen API” that allows a “full screen” HTML element.” This highlights another issue, which is that browsers are tending to implement various

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HTML5 features of HTML5, including full screen support, in different ways, and this also applies to core functions such as encoding and adaptive bitrate streaming (ARS). “Some HTML5 browsers are supporting the MP4 Video format, while others support the WebM format,” notes Edwardson, the former being a digital video storage format that is part of MPEG-4, and the latter a royalty free audio/video compression format designed specifically for HTML5 video. “Additionally HTML5 Adaptive Streaming isn’t supported on all HTML5 browsers either,” Edwardson adds. “So as you can see, not only do current browsers have to support multiple formats, or agree on one, but older browsers would also have to be upgraded.” Is DASH the final piece in the OTT puzzle? Adaptive streaming, alongside standardized DRM support, are two of the biggest remaining issues to be resolved for HTML5, although the answer may well come with just two words, MPEG-DASH. This is emerging quickly from MPEG, and is becoming an ISO (International Standards Organisation) standard for adaptive streaming over HTTP, the underlying application level transport protocol used by the internet. It is being touted as a replacement for, and point of convergence between, existing streaming protocols, including Microsoft Smooth Streaming, and Apple HTTP Live Streaming (HLS), elements of both of which are incorporated in DASH. Like all other HTTP adaptive streaming protocols, DASH breaks streams into small chunks of two types, one comprising the audio/ video payload itself, and the other manifest files containing names and URL addresses of the streams. They all are based on the traditional HTTP progressive download, where the client cache has to fill up before playback can begin, but

because the files are now very small, it behaves like a live streaming service. The difference between streaming protocols lies in the method of delivering the chunks, with Adobe for example using Real Time Messaging Protocol (RTMP), which needs a near-continuous connection between a streaming server and the player. DASH has a new protocol derived from both the 3GPP Adaptive HTTP streaming (AHS), and on HTTP Adaptive Streaming (HAS) defined in Open IPTV Forum Release 2. Another key point about DASH is that it is attempting to do for live streaming what The Digital Entertainment Content Ecosystem (DECE) consortium is doing for the download to own video model, through its Ultraviolet (UV) platform. Both have taken the Common File Format and Common Encryption (CENC) for transmission of secure content, and both also in principle enable any DRM to be used with them. In practice UV is running with five DRMs, but in principle can support others, while at present DASH is DRM agnostic. The idea is that the encryption itself is standardised, but the individual DRMs retain control over key distribution and management, which can be tuned to suit the deployment. When it comes to DASH, the exact outcome over streaming remains to be settled, but a fast growing number of vendors in the HTML5 sphere believe it is a vital piece of the OTT puzzle, including video encoding specialist Envivio. “The three major formats aren’t incompatible and have roughly 80% similarity in their architecture,” says Matt Smith, Envivio’s VP of internet Television. “MPEG-DASH seeks to align this commonality and define specifications so that providers can ‘mix and match’ among media elements encoded in one format or another. DASH and HTML5 can work together to ‘lower the bar’, so that media

“Now that the base standard is there, we will see extensions and development that will help in the use cases we see in this industry.” 26

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experiences can flow more universally across browsers, devices and platforms.” It is up to HTML5 though to help enable the rich features service providers will want to differentiate their offerings, and on this front it is already beginning to deliver, according to Milya Timergaleyeva, VP for market strategy at London based browser and IPTV software vendor Oregan Networks. “One of the key end user benefits is the enhanced speed of rendering through the implementation of background scripting,” she says. “The API (Application Programming Interface) makes it possible to run multiple threads of scripting simultaneously to the main page script. Timergaleyeva also cites HTML5’s support for building search applications as an important factor, and attributed the fast growing range of HTML5 APIs in general to its being an open source platform tapping into a wide body of developers. “The HTML route is successful for the same reasons that Linux (open source computer operating system) has been steadily gaining mindshare,” argues Timergaleyeva. “The open source roots make it a continuously evolving standard through an effort of an immense community of enthusiasts. There is simply a lot of good will behind HTML5.” This, rather than any immediate technical advantages, looks like being the reason HTML5 is going to win and is already being adopted en masse for online video deployments.

Opinion

An umbrella specification

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ver the past couple of years, several new technology acronyms have hit the TV market but none has been as widely hailed as HTML5. Outside of core engineering teams, what few people realise is that HTML5 isn’t a product or even a browser specification; it’s an umbrella specification containing many individual technologies, only one of which is pure HTML and a large number of which are still under development. When most people think about HTML5, they focus on a small number of the technologies that the umbrella encompasses, most notably the video tag, canvas and SVG. Individually, many of these technologies have significant benefits for TV, but treating them collectively as some form of global panacea risks masking their true benefit and re-creating the disappointment that HTML4 turned out to be. Potential areas of mismatch Probably the most talked about HTML5 technology is the video tag and few would argue that its introduction is anything but a significant step forwards from the HTML4 approach of programmatically scaling and positioning video. However, there are a few areas that equipment providers and content developers are advised to consider. Firstly, only the basic video tag functionality has actually been standardised, most of the extensions are still under discussion. Trick modes in particular have yet to be agreed which could be a considerable problem for the CE industry where products are not always supported once deployed.

Ekioh’s Stephen Reeder wonders if HTML5 is what the TV industry has been searching for all along, arguing that it is dangerous to treat its constituent parts collectively Another area for potential mismatch in expectations is that, unlike Adobe Flash which had its own video format and content security, the video tag simply passes the media stream down to the underlying platform to play. Unless the platform has the relevant codec, it will be unable to play the media even though it can proudly claim HTML5 video tag compliance. Whilst this isn’t much of an issue on the desktop, where software codecs can be downloaded, in the embedded device, codecs are normally chosen at the point of manufacture and most carry a licensing cost meaning that the range on any given device is normally quite small. The problem becomes even greater if any form of access control or rights management is required since these too are unlikely to be able to be added to an embedded device as an afterthought. Canvas too is rather misunderstood. Its programmatic layout approach is highly analogous to the way that Adobe Flash performs its rendering. This makes it ideal for games and other applications where consecutive frames have little in common, but for user interface rendering it suffers from the same poor performance and memory problems that have dogged Flash for nearly a decade and may well have contributed to Adobe’s decision to re-think their embedded device Flash strategy. SVG delivers on HTML5’s promise SVG (Scalable Vector Graphics) by contrast is one element of the HTML5 technology suite that’s already delivering on the HTML5 promise of greater performance and easier content authoring. Leading middleware companies such

as Open TV, Ericsson, Motorola, and BeeSmart have all embraced the use of SVG to deliver richer customer experiences with smoother animations. The reason behind the increase in performance when using SVG comes from the way in which it’s architected. SVG is fundamentally designed for graphical layout whereas HTML is fundamentally designed for text layout. This radically different starting point drives a significant difference in nature of processor usage, the very foundation of user interface (UI) performance. Processors rendering HTML spend the majority of their time on layout and only a small fraction on rendering. With SVG it’s the opposite meaning that most time is spent rendering, where modern processor hardware acceleration capabilities can be leveraged to the fullest extent. This typically produces between a four and tenfold increase in UI frame rate resulting in a smoother, more visually compelling UI. Middleware providers also benefit from the fact that SVG is fundamentally time based, rather than frame based (as with Flash and canvas). Animations are defined in terms of start/end conditions and the duration meaning that the same UI can be delivered across a wide range of set-top boxes, including legacy devices, with the higher speed products benefiting from even smoother transitions. As an umbrella specification, it’s clear that HTML5 has a great deal to offer the TV market, and those who are selectively picking the best bits are already seeing great results. It remains important however, that delivery strategy is not driven by those who see HTML5 as a single product or solution since, fundamentally, HTML itself is just as slow as it always has been.

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Conference review

Alive and kicking A UK government organised event on the dual screen found the TV industry in buoyant mood on the opportunity of companion devices, although it was warned the potential should not be overestimated, writes Goran Nastic

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ompanion devices and the related field of social TV are the two hottest topics in broadcast. This was reflected in the fact that a Westminster run conference on the subject, ‘TV bites back – dual screen viewing, social media and the power of the schedule’, had twice as many attendees from the UK’s television sector as usual. The context was set against a general belief that ‘Live’ will have enduring value in TV – in the form of news, sports and certain other X-factor style entertainment programmes. The expected/ feared drop in viewing hasn’t happened and we are consuming more TV (on-demand and linear) than ever, around 28 hours a week in the UK, partly as a result of PVR growth. Also important to note is that large levels of VoD and catch-up are driven by the main schedule. Another key point is that social media has enhanced TV (or should in theory anyway), not competed with it. Some interesting stats came out to support this. On Twitter, for example, 40% of tweets are centred on and around TV programmes. Incidentally, ITV’s Take Me: Out The Gossip was the most tweeted about show the week before the conference, with 3,000 tweets a minute running alongside the programme. Freeview’s Ilse Howling observed that tweeting is the new watercooler moment, only immediate. Significantly, for now the majority of second

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screen activity is not linked to main TV viewing, which is what the broadcasters want to tap into. Figures from Thinkbox showed emailing, general browsing and social networking to be the main tasks performed while watching TV. Only a small proportion – some 4% of smartphone users – were actively using the internet to engage with the programme (find information about actors etc), brand or advert in some way. The rationale, therefore, is for linear audiences to follow broadcasters onto new connected devices. All the major broadcasters have programmes with sizeable followings on Facebook, such as X Factor and Eastenders with millions of fans, and they are building larger programme brands by extending their shows into the social arena. ITV, moreover, has seen 150,000 downloads of its Dancing on Ice sponsored experience app. This is also the main challenge, getting consumers to use dedicated TV show-related apps rather than simply third party services on Facebook. Channel 4 is also looking at so-called automatic device synchronisation, which involves an audio signal (sometimes watermarked) embedded within the TV broadcast that the companion device can recognise to display information in real-time. Always focus on the first screen first Having laid the groundwork for the importance of social TV and companion devices, a clear message was that media companies should not get carried away by the still nascent dual screen opportunity.

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Firstly, the majority of viewing still takes place without a second screen. Moreover, a relatively small percentage (6.5%) of the UK population used Twitter in December. For this reason – and many others besides - the main TV set screen should still be where the efforts should be focused on. “It’s scary when people put more effort into second screen than the first,” said Tess Alps of Thinkbox. Channel 4, ITV and the BBC all backed this argument. “The BBC approach is a TV-first strategy; people want a lean back experience,” said strategy director John Tate. That is not to say new opportunities should not be explored, and this is partly formed by a fear of what happened to the music industry. Tom McDonnell of Monterosa noted there was a whole generation of content that can be created in the next five years that can make much better use of connected audiences: “You as the programme creator, have to do quite a lot of work and quite a lot of persuasion to get somebody to get involved.” Zeebox isn’t a content owner but is one of the most high profile start-ups in this space, at least in Europe, helped by Sky’s recent 10% investment in the company. While its app is rumoured to have delivered around 200,000 downloads in December, MediaCom estimates that only 1,600 tweets were actually made through the app – again, it’s early days.

Data is the new oil Mark Cullen, chief executive, ETV Media Group: “Channel 4 has described data as the new oil, and we are in the very beginnings of baby steps about how we turn that into real revenues. We think that whoever grasps this opportunity, and scarily we think it won’t be from the television industry because we think the TV industry will be too conservative to make these steps, will be in a good place. Hence you look out at Google or someone else, but whoever it is has a real chance to re-establish new value in the food chain. I would like it to be broadcasters because I think they’ve got a real place to play in this, but they could see themselves being nudged over by someone else who comes and eats their lunch.”

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Guest column

The big switch London begins the switch to digital TV in April in time for this summer’s Olympic Games leaving future uses of spectrum for LTE and White Space devices

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o date, digital TV switchover is a great British success story. Co-ordinated by the team at Digital UK and supported by organisations such as the DTG, BIS, DCMS, Ofcom and industry, the UK digital switchover campaign has succeeded in raising consumer awareness, ensuring the right equipment is in homes and ensuring the live regional switchovers go smoothly through scenario testing. As of 22 February, approximately 18 million homes (68% of the UK) had completed the switch to digital television. However, the biggest switchover to date is just around the corner – in April, London will begin the switch to digital just in time for this summer’s Olympic Games. The London Olympics will be the first ‘digital’ Olympics in the event’s history and will further reinforce the UK’s position as a world leader in the development of digital television. With the final digital switchover to complete in just eight months, the industry’s focus has shifted to the emergence of hybrid TV devices and services and the future uses of spectrum left over from the digital switchover such as Long Term Evolution (LTE) and White Space devices. LTE will provide the next generation of mobile broadband services, this is increasingly significant with the rise of tablets and smart phones and the ever increasing demand for bandwidth. White

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Space devices try to intelligently choose frequencies available in the area to maximise efficient use of the spectrum. Such devices are likely to include ‘Smart’ devices such as in-home appliances and energy monitors. In response to the drive towards next generation products and services, the DTG is to publish its enhancements to the technical specification for Freeview and Freeview HD (D-Book 7) on 31 March. New features in the 2012 D-Book include an enhanced EPG with the ability to go both backwards and forwards and remote booking which enables viewers to book recordings or set reminders from a website or application. The new version also includes enhancements to the current Broadcast Record Lists feature and clearer reference of the ETSI MHEG specification. These enhancements build on the current edition of the D-Book (D-Book 7) published in 2011, which marked a turning point in UK digital terrestrial television with the introduction of an industry-agreed, technical specification for Connected TV products and services. The DTG is committed to the international harmonisation of digital television standards. The D-Book’s adoption of the European ETSI standard for MHEG interactive applications underlines how the Group works with international standards bodies to drive innovation while maximising international standardisation. The second version, published in 2011, brings it in line with DBook 6.2 and introduces a number of technical solutions from other platforms that have adopted MHEG. This makes ES 202 184 the central resource for MHEG implementations around the world. The new version of the D-Book, references ETSI directly and contains only clarifications and profiles that are specific to the UK’s requirements. In the future the DTG will publish all enhancements to the UK MHEG profile through ETSI to ensure that all international platforms derived from ETSI can benefit from the DTG’s technical leadership.

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Looking to the second screen The DTG recognises the importance of emerging technologies such as ‘second screen’ and interoperable home networking. Development work in these areas will begin in the Spring. The DTG will also focus on future uses of spectrum such as the coexistence and interoperability of LTE and White Space Devices. The “3D D-Book” is already in draft form and the DTG will aim to publish this by the autumn. 2013 will see the reorganisation to complete the clearance of the 800 MHz band for LTE. Current World Radiocommunication Conference (WRC) discussions are proposing harmonisation in the 700MHz band for mobile broadband use which would mean a significant re-plan and re-think on the 600MHz auction plans. The Digital TV Group has balanced UK business requirements and high consumer expectations with the increasing demands of globalisation and business complexity to delivery consistently world leading digital television standards for Freeview and Connected TV. The role of the DTG in the post-switchover environment is to ensure coexistence of new technologies and compliance with the D-Book and DTG test regimes in order to replicate the success of the current DTT market.

Simon Gauntlett is technology director at the DTG, the industry association for DTV in the UK. This is the latest in a line of regular guest columns to provide CSI readers with updates on the DTG’s initiatives and activities.

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SNG

The future of SNG is MNG Satellite news gathering is turning into mobile news gathering, discovers Adrian Pennington

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ith budgets squeezed and the demand for pictures unrelenting, the technology for gathering news is evolving at pace. The emergence of solutions which take advantage of mobile and internet networks offer a potential threat to satellite incumbents but the satellite news gathering (SNG) sector has responded with new technology which is likely to see newscasters and managed service providers offer a range of complementary pipes to deliver the news. “In the more developed and metropolitan areas some of the traditional SNG deployments may be replaced by mobile technology,” believes Tomas Petru, CEO of SI and multi-screen platform provider, Visual Unity. “However, while SNG output may remain the same, the sheer number of channels (digital, online) demands to be addressed by new solutions for mobile content acquisition using IP or mobile networks.” According to Simon Farnsworth at Globecast UK, the traditional SNG vehicle with 1.5 to two metre antenna and a dedicated SNG engineer, is aimed more at the sports market (particularly payTV operators) where picture quality is key. “The criteria for news are speed of deployment and cost,” notes Farnsworth. “Often lower quality pictures are justified as an editorial look.” “The public’s appetite for a breaking news story is such that they will accept sub-standard pictures,” agrees Mark Shadbolt, sales director at SIS Live. “It’s not unusual to see mobile phone footage on mainstream programmes. Often, any picture is better than none but news providers still want HD for the archive even if they don’t transmit it.” Visual Unity’s Petru agrees: “For broadcast quality, live transmission quality of service is needed. QoS is available on satellite, and it may be available on different mobile networks if agreed with the specific operator, but the trick is

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in the ‘agreed’, which is almost impossible to do.” Purveyors of mobile technologies would contend that the growing connectivity of terrestrial cellular networks (3G, 4G LTE, 4G WiMAX, and Wi-Fi ) provide an increasingly resilient alternative to streaming even HD video over satellite and fibre. Rise of the new breed Among the pioneers is Israel headquartered LiveU, which counts CNN, ABC, CBS, Fox News and Germany’s ZDF among customers of its LU60 mobile uplink kit which fits into a backpack weighing 5kg (see picture).

“Often, any picture is better than none but news providers still want HD for the archive even if they don’t transmit it.” LiveU’s technology bonds multiple 3G, 4G LTE, 4G WiMAX, and Wi-Fi modems to aggregate bandwidth over multiple carriers via an in-built RF antenna. It provides enough throughput to transmit 1080i HD signals using H.264 encoding. Average conditions are in the 1-2Mbps range, but the technology is claimed to transmit effectively even at 500kbps, depending on the selected resolution and settings. “Our technology can transmit effectively from many dead spots and areas where a specific carrier may not have adequate coverage including in tunnels, crowded public spaces and underground metro stations,” says Ronen Artman, LiveU’s VP of marketing. During the Japan tsunami, Fox news used

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LiveU’s cellular roaming solution to deliver live broadcast from the disaster area. It was also used to cover hurricane Irene. “Newcasters on the US east coast (hit by Irene) weren’t able to use to use satellite because of the wind and line of sight issues. The only technology that could assist live, quality shots was ours,” claims Artman. It would be disingenuous to suggest that this is always the case. SIS Live’s Shadbolt says that in a warzone or tornado aftermath the chances of the terrestrial network being down are high. “Where newscasters are operating outside their home territory, in Syria for example, they are more likely to take a BGAN than a bonded 3G/4G system since they are not sure what the terrestrial infrastructure is going to be like,” he says. Artman responds that feedback from its clients has been that the first infrastructure to be re-instated is cellular due to ease of deployment. “Setting up a satellite van in these areas or in bad weather is not always a simple matter and in any case LiveU is easily connected to dual BGAN terminals as was the case in Haiti during the earthquake.” There are increasing uses of images gathered from smartphones or iPads, mainly but not exclusively as user generated content (UGC). MTV Finland, for example, enables instant news gathering: “This is a hugely important business development for us,” explains Jukka Vehkaoja at MTV Finland which has invested in Aspera’s Mobile Client Application to speed video to its bureau from Android and iOS apps. “The fact that reporters couldn’t upload content from certain mobile phones was a significant hole in the system, especially with the increasing importance of citizen journalism.” Shadbolt is certainly not dismissive of the abilities of cellular but is adamant that the technology is unlikely to erode the viability of a fleet of SNG trucks. “A newscaster could equip every one of its reporters with a bonded 3G terminal at relatively low cost and get some pictures back - but it would be complementary to the fleet,” he says. “If we could give our customers the same level of service, cost and convenience by having a bonded

SNG

3G antenna rather than with a satellite dish we would. The fact is that although such solutions are seen as complementary technology they are not making a lot of headway in the SNG market,” Shadbolt says. Developing towards IP Pointing out that most of the transmission from Arab spring hotspots was done using 3G, Luke Kennedy, DTH director at Vision247, declares that 4G will reduce SNG market share. “However SNG will stay the dominant solution for time critical delivery where low latency and redundancy are required - notably for sports transmissions,” he says. “Clients want operational simplicity and a cost effective TX solution to deliver clips and live streams from any point on the globe. IP delivery over mobile networks is the Holy Grail the news gathering community was waiting for. How can you beat a EUR1,500 cigarette box-sized encoder with HD-SDI input and built-in 4G transmitter? Especially when a gadget like that replaces a complete SNG van.” Vision247’s new technology in this space is XtremeCDN, which Kennedy says will deliver the last missing ingredient to

transmission over the internet – virtual multicast at the edge. SNG has typically been about one way uplinking, but it is developing towards IP on two fronts: by deploying wireless camera connections with very long range, and using satellite links with IP to enable bi-directional communication. SIS Live, for example, offers VSAT terminal uPak, which can fit into a rucksack, and the uPod uplink system which is IP capable by way of integrated modem offering 4.2Mbps up and 18Mbps down.

LiveU LU60 backpack and unit

One of the primary arguments used to promote cellular newsgathering is its greater ability to circumnavigate signal fluctuation hazards. Black-spots, caused by skyscrapers or tree cover for example, are a big problem for the satellite industry. “Having encountered a blackspot, the time it takes to pack up, move the team and equipment to another location and setup again can cost valuable coverage time,” observes Martin Coleman of monitoring and control specialist, Colem. “The other problem is that with no prior knowledge of black-spots in the area, the SNG crew could very well go through that whole process only to encounter a bad signal area.” Embedded into Colem’s X-Mobile and camera control systems, and using available GPS monitoring and local area maps, is an alert which can warn the SNG crew when they are in, or near, a black-spot area before setting up. Another problem for SNGs is satellite interference, which a working group of the Satellite Interference Reduction Group (sIRG) has been set up to combat. “sIRG has spent a great deal of time and effort in introducing Carrier ID across the industry, however it is not yet possible to identify the satellite itself, which leads to carriers mistakenly

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March-April 2012

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SNG

“The fact that reporters couldn’t upload content from certain mobile phones was a significant hole in the system, especially with the increasing importance of citizen journalism.” using the wrong satellite,” says Coleman, who is also executive director of the group. “It is fundamental to auto-deploy Comms On The Move (COTM) systems which by its nature is unmanned and prone to inaccuracies.” The sIRG plans to find ways to introduce satellite ID, as well as work towards a standard for auto-deploy systems. The aim is to significantly reduce interference during deployment. “In addition, it is hoped to form a new group early in 2012 to look at the future of on-board satellite technology with the inclusion of satellite ID,” reveals Coleman. Ka-band as a saviour Satellite remains the cornerstone and it is investments in technologies to tap the KA band which gives Farnsworth reason to suggest SNG has a “massive future.” KA band promises twice the frequency of KU using smaller antenna. “Although there is a licensing issue in the UK and other European countries for KA band fixed mobile uplinks I anticipate that in five years KA availability will become such that SNG operators will have built KA band fleets,” Farnsworth states. Indeed, Globecast has invested in its first truck, out of Italy, where it is being tested operating Eutelsat’s KA-SAT NewSpotter service. “NewsSpotter complements traditional satellite uplinking,” says Cristiano Benzi, head of video value added services at Eutelsat. “It is a new SNG system which works over IP networks.” Among the pluses are its IP-based point-to

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point satellite transmission capability, a lower service cost, and uplink technology that will allow television stations to outfit SNG vans for a fraction of the cost of a comparable Ku or C-band rig. “An operator or broadcaster could commission a fleet of SNG vans with a minimal satellite footprint, instead of using much larger trucks,” says Benzi. Download speeds of up

to 50 Mbps with up to 20 Mbps uplink return can be reached, ample for SNG. “We provide committed information-rate bidirectional IP connectivity, either between terminals or from a terminal to a site connected to the backbone,” says Benzi. “Video contributions via IP can be easily integrated into today’s IP workflows and offer exceptional value for SNG work. “For example, if your SNG van contained four camera channels, you could encode all those camera feeds and stream them in parallel to your broadcast HQ for editing, rather than perform that function on-site and contribute just the final feed,” he says.

LiveU LU40i with GUI

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Alternatively an operator could field a van, servicing two clients simultaneously from two stand-up positions. Each feed could be routed to an IP address at the destination broadcaster in different territories. “The newsgathering production environment is already perfectly integrated into IP workflows,” adds Benzi. “File-based technologies have revolutionised newsgathering from camcorder recording, to offline editing over laptops in the field. IP contribution by KA-SAT provides the missing piece in the workflow.” Inmarsat is building a $1.2 billion network for global coverage in the KA band including three new satellites. Planned to launch in 2013, Global Xpress will offer downlinks up to 50Mbps and 5Mbps up from compact terminals. Each of the new Inmarsat-5 satellites will carry 89 Ka-band beams, which can be configured to focus on hotspots in any part of the world. The company says that global coverage is already available from existing Inmarsat L-band services, but Global Xpress will cost-effectively offer up to 100 times the bandwidth on the downlink. There is also NovelSat’s new NS3 3D-Sat modulation scheme which effectively allows the squeezing of more bits of bandwidth giving satellites a new lease of life. The mechanism enables the handling of full wide transponders, such as 72MHz as a single carrier, ‘dramatically expanding satellite capacity’, states the company. “You may even find that using such new modulation technology makes it cheaper than fibre in the long run, which is not the case at the moment,” notes Farnsworth. It may be that cellular technology outpaces even this. Ongoing investments in R&D into transmission algorithms and intelligent encoding will continue to take advantage of the rapid advances in mobile network rollout, notably 4G/ LTE which is widely available now in the US. “We already take advantage of LTE networks and were able to transmit using LTE from the Superbowl and Grammies in February,” says LiveU’s Artman. “It opens new horizons for us but we are also focussed on providing a resilient HD quality video even when hundreds of thousands of people are in one place.” It is already dated to be referring to satellite news gathering when the field has already shifted to mobile news gathering where that implies a mix of flexible small vehicle or portable communications over IP, mobile networks and satellite.

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Evolving towards a multi-screen world www.csimagazine.com

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Re-defining multi-network Steve Christian, VP of marketing at Verimatrix, describes how a mix of Smooth Streaming and HTTP Live Streaming can give operators a pain-free way of supporting multiple device types

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ulti-network, multiscreen video services are quickly becoming “must have” features on the roadmap of competitive video service operators around the world. While early incarnations of multi-network architectures were primarily focused on combining managed IP networks (telco TV grade) with traditional cable and satellite networks, the focus recently has expanded greatly and is now largely focused on combinations of services over DVB broadcast and unmanaged (over-the-top) networks. This evolution has most certainly been fuelled by the advent of adaptive rate streaming (ARS), which powers consumer quality OTT video services to enhance ARPU, subscriber loyalty and lure incremental advertising dollars. ARS is also particularly well-suited to mobile content delivery, as it replaces the concept of fixed reservation network managed QoS in favour of a client optimised consumer experience. The delivery technology makes use of what the Web does best – efficient and massively scalable delivery of data using the HTTP protocol. Leveraging ARS supports the development of new OTT video service architectures, and offers operators a fast and cost-effective route for adding interactive services to previously broadcast-only pay-TV networks. Thus a new breed of multinetwork architectures has been born. Emerging network configurations Perhaps the most pervasive combination of multinetwork (hybrid) deployments right now is DVB in combination with OTT as such architectures do not fundamentally require a new agreement with a broadband service provider, or a significant

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infrastructure investment. Operators can leverage their existing DVB network, whether it is satellite, cable or terrestrial, and add the OTT functionality through the consumer’s own broadband links. Of course those operators with two-way cable deployments can be both video broadcast and IP service providers, which gives them a competitive advantage as far as commercial relationships with the consumer are concerned. A deft combination of managed DVB network delivery and OTT delivery can hit a number of important bases, including: • Very high, TV quality presentation (including 3D for instance) on the main screen of the household or home theatre installation; • New business models that include early release window material; • Seamless catch-up services over unicast connections; and • A merged program guide navigation for managed and unmanaged network content feeds. ARS is particularly attractive for DVB + OTT networks as multiple new streaming technologies have recently emerged to further simplify the deployment process, while also facilitating the development of new business models and increasing revenue security. This configuration, although it presents many benefits, is not without its own set of unique challenges, including QoS and QoE. The focus on quality is particularly vexing given that traditionally an enjoyable video experience has been best supported in a controlled, managed network, which makes effective QoS management over a multi-hop internet delivery system seem unrealistic. Fortunately, the technology behind video delivery services is evolving to keep pace

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with the new market dynamics. The emerging substitute for managed network delivery of video is the technology of ARS. Consumers with highbandwidth connections and newer hardware can experience HD quality OTT video streaming, while others with lower bandwidth or mobile devices receive a stream optimum to their conditions. ARS of video provides an optimum-quality viewing experience that scales effectively on global and local networks, makes highly effective use of today’s content distribution networks, and ensures that true HD media experiences over the internet can become a reality. Spotlight on HLS & PlayReady Smooth Streaming from Microsoft and HTTP Live Streaming (HLS) are two adaptive streaming technologies that are exceptionally well-positioned to address QoE challenges. An increasing number of operators are choosing to leverage a combination of HLS and Smooth Streaming for OTT video services. Their goal is to reach the most diverse range of device types and maximise the use of native device support for ARS where it exists. Since both ARS technologies fundamentally rest on a backbone of HTTP, they can easily co-exist. All CDNs already have massive deployments of acceleration servers that support HTTP protocols. That means as

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video traffic ramps up, there are capital and operational efficiencies in delivery using HTTP, and no separate server delivery systems which would otherwise be required to support proprietary streaming protocols such as RTSP and RTMP. HLS, for example, is especially well-suited for tablet and smartphone delivery since a solid base of such devices preferentially support HLS. Protected stream support for HLS, which leverages Verimatrix enhanced security, can be supported on the iPad, iPhone, set top box devices and connected TVs. Smooth Streaming, which typically integrates PlayReady DRM, is also gaining momentum where PC and Mac devices are preferential devices for video consumers. PCs and Macs with the Silverlight plug-in both feature native support for Smooth Streaming, as does the X-box. While it is possible to use a single stream type to service all of these types of devices, operators are tending to prefer Smooth Streaming for PCs and Macs because of the sophisticated (and free) Silverlight environment and preferentially choose HLS for other connected devices. While some have argued that splitting their delivery technology between these two stream types might lead to compromises in the management of subscriber rights and unnecessary complexity of DRM solutions, there is no compelling reason to believe this should be the case. Combining the strengths of the dual prong approach with an appropriate high level rights management solution, the harmonisation of DRM management becomes relatively straightforward – and even leads to the concept of “super domain” management. In other words, converged management of user devices across multiple DRMs in the OTT space and STBs on the DVB or managed IP network. Securing the new multi-network From a content security perspective, perhaps the greatest challenge for operators is to grasp how content protection requirements are evolving in an OTT environment, as well as the details of how these must be supported at fine grain level. It seems that after an initial burst of “free to everyone” video service euphoria, the industry is rediscovering all the pay-TV security issues and threats that drove traditional conditional access

(CA) systems for the past 20 years. Among issues are the needs for device identification and authentication – to securely associate a specific device with a payment method and the distributed responsibility for other hardware security support features in the target devices. The ability to accommodate multiple DRMs is another critical capability of an effective and comprehensive content security strategy. Operators wanting to reach beyond managed networks to various types of mobile devices using OTT video streaming delivery via Smooth Streaming or HLS must be able to seamlessly manage multiple DRMs. Perhaps the real business challenge is for operators to eliminate the distribution and consumption silos that often frustrate consumers and nudge them towards alternative sources. Therefore, the service provider needs to enable support for native DRM systems on the devices that they wish to provide services for, and to provide the user with a completely transparent consumption experience. Operators need to accommodate a diversity of receivers over broadcasting and IP networks, regardless of any embedded DRM, supporting fixed or mobile reception over both managed and unmanaged networks. For example, Verimatrix has devised a solution for these multi-platform challenges, called MultiRights, which provides DRM and content consumption transparency across networks and devices. The MultiRights for PlayReady DRM solution secures Smooth Streaming formatted video services under a unified multi-network, multiscreen framework. This fully integrated DRM solution for linear and on-demand digital TV content delivery extends the security architecture

to Silverlight enabled PCs, Windows Phone 7 devices and connected TVs. The advantage is that these client devices, which are equipped with standard Microsoft Silverlight players, do not require any additional security integration at the client level. In order to use the HLS protocol for premium video delivery, an enhanced security platform is necessary to make it suitable for delivering high-value pay-TV content in both live and on-demand scenarios. By adding a mechanism for registering and authenticating individual devices, together with a way to manage entitlement for content viewing, ensures that client devices are attached to paying customers. Therefore, only bona fide subscribers are able to watch protected content. This type of security also allows for more flexible business models that can help up-sell OTT content and cross-sell services from the DVB network. New architectures, new business models It is important to deploy a security solution that can seamlessly accommodate a wide range of devices; it is equally critical to leverage a streaming technology that features robust revenue and content security. Both are essential for ensuring that an operator’s delivery platform reaches as many device types as its subscribers could possibly want to use. Increasing the number of supported device types reduces and helps increase subscriber adoption of new services. Additionally, the more screens are supported simultaneously, the more eyeballs you have for both advertising and transactional revenue. Using a combination of Smooth Streaming where appropriate, and HLS where appropriate, provides operators with an ideal environment for developing and deploying applications on each of those device types. The resulting service is wellprotected and operates in a reliable fashion on all supported devices. Technology advances through ARS technology, particularly those based around HLS and Smooth Streaming, are likely to alter the current framework of managed network vs internet delivery. Choosing the right protocol, and the right revenue security solution, will enable service providers to provide a richer consumer experience, with more personalised choices as regards content, time and place.

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Join us for

Tuesday • 20 March 2012 • 8:00am - 10:30am Hilton Olympia London

Come see us at IP&TV World Forum 2012 London • Booth #173 Or visit online at www.verimatrix.com/multinetwork to learn more.

Beyond Content Protection to Revenue Security™

CDNs

Cutting out the middle man Nivedita Nouvel argues the case for wholesale content delivery networks for efficient, cost-effective delivery of multi-platform video

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en years ago, no one knew the word iPad, but it is a very different world today. With rapidly evolving video streaming technologies, consumers today can stream high-quality video content over connected TVs, PCs, and mobile devices, often receiving that content over the top (OTT) The thirst for high-quality online video, anytime, anywhere, shows no signs of slowing down. In fact, according to a recent study by SFR, OTT video will represent 70% of Internet traffic in 2015. With the surge in the demand for and consumption of video, content providers are faced with a hard time controlling the quality of the video content or the costs involved. As network operators’ video traffic increases, so do their infrastructure costs. Consequently, they use traffic shaping to delay heavy investments, decreasing the quality of video consumers view OTT. Network service providers (NSPs) and operators, such as cable companies and satellite operators, are tasked with finding a way to provide high-quality video content to subscribers while generating new revenue streams. One such approach, called operator content delivery networks (CDN), is a viable solution for NSPs and operators, because it eliminates global CDNs from the equation, with regards to a local content delivery.

directly with smaller NSPs that can’t afford to invest in a CDN deployment. Sub NSPs generally suffer from the increase in online video traffic even more than other NSPs and operators because they can’t afford to invest in the infrastructure needed to increase their capacity. Therefore, they are stuck paying high transit costs to main NSPs. When a major NSP deploys a CDN within a sub NSP’s network, it sets up points of presence in the sub NSP’s network and provides the servers that will be managed by the global CDN. The main NSP generates revenues from leasing its CDN to the sub NSP and attracts a wider base of content providers. The sub NSP reduces transit costs by storing popular content coming from main NSP providers in its own network and can contract directly with a local content provider, generating revenues. An operator owned CDN architecture more closely monitors bandwidth, reducing network congestion, and increasing the consumer’s quality of experience (QoE). It provides revenue opportunities to all the players involved by cutting

out the middle man — the global CDN.

Wholesale CDN vs traditional CDN Let’s look at three scenarios where a wholesale CDN is beneficial for an operator and NSP. In the first case, the major NSP and content provider are located in geographical zone A and the sub NSP is located in geographical zone B. The sub NSP subscriber located in zone B wants to access content from zone A deployed in major NSP network. Without the wholesale CDN, the content travels through the peering point, which generates high transit costs for the sub NSP. Additionally, there is not a guaranteed quality of service for the subscriber. Using the wholesale approach, where the CDN is deployed in a sub NSP network, the sub NSP saves on transit costs, optimises content delivery, and enhances quality of service for the subscribers due to removal of contention points (see Figure 1, on the next page). In the second scenario, a major NSP is located in geographical zone A, and the content provider and sub NSP are in zone B. A sub NSP subscriber located in zone B wants to access content from zone B. Without the wholesale CDN, the content provider has to contract with a CDN service

Source: Broadpeak

Wholesale CDN architecture An operator CDN provides a direct relationship between the content provider and the operator, allowing the network owner to accurately monitor the amount of bandwidth being used, thus guaranteeing quality of service to its subscribers. An operator can deploy its own CDN and lease space directly to the content provider, which means the operator receives revenue directly from content providers. Through a wholesale feature on the operator CDN solution, operators can also deploy their own CDN and contract

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CDNs In this the example, a major NSP is located in geographical zone A, and a content provider and sub NSP are in zone B. If a major NSP subscriber located in zone A wants to access content located in zone B, without the wholesale CDN, the content provider has to contract with a global CDN service provider, missing out on revenue for the major NSP or for the sub NSP, and not providing a guaranteed quality of service for subscribers. With the wholesale approach, a CDN is deployed in a sub NSP network and the content is provisioned in major NSP network. The sub NSP generates revenues from contracting with the content provider and the major NSP, which leases the CDN and generates revenues based on the traffic. Moreover, a major NSP optimises the content delivery and enhances quality service for major NSP subscriber due to the removal of contention points (see Figure 3, opposite). Bandwidth control To set up an operator CDN, an operator needs to install a central control system, such as Broadpeak’s BkM100 Mediator. This administration tool manages the available bandwidth and works with integrated servers to output video content. It functions as a portal, allowing the operator to define what bandwidth they want to resell and how content is distributed to different points of presence. An operator can provide administration rights to one or more resellers and allow resellers to define policies relative to content, such as the number of channels and which VoD catalogs to deploy. Operators also have the capability to invoice each player according to its contribution. Statistics and quotas help the network owner determine the amount of bandwidth that is going to be used. Operators can deploy a CDN through the allocation of quotas per service. Three types of quotas are generally provided: the bandwidth used (Mbps), the number of simultaneous sessions, and the content volume per time unit. In addition, the network owner has access to statistics, including:

provider, which means there is no revenue for the major NSP and no guaranteed quality of service for the subscriber. On the other hand, using a wholesale approach, a CDN is deployed in a sub NSP network, and the content is provisioned in a sub NSP network. The major

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NSP leases the CDN; therefore, it receives revenue based on traffic. Moreover, the sub NSP optimises the content delivery and enhances the quality of service for its subscribers by the removal of contention points (see Figure 2, above).

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• • • • •

Bandwidth usage; Viewing sessions; Content consumption; Delivery failures; and Overall demand.

The level of control afforded by the wholesale CDN architecture helps eliminate

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CDNs network congestion, leading to an increased QoE for subscribers and increased revenue for the operator.

the region where it is most viewed. The content

closely control how, when, and by whom the

control system continuously monitors the

infrastructures are used. This extra control gives

popularity of content based on usage patterns.

operators guaranteed quality of experience that

Popular content is automatically pushed to the

global CDN providers can’t match. The wholesale

Handling technical issues

edge of servers while long-tail content remains

feature of an operator CDN also offers small

The level of control that operator CDNs

on the larger central library. This automated

operators a way to value their network.

offer over regular CDNs is also useful for

process reduces the need for storage at the edge,

troubleshooting technical issues. For example,

therefore, reducing the total cost of ownership

operator CDNs provide a more fair revenue share

in some situations, a provider may not have

of the solution.

to all the players involved in video delivery.

broadcasting rights of content in a geographical

Operator CDNs also offer a secure,

In addition to the boost in content quality,

Operators can lease space on their own CDNS to

area. In this instance, an operator CDN

multilayered PoP topology that monitors and

content providers or NSPs and receive revenue

determines, depending on the time and the

updates each server’s status. The location,

directly from those providers. A smaller NSP that

geographical zone, whether to stream the main

availability, and status of video streamers are

can’t afford to invest in a CDN deployment

content or the alternative content. Broadpeak’s

monitored, so if a PoP breaks down, another

reduces transit costs by storing popular content

solution, called geo-content replacement, is

PoP located in another region or from another

coming from main NSP providers in its own

currently being used by Telecom Argentina,

operator can be used.

network and generates additional revenue by

Argentina’s largest telecommunications group

As high-definition and multi-platform viewing

contracting directly with a local content provider.

and network service provider. If the content

become more prevalent in households, it’s even

in Argentina is a football game, but a provider

more important for providers and operators to

guaranteed high-quality viewing experience for

in Paraguay doesn’t have the rights to the

deliver the highest quality signal to viewers. While

consumers and revenue opportunities operators

football game, the geo-content replacement

there are certain benefits of global CDNs, such as

and network providers by cutting out the middle

feature automatically replaces the game with

experience and the ability to handle international

man — third-party CDNs.

alternative content.

content distribution, they don’t offer the same

Another technical issue an operator CDN resolves is optimising content storage according to

2012 AWARDS

peace of mind as operator CDNs, which enable operators to deploy their own CDNs and more

Overall, the wholesale CDN provides a

Nivedita Nouvel is VP of marketing at Broadpeak

The winners will be announced at IBC, on Friday 7 September 2012

10th ANNIVERSARY

Enter now Deadline for Entries: May 14 2012 www.csimagazine.com/awards For awards enquiries contact: [email protected] +44 (0)207 562 2439

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Smart TV roundtable

Smart TV roundtable

Panellists:

Click here for a 2 minuite video summary from each of our panelists Chairman: Richard Lindsay-Davies, director general, Digital Television Group (DTG) Richard is responsible for the organisation’s overall growth and development. With over 20 years of television industry experience, Richard drives the DTG’s collaborative culture. Richard joined the Group as director of public affairs in 2004 working with government and stakeholders to establish the UK digital switchover body, Digital UK. He was appointed director general in 2006. Prior to DTG, he worked at Sony, Toshiba and Pace.

Richard Broughton, head of broadband media, IHS Screen Digest Richard heads IHS Screen Digest’s Broadband Media and Technology teams, following areas such as broadband access, digital media, VoD and connected devices. He also heads research into advanced TV and cross platform services, and provides consulting work for companies in the payTV and broadband sectors.

Phil Walder, managing director, Connect TV Phil has been involved in internet television for many years, having launched an innovative internet television shopping service for WH Smith as early as 1999. He was most recently the COO and a co-founder of IP Vision, the owners of FetchTV, the UK’s first hybrid DTT/IPTV service. He has also worked for set-top maker Netgem.

Dr Neale Foster, VP global sales IA, Access Neale’s 15-year experience spans broadcast, connected TV and CE industries to spearhead Access in Internet Appliances. Prior to Access, Neale worked at Miniweb and Espial. Access develops software solutions solutions that enable companies to connect the broadcast and CE worlds.

Mark Rooney, director of media, InView Technology Mark is responsible for all content partnerships, working with third parties in Inview’s key markets to provide applications across a broad genre VoD, music-on-demand, social networking, lifestyle, news and information. Mark has spent the past 25 years in the telecom and DTV industry, including BT, Entone and Pace.

Luke Kennedy, DTH director, Vision247 Luke has nearly 20 year’s experience in the broadcast and IPTV business, including Homechoice, now Talk Talk, in the UK and subsequently consulting across Europe for major TV platforms. Luke was appointed DTH director for Vision 247 in January 2012.

Dan Saunders, director content services, Samsung Dan is responsible for content strategy across a range of different devices with a current particular focus on smart TV. Previous experience includes marketing and distribution roles in broadcast and IPTV targeted advertising.

Future roundtables: CSI will be staging roundtable discussions on Social TV (26 April); Access services (22 June), as well as those on TV gaming, CDNs and the changing nature of the set-top box. For speaker/sponsorship opportunities contact Tiro Bestonso at [email protected] or +44 20 7562 2427

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Smart TV roundtable

TV brain power In CSI’s latest roundtable, held at DTG’s HQ in London, industry experts and veterans debated how the various challenges affecting smart TV are being overcome and gazed into their crystal balls for future forecasts Chair: One of the first things we always think of at a base level is how many connected TVs are actually being connected and what are the barriers to that? Dan, you have the largest deployments, what’s Samsung’s experience in this area? Dan Saunders (DS): Well, unfortunately I can’t give you an exact number which is what everyone’s hoping for but we are very pleased with the connection rates we’ve seen. I think the benchmark within the smart TV industry is looking towards the game console world where we think figures in the region of 60-75% are considered good. I don’t think it’s unrealistic for smart TV to achieve those sorts of levels within the next 12 months; we’re on that type of roadmap. So while we don’t publish figures you can see the confidence we have in the smart TV proposition by how central it’s become to our messaging to both trade and consumer. Chair: How do we get that to 100%? Mark Rooney (MR): I would say one of the key things is to have the set up process to get the connection to either WiFi or LAN as simple as possible and as a fundamental part of that set-up. It also relates to the work of individual CE companies. Some manufacturers feel their work is done once that TV has left that shop and don’t push that connection. Phil Walder (PW): That’s very interesting Mark and supports what we’ve found out in the few months we’ve been operating Connect TV. We’re

in the fortunate position that we get analytics from all manufacturers and what we’ve seen is that the makers that are most successful in their percentage of connections on our Freeview connected platform are those that almost make it imperative to connect at point of installation. I won’t embarrass people by saying who is best and worst but when comparing percentages of connection vs sales they don’t match up. Richard Broughton (RB): It must be remembered that the primary functionality of the game console is that they need to be connected whereas TV’s primary purpose is broadcast TV which doesn’t need a connection. OTT is a secondary functionality. So while I would say that while 65-70% is a good target to aim at I would be surprised if it reached that across the board in the next 12 months. MR: A lot of that would depend on the applications, the interest and the drive of what is there to supplement linear TV. We’ve seen movement in pushing the idea that the internet and associated apps will allow consumers to get further value from their TV and you’ve seen certain companies really pushing that side of things, rather than for it to be seen as just a novelty. Discoverability, locality and the user experience Chair: If we talk about service and content discoverability, TV used to be easy. How do we get smart TV as close to that simplicity?

Luke Kennedy (LK): We’ve been working with Connect TV in Freeview HD deployments and our belief is that the EPG is the primary place for consumers to find content. We believe entirely that the route Connect TV has provided in the UK Freeview scenario is the one because it’s the one that people are used to and that’s the way to access content, regardless of how it’s delivered. Neale Foster (NF): I agree we need a user case to connect these TVs much like the games consoles and some good work has gone into advertising this to the consumer. Samsung is in a good position with all the products they offer to create an understanding that people can push media from one device to another. We see it as a multiscreen challenge now, not just television. The BBC iPlayer is a good example of that changing proposition, but do you get it from your TV, tablet, cable provided TiVo like service or Freeview service? There are so many opportunities available now. MR: Going back to something that Luke touched on, we always get asked about the number of applications and it’s difficult to compare to the iPhone but I think there is one Über app on TV for the internet and it is the EPG. We at InView come from an EPG background, we make the apps part of that whole EPG. TV is an immersive experience and you want to be entertained and the EPG is the easiest way of doing that. Chair: Some of the things we missed at the DTG when specifying Freeview HD is the backwards EPG,

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March-April 2012

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Smart TV roundtable

so we’re doing it now with D-Book 7 and it will go to market in a year’s time. Building on from that, the regional country by country consumer habits are not all the same throughout Europe and we have different experiences. How do we overlay the globalisation of discovery in international platforms with that regional bit we are used to?

serve that to smaller broadcasters and IPTV channels can’t afford to. Certainly having standards to help them get content out onto multiple devices will help.

DS: It’s a tough one and will require a lot of further work to get to the answer. At the moment, and rather naively, there is a general distinction between the broadcast world and IP world. So what you have within the TV device is the IP stack where all your apps are and the broadcast stack which is still fed by the EPG. As we move forward those barriers are beginning to erode so you will see within Samsung devices we are shipping that we’ve made closer integration between a lot of the traditional TV functionalities and IP stack. We call it the Smart Hub, the idea being it becomes the hub of the experience. Now how we manage it against the EPG is something we still need to work on. But one thing that is becoming clear and that will start to happen over the next 12 months is that broadcasters will begin to use the technology to create their own bridges between these two stacks.

RB: You won’t necessarily hit a wall but players will be cut out of the market and delayed for a period of time. Ultimately there will be a convergence but when that happens is up for debate. There won’t be any casualties necessarily either and let’s not forget that OTT video is such a small proportion of most companies’ businesses.

Chair: From a business perspective, we’ve had some discussions at the DTG over how do we get British PSBs onto the global standards, things like HbbTV and OIPF. The conclusion was we’ll be deploying services to devices that meet our business requirements - we won’t set the bar as low as HbbTV. As the rights issues evolve how do you see those requirements being met.

DS: From a device manufacturer’s point of view, much of what we are doing is looking to the market to understand what we need to do in order to render ourselves interoperable over the services that are out there. So what you are seeing is fragmentation being done away with through competitive forces, which is slightly messier than it otherwise might be but means ultimately we will arrive at the best solution for devices.

RB: One of the key issues is fragmentation of the device landscape. Companies like the BBC can hit multiple devices but standards are absolutely essential for Tier 2 and 3 companies to reach the majority of consumers. You see a lot of the online video platforms and the ad serving platforms in existence actually making a business case out of having a library of catalogue of devices that can

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Chair: If we don’t resolve fragmentation will we always hit that wall of penetration?

NF: I would agree that as a percentage it’s very small but any company that doesn’t have it is clearly on the way down. Most payTV channels might not have an OTT proposition but every single operator needs to have it and they are increasing this need for standards, such as HTML5 and DLNA. These standards are being mandated because every company needs an IP strategy. Look at Virgin and their TiVo box for example. The casualties will be those that don’t keep up, either proactively or reactively.

PW: I think we’re making a big mistake if we think the focus should be on technology. It should always be on the viewer, and if we think we will change their behaviour just by putting an app in TV or a connection we better think again because viewers don’t change habits overnight. Live TV and EPG will remain the focus for many years to

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come and the legacy of devices out there will stay there for a long time. It might on the fringes complimenting viewing, such as being able to press the green button while watching a concert to buy that gig or CD, but it won’t replace the main viewing experience. There is also pressure on people sometimes to stop tweeting about an event on a second screen in the living room but immerse themselves in TV. NF: The irony is that the amount of video watching had gone up with all these extra devices. MR: I agree with what Phil said about not letting technology take over the experience and consumers don’t care whether something is OTT or linear. What I’m finding talking to content providers is that apps you do for a TV have to be complimentary and not just replicate what’s on linear TV. The OTT experience has to be weaved into linear; if it just looks gimmicky it will not be used. PW: The most successful way of promoting things on TV is from existing broadcasters. Cross promotion is what works and if there’s a call to action at the end of the programme that is most likely to be the biggest influencer of behaviour, so it has to start with where the viewers are. Don’t start in a walled garden or a different method of consumption as people won’t find it. Chair: For TV to delight you, what do we break those mission critical things down to? DS: One of the critical things to bear in mind is what we’re trying to do with smart TVs in general. You have to make a distinction between TV as an experience and TV as an object. TV as an experience works because it feeds this innate human desire and that’s not changing. But TV as an object is changing, in terms of its physical form and in terms of what we can use it for. I agree that much of what needs to happen within the TV world needs to come from broadcasters



and there’s a sense that the first obvious step is catch-up TV and there’s a strong argument when broadcasters talk in terms of catch up TV being an extension of broadcast. The obvious thing that then has to happen is the major broadcasters need to bring their catch-up services to the smart TV platform and they need to figure out how to create the integration between non linear services and existing linear ones to create seamless environment which sees the end-user still inside a broadcast world. Business models Chair: From a business perspective, current money is still inside traditional business models. Sky’s announcement to go off dish may change this a little. Where do you see the money Richard? RB: Sure the money is still tied to traditional companies. Today, there aren’t any stand-alone big subscription online video services of note that have succeeded. You could argue Netflix but it built that on the back of large DVD rental service in the US. And where the money will be is still tied up to existing payTV operators. They have the rights, brand power and customer relationships and a lot of new entrants to market will find competing with them very difficult. If

Smart TV roundtable

you look at Netflix content in the UK it’s poor compared to what Sky has. In theory Apple and Google have the money to do this but practically it is another matter. Apple makes money from its devices; it’s content margins are absolutely minimal. Amazon is an interesting one with its LoveFilm and tablet play. MR: Premier League football is the staple for Sky and what drives its payTV. PW: That’s where technology changes the game, when we go into flexible content rights and platforms that will enable consumers to mix and match. This is where the bundling versus à la carte argument comes in. LK: A global player could step in to buy these rights or Al Jazeera might (as recently acknowledged by ESPN’s European head in British papers) and sell it in the UK using the Sky platform possibly, and then sell those rights throughout Europe. Someone could do that to disrupt the existing market. But it will take conviction like when Sky first started out and lost money for the first ten years. Chair: We talk about apps a lot, is there any money in the app stores?

DS: In the context of TV there is still a lot of learning to be done in this environment. Intuitively it seems the TV is a very different device from the more personal handheld device. Our approach has been to focus on bringing immersive TV like experiences to TV rather than worrying about how many apps we simply bring onto the platform. It’s difficult to know at this stage. We used to talk about programmes now we talk about apps but an application within the context of TV is really just a technology to deliver a service, so we talk about LoveFilm, Netflix or iPlayer etc and the app is just background software rather than a new commercial phenomenon. PW: The idea that secondary and tertiary technologies are taking over TV is looking at it the wrong way round. The broadcasters are really the people to control this as they are the creative people that delight the audience. They are better at that than manufacturers and app writers. Now they realise they can use social media and other platforms to drive and compliment what they do on the main screen. Chair: It’s the old adage that radio will kill magazines and TV was going to kill radio and now you have lots of magazines about TV and radio...

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Smart TV roundtable

From the business side, I agree with Dan in that Darwin will take over and we’ll have some evolutions that will resolve that in time. But money is still with the same people. Do you have predictions what will happen in ten years time? RB: It will look much like today but with a little more viewing on an on-demand and DVR basis but there won’t be a sudden sea change. NF: I disagree. If you look at how Apple came in and changed the mobile industry I think something similar will happen to TV. The fundamental changes that are happening with social media, recommendations, content delivery, multi-screen and so on are having a major impact. It also affects advertising. PW: The fundamental concept of sitting there and watching TV however stays the same. Chair: Dan, will you start subsidising TVs like the seismic change we saw with mobile? DS: Never say never. However the reality is that in many ways what we’re doing in the content space with IP apps is the same as it was in the old days of analogue or digital tuners; we’re building technologies that allow content providers to use our devices as a platform to further their reach. There is of course some refinement of business models and other innovations that can only be done through cooperation of different industries. For me, this cooperation is the cornerstone of convergence. NF: You have to look at UPC’s Horizon box as a clear strategy in the cable space around convergence. The STB isn’t dead but the margins are getting smaller and smaller. One for the road Chair: To round up a wide ranging conversation, if we all imagine we are VCs investing in one thing we

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think will make a big difference in terms of user experience and business model, what would that be? MR: By far the most important thing is the EWPG and to have it blend linear, catch up, the recommendation engine and the ability to quickly access apps that are coming from the internet.

to interact properly with the TV two-way. A horse racing channel on TV is a good example, being able to bet on a horse race with a remote control. It’s a different way of consuming TV.

DS: I would like to put my money in HBO or the new equivalent to that - those building killer longform content - because that’s where it’s at.

RB: There’s fragmentation of devices that I talked about earlier but there is also fragmentation of the advertising landscape and anything that can organise and establish a single trading currency for advertising for connected TVs and other devices is going to be very well positioned.

NF: On the technology side, the landscape is going across multiple market segments and the clash or coming together of those is where companies can exploit commonality and differences between them.

Chair: For me, stemming fragmentation and common standards and trying to get these to work for a local market is the real challenge but it’s getting easier. Let’s see how our predictions stack up when we meet again this time next year.

LK: It’s someone who has the vision to hook all those things together, the technology and the consumer product on a global scale.

This roundtable took place at the DTG’s headquarters in London. Situated on the banks of the Thames with views of Parliament and the London Eye, the DTG’s modern conference centre, meeting facilities and state-of-the-art digital TV demonstration room are available free of charge to DTG members and can be hired by non-members for corporate events.

PW: What I think will change the model is transactions. And when I say transactional TV it doesn’t just mean buying content or the old subscription model, I’m talking about being able

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