IPTV Roundtable
page forty two www.csimagazine.com Cable & Satellite International sept-oct 2007
Making IPTV work
IPTV roundtable
Robert Hopkins -managing director ®ional VP sales forEMEA, Kasenna
Developing and driving
the blueprint for
Kasenna's sales strategy
in Europe and the
Middle East for the last
three years, Hopkins has
been involved in
delivering some of
Europe's largest VoD
infrastructures and,
more recently,
middleware solutions.
Originally trained in
communications and
software engineering,
Hopkins has professional
marketing and product
management experience
in the telco VoIP
business at Dataflex, and
Amstrad before that.
Roger Bolton -executive VP ofcompression solutions,Tandberg Television
As a senior member of
Tandberg's management
team, Roger Bolton is
responsible for
international business
development in the
company's key business
segments.
His role sees him
drive the development
of solutions to meet the
video compression and
content delivery
requirements of
broadcasters and
network operators
around the world.
Bolton has a BA in
Electronics and
Computing, as well as
an MBA.
Werner Strydom -director of IPTVproducts, Irdeto
Werner Strydom joined
the MIH group in 1993
and transferred to
Irdeto, the NASPERS
group's technology
subsidiary, in 1994.
He currently leads a
team of experts in
charge of product and
programme
management for the
IPTV market segment.
Since 2003, Strydom
has also been the
chairman of the
working group within
the DVB Technical
Module that is
responsible for the
specification of the
DVB Simulcrypt Head-
End suite of standards.
Ian Walker - VP ofnew businessdevelopment for IPTV,ADB
Walker heads Advanced
Digital Broadcast's IPTV
new business
development strategy,
having negotiated supply
agreements with a
number of operators. He
joined ADB in 2003.
Walker has 15 years
experience in the pay-
TV industry. Prior to
ADB, he occupied a
number of senior
management positions
over four years with
Thorn Worldwide.
He entered the
consumer electronics
market in 1996,
working for Pace Micro,
NDS and Tandberg.
Dave Dougall - VP ofsales, EMEA, Harris
Dave Dougall works in
Harris' Broadcast
Communications
Division, based in the
European headquarters
in the UK.
Dougall has more than
20 years of product
sales and marketing
experience. He worked
for the Leitch Business
Unit as technical sales
manager and later as
director of sales and
marketing. Dougall also
served as R&D engineer
at Sony.
Dougall holds a First
Honours degree in
communications and
electronic engineering
from Napier University in
Edinburgh.
In CSI’s latest roundtable, executives from ADB, Harris, Irdeto, Kasenna, Tandbergand Thomson convened to discuss the stateof the IPTV market. Topics covered includeddeployments, service differentiation, businessmodels, MPEG-4 and the IC roadmap, EPGchallenges, DRM and watermarking, multi-room IPTV, and the impact of OTTTV.
IPTV Roundtable
Cable & Satellite International sept-oct 2007 www.csimagazine.com page forty three
Chairman: IPTV hasn't happened
as quickly or robustly as expected.
Are we any further forward with
deployments today?
Ian Walker: The forecasts remain
very positive, but from our point of
view, as a set-top box vendor that
sits at the end of the ecosystem,
we see that people haven't
necessarily found the ideal
business model yet. Initiatives like
OTTTV and Internet TV are entering
the market, and are more suited to
the dynamics and variability of the
Internet. Everyone knows IPTV will
be big, but it's been difficult to find
the ideal solution. Also, many
people used IPTV just like another
cable system, but they are now
waking up to the fact that they
need to find something a little
different, a little better.
Thierry Boudard: There are three
key facts when it comes to
deployments in my opinion. Some
Tier 1 telcos are succeeding in
launching and managing IPTV, but
they are not launching new
services very fast, such as any time
TV, catch up TV and so on. The
second fact is that some of the
Tier 1s have failed to launch IPTV
due to their choice of ecosystem -
a fact which has negatively
impacted the market. This has
trickled down to Tier 2 and Tier 3
players who want to learn about
IPTV and do the same as the larger
operators in every country. We've
seen many new deployments from
these smaller telcos in Eastern and
Western Europe, Africa and the US,
but they are afraid of the price of
the headend, the standardisation of
the set top box, and the
consolidation of the ecosystem at
the centre, including middleware.
The results for us are positive,
however, because we continue to
help some Tier 1s go further with
IPTV and we've met with new
smaller customers ready to start
with IPTV. Some are waiting for a
new business model, perhaps a
wholesale one, that will help Tier 2
and 3 telcos get the content over
IPTV, allowing them to just manage
the service and end-users. Maybe a
business model is needed that will
accelerate integration and service
launches.
Robert Hopkins: Clearly there's
progress being made, but every
technology brings a new challenge.
In addition, the Microsoft entry into
the marketplace put a lot of doubt
into people's minds, forcing them
to wait. In most cases, the
challenges remain. The Tier 1
operators don't really understand
this very new market, which is a
very hands-on, personal service. So
it's really a learning exercise. If you
look at the major European
deployments, they've all gone
through a faltering patch, where
they've stopped and assessed what
they're doing. Many are realising
that what they're offering with the
IPTV service is no more than a
cable service, just down a different
stream. They are reaching a point
where they're asking how they can
really appeal to customers. The
reality is that telcos have to
differentiate the service and come
up with something special to make
it unique to their way of business.
And until issues such as content
are resolved, they won't be able to
innovate.
Dave Dougall: We see it as a
delay between the business model
and the actual quality of service
that people can supply. Robert's
point is well made: at the moment,
IPTV services are just VOD or other
clones of cable. They don't really
have a model yet that they can take
advantage of the types of services
they can supply. We're getting into
a situation where we're caught
between what the QoS and
infrastructure can take versus the
services people want to be able to
supply to make IPTV viable and
different. It's a 'Catch 22' situation.
Yes, people are exploring it, but
they haven't yet got a service that
people will pay for and that
differentiates them from any other
platform. Some people still haven't
understood that it won't work if it's
just a simple replacement for
current cable systems.
Chair: If an operator doesn't
understand that they have to
provide much more than just cable,
are they doomed to pouring a lot of
cash before they can build a
successful business?
Thierry Boudard -marketing manager oftriple play, ThomsonNetwork IntelligenceSolutions
Thierry Boudard joined
Thales Broadcast
Multimedia, now part of
the Thomson group, in
2005 and has since
held a number of
management positions
such as solutions
manager for
IPTV/mobile TV.
Prior to joining
Thomson, Boudard was
product manager for
mobile solutions for
enterprises at Matra and
Nortel. Boudard also
contributed to the
migration over IP of
enterprise telephony for
EADS Telecom.
T he IP T V C ompa n y ™
Chairman -Chris Forrester
Cable & Satellite International sept-oct 2007 www.csimagazine.com page forty five
Robert Hopkins: This is both a challenge
and an opportunity. Telcos have a platform
that enables them to generate revenues in far
more diverse ways than traditional broadcast.
Unlike US cable, where the entire business
model is built around advertising, that's not
the case with IPTV. But unless someone
comes up with something creative, the cost
of the infrastructure and all the components
will prevent a model that pays for it.
Werner Strydom: Rather than asking us for
additional services, customers are coming to
us asking what business models can be
enforced and supported by our content
protection system. We find that very few of
the people we speak to actually have
innovative business models in mind they
would like to deploy. They know they would
like to do IPTV, but don't really know what it
is they'd like to do with it. I think once they
start exploring what it takes to deploy an
IPTV system, they encounter a lack of
standardisation, which makes them feel very
uncomfortable. There is a lot of
standardisation activity happening, but I think
it's actually adding to some of the confusion
and hold-up at the moment.
Ian Walker: There's an underlying and
perhaps incorrect assumption here that
things have been done in the wrong way and
they should have been done better. Most Tier
1 operators run massive incubation projects,
as part of a valuable learning curve.
Developing the correct business model has
required them to develop an understanding
of what it means to be a content provider,
which they didn't have before, despite being
experts in contribution and distribution.
Chair: How steep is the learning curve?
Roger Bolton: From our point of view, the
telcos have the finances to be able to sustain
a long learning curve and go through a long
period of not making money. If you look at
satellite operators, they're only now moving
into serious profitability after almost a decade
of running broadcast systems. The same will
happen with IPTV. At the moment, the
industry is building the first mover networks
to replace or substitute cable. Having said
that, I don't think telcos will take ten years to
come up with new or innovative services, but
until they get some form of subscriber base
to experiment with, they will always think
about the business models. They're doing the
right thing by launching early with 'me too'
services, but they're going to come through
with a lot more on the back of that.
Chair: Have problems such as MPEG-4 and
chipset prices been solved?
Roger Bolton: MPEG-4 is still in its infancy,
with the number of adopters barely visible
and still some distance to go in improving
the bit rates. MPEG-2, for instance, went from
8-10Mbps for SD services to the current
level of 2-2.5Mbps. Some operators outside
Europe are running HD at 6-8Mbps and we
will see that number come down as the
second generation of products, which
promises up to 50% greater efficiency, is
fully deployed.
Werner Strydom: How disruptive could the
Chinese variant of MPEG-4, AVS, be to this?
Roger Bolton: AVS is MPEG-4 with some
tools removed so it will probably not be as
good as MPEG-4. It's not an improved
standard as such; it's more of an intellectual
property issue.
Ian Walker: One of the main obstacles has
been the readiness of the networks to handle
bandwidth-hungry content. Obviously, the
business model suffered without the
advanced video coding offered by H.264 or
VC-1. Certainly, everything we are doing is
based on these codecs, meaning that
bandwidth is coming down and the picture
quality is good enough. Consumers are more
tolerant towards lower quality.
Thierry Boudard: High ARPU services will
require high quality content. However, I also
believe that many business models will be
based on low quality.
Dave Dougall: Does this mean that all the
investment in HD goes down the drain?
Ian Walker: Not at all. That's still essential
for content origination; what we are talking
about is how the content is distributed and
what consumers do with it afterwards. We're
talking about differences between IPTV and
other forms of TV, and in certain cases less
quality will be acceptable.
Werner Strydom: I'm not sure that people
are willing to pay that much for high quality
Internet TV.
Thierry Boudard: Telcos don't want to
invest in headends for 100 HD channels, but
good quality is mandatory for distributing
premium content, which is why there are HD
channels out there waiting for the content. It
comes down to the difference between the
old linear way of congesting content, where
the expectation is to match what we've had
until now. In the case of interactive,
personalised content, on the other hand,
users may be willing to accept lower quality.
Robert Hopkins: Herein lies the challenge
of the IPTV business. Not only is the model
very different, but the expectations for the
user experience that we've all been pushing
is equally different. IPTV is about content on
demand; when the consumer wants it, how
they want it. The expectation will be high
because they expect the programming to
match what they've paid for. The fact is that
we don't know what the consumer really
wants, despite us telling them.
Roger Bolton: Some of the Tier 1 telcos
have held back their launches because they
are afraid the initial quality they are providing
is suspect. Very few of the IPTV operators
IPTV Roundtable
page forty six www.csimagazine.com Cable & Satellite International sept-oct 2007
have bought premium content so far.
Belgacom is one exception, having bought
football rights in Belgium. It was adamant
that it wanted its quality to match that of
analogue TV, at whatever bandwidth.
However, there is a large number of Tier 1s
who have yet to go commercial because they
don't believe the quality is there at the bit
rates they can afford to provide. We're also in
danger of confusing two different services, ie
video over the Internet, and IPTV, which is a
TV-centric service. Quality expectations
between the two are very different.
Thierry Boudard: Internet TV is a great
opportunity for operators. People have clearly
adopted it and are actively looking for video
over the Web. It is absolutely possible to give
people access to these Internet-based videos
on their TV screen, with a much nicer user
interface. It then opens the door for a very
different business model that would help
operators to differentiate their IPTV service
and easily enrich their content catalogue.
Roger Bolton: That will probably come in
later stages of IPTV rollouts.
Dave Dougall: I still come back to the basic
premise that if you look at the models, they
are all about subscription. Yet, the real money
is advertising, and telcos haven't yet
approached advertisers pitching services
such as targeted advertising.
Robert Hopkins: That's where most of the
IPTV operators are going. Another question is
whether any of them, especially the Tier 2
and 3s, have the deep pockets needed for
premium content, particularly movies-on-
demand content.
Chairman: Is there room then for an IPTV
content aggregator to do the negotiation?
Roger Bolton: That's how all the cable
operators in the US have operated for
decades, while BroadWing started to work
along these lines for the US IPTV market
several years ago. It works in America
because the market is homogeneous, but it
wouldn't in Europe.
Robert Hopkins: Tier 3 telcos with 5,000
subscribers don't have the purchasing power
for content. Looking at the model in Europe,
the super content aggregator is a challenge
beyond what is currently feasible.
Ian Walker: I agree with this content
aggregation argument in Europe. Going back
to differentiation, every STB we've delivered
so far has included DTT functionality on top
of IPTV because there is consumer and
customer demand for both. Beyond that,
operators want to focus on the interactive
personalised element that only IPTV enables.
Thierry Boudard: Interactivity is mandatory
for valuable VOD services. It's why some
cable operators, especially in German-
speaking countries, where cable is well
positioned, are looking for a technical
solution to add interactive VOD to their live
offer. It's a key differentiator for IPTV-based
VOD. The benefit of starting with DTT
channels is that telcos don't have to invest in
costly headends.
Werner Strydom: There are vast parts of
the world with millions of eyeballs that don't
have the infrastructure to run IPTV. They have
existing satellite systems and with the advent
of WiMAX have the opportunity for further
hybrid capability, which might prove a good
mix for them.
Roger Bolton: A mix of broadcast linear
channels will be required for the foreseeable
future, because otherwise the IPTV service
will be targeting too few people.
Robert Hopkins: Nobody takes anything
away from broadcast TV. The problem is
applying the interactivity to that broadcast,
and adding some value it.
Chairman: I can see importance in the
marketing blurb for catch-up TV, but how
important is it in the actual consumption?
Robert Hopkins: Absolutely critical. Looking
at Switzerland, while operators there can't
get good VOD content to drive these
services due to their small subscriber
numbers, they do have very liberal views for
content recording, which drives all on-
demand content usage.
Roger Bolton: The problem is there's no
financial model behind it.
Robert Hopkins: There is if it's included in
the base package, as a low grade
subscription for example, which is a
stickiness factor. It also drives the concept of
interactivity.
Ian Walker: One way to encourage users to
watch advertising is to make it compelling
and interesting. Another way is to incentivise
people - for instance, building credits by
watching adverts, which then give discounts
for certain content.
Werner Strydom: A step further is to
incentivise consumers to provide their usage
data back in order for them to be profiled
properly. That will allow for targeted
advertising.
Robert Hopkins: All these mechanisms are
in their infancy. One of the telcos we work
with has been looking at getting off their
proprietary encryption system and moving to
off-the-shelf on demand content, but they
don't know how to do this. The transition is
going to be huge - and painful.
Roger Bolton: That's nothing new, however.
It's happened in satellite broadcasting, where
the two biggest operators are running on
proprietary systems. All of them, in fact, are
running on MPEG-2 in SD and don't yet have
a plan to move to MPEG-4. But they've
managed to twist their original model to
make them highly profitable. Widespread
standardisation isn't necessarily the answer.
Ian Walker: Apart from the learning curve,
an important element is just taking share of
available subscribers. First mover advantage
was a critical competitive driver in the growth
of pay-TV, and the same applies to IPTV.
Sometimes you don't have the luxury of
waiting for a new technology to become
robust enough.
IPTV Roundtable
T he IP T V C ompa n y ™
Chair: Is HD solvable over a telco network?
Thierry Boudard: Several telcos have
launched HD over IP, but with an issue about
the level of eligibility due to the requirement
for 10-12Mbps. This restricts the service to
end users connected by ADSL2+ with a
maximum of one kilometre from the DSLAM
and so we have been seeing a strong
demand from our customers for next
generation compression chips to make HD a
reality over DSL.
Roger Bolton: The rapid increase of
subscribers connected to the same
exchanges is making it difficult. Then you
have the issue of content availability.
However, not all HD has to be real time. To
get HD in the UK on the DTT platform will
require spectrum either through analogue
switch off or a bidding war, the latter which
would preclude most broadcasters from
acquiring it. What will happen is that a lot of
HDTV will be delivered over push-VOD,
which can be trickled down at any time. At
the moment, this is probably an easier way
of doing HDTV.
Dave Dougall: It's not a technology
argument in my mind. I think HD will come to
IPTV over time, whether push-VOD or a
different system. It's the unique content that's
missing. Cable was successful to start off
with because it brought with it multi-channel
subscription and content users couldn't get
through any other means.
Robert Hopkins: IPTV is about individuality
and interactivity, theoretically giving
consumers the service they want, on their
terms, and on any device. While that's the
Holy Grail, all these issues muddy that and
compromise it every time. Even with HD
content, will content owners allow their
content to go out?
Werner Strydom: In many cases, they
actually require that.
Robert Hopkins: But they won't accept
anything less than 12Mbps in MPEG-4 in
most cases, whereas the distributors are
saying they need it down to 8Mbps. So
there's a challenge between product quality
and business models, and these two aren't
coming together. IPTV gives you the
capability not to consume bandwidth on the
rest of the network, unlike cable. Apart from
the headend cost, you have to make a
business call about what you're going to put
over that bandwidth.
Werner Strydom: Now people have enough
choice as it is, and providing them with more
choice is not going to make matters any
easier. It comes back to the super aggregator
concept again, whereby acquiring content for
a small market remains very difficult.
Roger Bolton: We're back to the niche
programming and the size of the market that
can be served. It's a difficult business model
to achieve, and IPTV profitability will either
have to pull in more money per subscriber, or
it will have to get more subscribers. That's
why a hybrid model always looks more
attractive. US IPTV operators will certainly
buy content off a satellite broadcaster to get
the economies of scale, giving them the
ability to leverage the broadcast systems and
at the same time utilise the IPTV network for
a small audience.
Chairman: Assuming the hybrid model is the
most efficient and popular, how do you
address the challenge in the EPG?
Roger Bolton: Today's systems are
manageable with 200 channels or so, but
when you have 30,000 hours of content
sitting on the VOD system, then you have to
find an alternative approach.
Thierry Boudard: We can aggregate the
EPG from any number of channels over any
platform, say 20 channels from satellite and
20 from cable or DTT. We've already
deployed this type of hybrid EPG for Orange,
and what we're doing now is to manage
network PVR and any-time TV services either
on IP or DTT channels by taking and
transcoding the content from one network to
another seamlessly and with little or no
difference in picture quality.
Ian Walker: In a hybrid environment, the
various combinations of proprietary
middleware and multiple CA systems makes
the switching of channels between the DTT
and IPTV platforms a challenge.
Werner Strydom: I hear complaints from
consumers about the lack of intelligence in
the EPG. Just putting all this data together
and dumping it on the screen is not the best
long term solution. Rather, the user should
be able to Google the EPG and find the
content they want. It goes beyond just being
a pure search element. When you look at
Web communities and how they work in
terms of access to content, those types of
features and that level of interactivity should
be enabled. I would add that it should also
be possible to keep the content which you
know that users will consumer for more than
seven days.
Robert Hopkins: The challenge, therefore,
is to go beyond VOD storage and intelligently
manage the storage of that content in a way
that the relevant content, including the long
tail, is in the right place on the network. That
intelligent content distribution network is
commonly overlooked, even though it's as
mature as IP caching technology is today.
The same technology principles apply, but
the problem is the broadcast space doesn't
comprehend the use of IP technologies in
their arena.
Roger Bolton: Cable pushes content out to
the edge of the network. They push the VOD
out into regional centres and swap content
according to usage.
Chairman: Are companies such as Joost and
Bablegum providing the Holy Grail for IPTV
suppliers?
Ian Walker: It's much closer to what the
industry will eventually evolve into. We're
thinking of telcos and ISPs as cable
companies offering fully a controlled, bundled
set of products and services for a price.
Telcos are stepping back, wanting to increase
network traffic first and take a cut of
associated revenues. What they are offering
Cable & Satellite International sept-oct 2007 www.csimagazine.com page forty nine
IPTV Roundtable
is hosting and quality control. They want to
offer managed, quality controlled portals,
instead of just being just a dumb pipe
provider. I think OTTTV will develop quickly in
parallel with more conventional managed
services.
Dave Dougall: These are the types of
systems you can see investment and growth
opportunities, whereas with IPTV, it's
sometimes a sense of a technology looking
for a home. What telcos have forgotten is
their expertise is moving the content around.
Robert Hopkins: What they're looking for
now is service provisioning. When they try to
provision and develop these services,
however, the infrastructure or application
environment in many cases doesn't allow
them to move outside set constraints.
Werner Strydom: I'm questioning whether
Internet TV service providers such as Joost
do anything different from what one would
do with a VOD server on IPTV. Many Internet
TV services have a poor UI, and are in
essence nothing more than a big VOD server
with poor content categories. It's not
innovative enough in my opinion.
Chairman: Is there a need for watermarking
and other forensic techniques within IPTV?
Werner Strydom: The reason why it's more
applicable to IPTV is because we're dealing
with a different type of business here. Telcos
don't accept the fact that there should be a
smart card in the STB; they want a software
only solution. However, despite the popularity
of software-only solutions, they aren't
particularly secure and require a lot of
attention in order to maintain security. It's
critical to include the STB unique
watermarking in the content in software-only
solutions. This is because you have to accept
that the content will get out somehow and
that you must be able to track it and close
the point where it's leaking out.
Dave Dougall: Are we are simply applying
old rules with watermarking to something
that will be obsolete in ten years' time?
Robert Hopkins: Indeed, are content
owners, therefore, making the same mistakes
as with Napster?
Ian Walker: It's not universal to all types of
content. For movies costing $150m studios
want to get paid and remunerated for that.
Music is more flexible, and there is plenty of
similar content around, which doesn't cost a
lot to produce, that people want to consume.
Robert Hopkins: One of the things that
studios like about IPTV compared to the
conventional model is that they can see
who's watching what in real-time and they
can see how TV advertising is consumed on
the IPTV platform.
Roger Bolton: That's the studios' model for
measuring how they can make money and
target people with their content by making it
more relevant. What we will see is the DVD
follow the CD into obsolescence, which IPTV
will hasten. IPTV will have a huge influence
over the public when they find that they can
get their video content the same way they
use iTunes to get their audio content. That's
certainly a benefit associated with IPTV.
Chairman: When can we expect multi-room
IPTV?
Roger Bolton: IPTV is different from
satellite or cable in this respect because
receiving three or more channels in the home
down the ADSL line puts a significant strain
on bandwidth. While every channel on the
satellite or cable network is available to every
household, with IPTV it's all available at the
headend, making this a challenge.
Thierry Boudard: These network limitations
make multi-room IPTV almost impossible
today, but with new broadband technologies,
it will become possible in the next years.
That's a key differentiator for FTTH networks.
In France, the battle for differentiation
involves VOD content rather than multi-room
IPTV. To launch a second TV set at home
requires a high bandwidth, meaning a low
eligibility rate. Converged telcos in France are
also thinking about WiFi TV and are preparing
live content in low resolution at the headend
for PiP either on the TV set or for WiFi usage.
For a mobile operator, this is also a new way
to enter the home networking market.
Werner Strydom: I agree. It doesn't have to
be an HDTV set, when it can just as easily
be a PMP with QVGA screen.
Roger Bolton: You don't even need multiple
boxes throughout the home. In theory, one
box should be able to distribute round the
home in some format, perhaps with smaller,
cheaper adapters. We should be prepared to
see IPTV completely change in the next five
years. In those markets where competitive
services exist, telcos are actually in a
defensive mode. But things will move on;
IMS, for example, may come in the second
generation of IPTV.
page fifty www.csimagazine.com Cable & Satellite International sept-oct 2007
CSI
IPTV Roundtable
T he IP T V C ompa n y ™