Alot of marketing material in

the TV industry is based on the

attractions of a near unlimited

choice of content, through multiple channels

and large VOD libraries. But operators,

broadcasters and DVD retailers are all now

having to face up to the fact that the internet

really does offer unlimited choice. If there's

something you want to watch, and you've

got a decent broadband connection, some

patience, and a little technical knowledge,

you can get it online. It won't necessarily be

easy to find, and once you've downloaded

it, you may have difficulty moving it from

a PC or laptop onto your digital TV set-top

box, but these are still early days.

The market for online downloads of TV

programmes and films is expected to be

worth $6.3 billion by 2012, according

to research from Informa; and during

the last two years, the major

Hollywood content owners have finally

begun to understand the potential

operational and cost benefits of

online content distribution, and have

started licensing download

service providers to distribute

their content.

New services to have

entered this market in

recent months include

Amazon's Unbox service,

which offers Hollywood

films and TV content for

rental or purchase - both

to website visitors

and to US TiVO

users, following an agreement signed

in February. Wal-Mart has launched an

iTunes-style video download service that

includes reseller deals with all six of the

major Hollywood studios. Apple has launched

Apple TV, which will allow consumers

to move content wirelessly from computer

to TV; and there have been announcements

from Microsoft, making content from MTV

Networks, Paramount, Turner Broadcasting

and Warner Home Entertainment available

for download to Xbox 360 hard drives. Intel

has also formed an alliance with a download

website, coolroom.com, to release downloads

of Hollywood movies at the same time as

they are released on DVD. Could this, in

combination with the spread of PVR, mean

the beginning of the end of TV

as we know it?

At the very least, these new

services certainly offer

a theoretical threat both

to the revenues of pay

TV broadcasters and

operators and to the

DVD rental/retail

model. “There's

definitely a market

for people who

just want to rent

the odd movie and not have to subscribe

to a service to do so,” says Miles Holden,

sales and marketing director at the British

Internet Broadcasting Corporation (BiBC).

His company offers download services direct

to consumers and through partnerships with

ISPs, retailers and other online businesses,

using progressive download technology,

which means consumers can start watching

a piece of content before the download

is complete.

But 'over the top' providers like this still

face some fundamental problems. Distribution

of content almost always depends on an ISP

network outside their control, making it

difficult, if not impossible, to guarantee

quality of service (QoS). Secondly, content

from the open internet is still most likely to

be downloaded to a PC, and - in the absence

of widespread, easy to use home networking

- that means it's unlikely that the downloaded

material will end up on the TV screen.

It's all about content aggregationSo most aggregator websites are forming

partnerships with broadcasters, operators

and content owners. The fact that so many

operators are now supplying consumers with

hybrid STBs with an internet connection

gives them a potential route into the living

room. For example, the US-based aggregator

Akimbo Systems now forms an important

part of AT&T's Homezone internet/VOD/

“The fact that so many operators arenow supplying consumers with hybridSTBs with an internet connectiongives them a potential route into theliving room.”

Internet VOD

Could the recent proliferation of internet VOD, in combination with the spread of PVRs, mean the beginning of the end of TV as we know it? And how will serviceproviders cope with HD on demand,asks David Adams

Internet video on demand

page twenty six www.cable-satellite.com Cable & Satellite International march-april 2007

PVR/TV service. Its content library serves

as Homezone's VOD library, offered through

a broadband connection that runs directly

into the Homezone STB.

Meanwhile, many broadcasters and

operators are developing their own internet

portals, effectively becoming specialist

aggregators themselves, while triple and

four-play operators are investigating other

ways of using internet connectivity to offer

VOD services. BT's BT Vision offering,

launched in the UK in December 2006,

is based on a hybrid STB with a broadband

connection and digital terrestrial input.

Running on a customised version of

Microsoft's IPTV software, and delivered

via the BT Wholesale Network, it offers

BT broadband customers access to Freeview

digital TV, through the V-box STB, which

also incorporates an 80 hour PVR.

Customers must pay a one-off set-up

and installation fee, on top of the broadband

subscription fee. They then also have

the option of accessing a large VOD library

on a pay per view basis, with prices of

£0.99 for TV shows and £2.99 for premium

movies, for a 24-hour rental period.

Consumers will also be offered the

option of subscribing to content genre

on a month by month basis: for £6 per

month to subscribe to the children's

programming library.

“We're targeting people who are

interested in digital TV but don't want

a heavy monthly subscription,”

says Richard Griffiths, director

of technology strategy and devel-

opment at BT Vision. “We manage

every link of the chain, and that

allows us to guarantee a quality of

service all the way to the STB. We

have a QoS mechanism in that

network so that when someone

presses play it grabs a 1.6MB pipe

all the way from the video server

to the customer's home, to offer

an uninterrupted TV experience.

That's a really important

differentiator for us.”

Operators that can't offer use

of their own dedicated network

may also find themselves pushed

by competition from elsewhere.

STB and TV manufacturers might

want to add an internet connection

to equipment for their own

benefit, because if they

formed alliances with online aggregators

(or become aggregators themselves) they

could offer consumers another source of

content. Consumers in the US can already

purchase the RCA Akimbo Player, which

can be used to access the Akimbo content

library, while BiBC's Holden says the

company is working with retailers who want

to use such post-sales services as a way

of cementing relationships with customers.

Responding to internet VODThe response of satellite players to the

rise of internet VOD will also be interesting.

BSkyB's PC download service forms part

of a broad strategy encompassing use

of the DSL network made possible by

its acquisition of EasyNet. Its Sky Anytime

offering, a rebranding of broadband and

mobile TV services for sports and movie

package subscribers, will soon be com-

plemented with new near-VOD services

(via satellite - to be launched

in March) and then eventually

'true' VOD services (via the

internet - to be launched at

an unspecified point in the

medium term). The Sky

Anytime on PC service

currently offers subscribers

access to a library of

300 titles.

Stephen Van Rooyen,

director of product man-

agement at BSkyB, is bullish

about a strong start to the

PC download service (over

a million downloads recorded

by the end of 2006), about

the attractions of PVR

services with plentiful

storage, and a satellite

network offering guaranteed

bandwidth for HD broadcasts.

“BT and cable are entering

the market with VOD propo-

sitions because they think

that's where they can make in-roads,”

he says. But with two million of our homes

with PVRs, and our complement to that with

the push and pull VOD services, we think

that will strengthen Sky's portfolio quite

dramatically.” But he remains cautious when

talking about the extent to which subscribers

will be able to use those Ethernet ports.

“We haven't considered whether we'd open

up the STB to the outside world,” he says.

“There are all sorts of implications with the

rights holders in relation to it being a closed

system. In the short to medium term, I don't

think that's something we're planning to do.”

But it may be dangerous for operators

and content owners to place too many

restrictions on subscribers. As Nick Fielibert,

vice-president, CTO and chief architect at

Scientific Atlanta, Europe and Asia, puts it:

“If you try to restrict the customer, to stop

them from doing something, and one of your

competitors does allow it, then you lose the

customer.” That's likely to become

more important as the complexities

and obstacles currently holding

back home networking are over-

come, allowing consumers to move

content from device to device. “I

Internet VOD

“Many broadcasters and operators are developing their own internetportals, effectively becoming specialistaggregators themselves, while triple and four-play operators are investigating other ways of usinginternet connectivity to offer VOD services.”

www.cable-satellite.com page twenty sevenCable & Satellite International march-april 2007

think the major problem if you talk about

Web delivery is within the home, getting

content from one place to another,” says

Noel Matthews, vice-president of advanced

media at Tandberg Television. “I've got

islands of content I can't move between my

PVR and my PC. The techie geeks might find

a way around it but, for the average

consumer, even the concept of downloading

stuff off the internet is going to be difficult.”

This year, one of the free, automatic

software upgrades BT Vision will provide

for the V-box will enable users to move

music and photos from the PC to the STB,

the first step in a strategy designed to

ensure that this STB will be at the heart

of a home network. But Richard Griffiths

stresses that this does not mean they aim

to create an internet experience on the TV:

“They're just going to have a remote control,

they're not going to have a keyboard.

There has to be an easy to understand

user interface.”

That need to make using the system

as simple as possible may yet mean that

media centre PCs remain a minority interest.

“Customers would prefer just the one device,

the STB that can do it all,” says Fielibert.

“If I've got to pay for content from an

aggregator and content from a VOD system

that comes through the STB, and they both

cost about the same, then the service that

comes through the STB will win.”

Towards HD on demandIf the rise of VOD services and multi-source

hybrid STBs do act as a catalyst for a growth

in home networking, the technical defi-

ciencies of an average home will be

highlighted again if consumers decide they

want more HD services. That will require

further improvements in network capacity

(inside and outside the home) and

compression technologies.

BT Vision has been designed as an

HD-ready solution. “The V-box, the video

server, and the back end servers could

all be used for an HD on demand service,

but we haven't got the HD content on

there yet,” says Griffiths. “The main

problem we would have delivering it on

demand is bandwidth availability on the

access network. At the moment, BT

Broadband is up to 8MB, and HD using

H264 probably needs 10MB. You also

can't stream in real-time.”

Instead of waiting until BT completes

the 21CN upgrade of its networks, the

current plan is to offer a 'push' or near

-VOD HD service. That would mean

the consumer would have to pre-order

movies, for example, at least several hours

ahead. “Until we get the access network

capable of streaming in real time, HD will

be a pre-order, download and play model,”

says Griffiths. He says BT Vision customers

may receive a software upgrade to enable

this capability sometime in 2008.

By contrast, BSkyB is already pleased

with its current HD offering. And while

acknowledging the potential difficulties

associated with making HD content

available on demand, Van Rooyen wonders

how important such a service would

actually be. “Delivery via satellite, with

guaranteed bandwidth and HD PVR with

plenty of storage, is a great way to service

HD for the next period,” he says. “Whether

or not customers want HD on demand

remains to be seen. For the mid to short

term, HD is about live TV, about football

and other sports. But if our customers

demand HD VOD, it'll be down to us to

find a way to satisfy that.”

Operators also face the challenge of

securing revenue from ever more flexible,

viewer-defined, and PVR-influenced

services. But research commissioned from

ICM by BiBC in 2006 revealed that 55% of

those questioned would rather watch

advertising and get programme content

free of charge than pay for advertising-free

content, with the figure rising to 74% for

the 18 to 24 year-olds surveyed. At the

same time, the growth of interactive adver-

tising, and more viewers using PVR and

interactive functions, which reveal more

of an individual, or family group's tastes

and interests, may help improve the

targeting of advertising.

But the spread of VOD, PVR and home

networking, of services that offer endless

quantities of content, available on demand

via internet connections and in part from

websites, and viewed using a plethora of

different devices, still won't mean TV content

ends up being consumed like most internet

material, insists Van Rooyen. “VOD and linear

channels will happily sit side by side with

one another. There will be a loosening

of the TV schedules, but there will still

be a schedule, particularly for sport and

big shows,” he says.

Even so, internet VOD is still set to give

the industry quite a shock.

“If the rise of VOD services and multi-source hybrid STBs do act as a catalyst for a growth in homenetworking, the technical deficienciesof an average home will be highlightedagain if consumers decide they wantmore HD services.”

“For the mid to short term, HD isabout live TV. But if our customersdemand HD VOD, it'll be down to usto find a way to satisfy that.”

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page twenty eight www.cable-satellite.com Cable & Satellite International march-april 2007

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