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Cable/Video

Telcos Turn On, Tune In to TV

Proponents of packet TV gathered in Las Vegas today to declare broadcast TV as the next big service for IP-based providers.

BigBand Networks Inc. and VideoTele.com Inc., now a division of Tut Systems Inc. (Nasdaq: TUTS), were among those making announcements at the aptly named TelcoTV conference.

BigBand, which hitherto has made its market among cable operators, unveiled a deal with independent carrier SureWest Communications (Nasdaq: SURW). And VideoTele.com revealed plans to add compresson technology from Microsoft Corp. (Nasdaq: MSFT) to its wares.

While neither announcement is earth shattering, both point to the growth of interest in digital video, not just among the cable MSOs that seem to have finally gone full-tilt into building on their inherent video capabilities, but among telecom operators, which are starting to glom onto video as a value-added service with intriguing possibilities.

As noted in a recent Light Reading report (see Video Over IP) and Webinar, telcos see video not just as a triple-play element for bundling with voice and data, but as an enhanced service in its own right. Growing competition in the services market is helping things along. Technology too is opening up carrier options.

VideoTele.com, for instance, announced its licensing of Windows Media 9 compression from Microsoft. Like MPEG-4, a recently approved standard (see Video-Over-IP Charges On) with which it competes, Media 9 is a way to scrunch broadcast video into digital channels that consume less bandwidth. According to VideoTele.com, Media 9 takes about 50 percent less bandwidth than the current popular compression technique, MPEG-2. VideoTele.com plans to roll it into its Astria line of digital headend processors by mid-2004.

VideoTele.com says it's a couple of quarters away from offering a date for adopting MPEG-4, but a spokesman says support for that compression technique will be offered in 2004 as well.

VideoTele.com isn't alone in touting new compression techniques. Other digital TV gearmakers have announced support for MPEG-4, including Harmonic Inc. (Nasdaq: HLIT), Tandberg, and SkyStream Networks Inc.

As for BigBand, it will supply independent carrier SureWest, based in California, with equipment to run broadcast TV, pay per view, video on demand, and related video services over the carrier's IP network. Terms weren't disclosed, but BigBand characterizes the arrangement as a straightforward order involving some professional services.

The significance is largely symbolic. BigBand spent the last two years supplying digital video equipment to cable operators like Comcast Corp. (Nasdaq: CMCSA, CMCSK), Cox Communications Inc. (NYSE: COX), and Time Warner Inc. (NYSE: TWX) (see Top Ten Vendors to Watch). So its first announceable telecom customer is a chance to demonstrate that its gear is up and running in IP environments, not just HFC networks.

According to Seth Kenvin, VP of corporate development at BigBand, the SureWest announcement is also a chance "to fly our flag in the market and start to get more partnerships."

Indeed, partnerships are vital in the carrier digital TV market, where video headend equipment must interoperate with a range of transport and access gear. BigBand counts Allied Telesyn Inc. and Internet Photonics Inc. among its allies, for instance. And for its part, VideoTele.com has agreements with Calix Networks, Catena Networks Inc., Occam Networks Inc. (OTC: OCCM.OB), and Zhone Technologies Inc., to name a few.

— Mary Jander, Senior Editor, Light Reading


Archives of Related Light Reading Webinars:

Related Light Reading Reports:

boston beans 12/4/2012 | 11:15:40 PM
re: Telcos Turn On, Tune In to TV wish there were only something to watch on tv...
gbennett 12/4/2012 | 11:15:37 PM
re: Telcos Turn On, Tune In to TV When I were a lad we only 'ad three TV channels to watch - BBC1, BBC2 and ITV. It were bloody 'ard to find owt decent ter watch.

OK, enough of the Monty Python speak...

Today in the UK we've got 5 terrestrial, analogue channels (BBC1, BBC2, ITV, Channel 4 and Channel 5), and these will be turned off sometime in the next few years. We've got about 20 free-to-air terrestrial, digital channels (five of which are the same as the analogue channels). On cable you can get a slightly different mix of a few dozen channels, some free, some subscription. On digital satellite (Sky Digital) I get maybe a hundred or more channels, with many combinations of subscription package.

And, as boston beans says - THERE'S STILL VERY LITTLE THAT'S WORTH WATCHING.

My theory is that there's maybe a year's worth of good TV that has ever been made. That year of content is now smeared over many channels, and over perhaps a 2-3 year repeat cycle.

From time to time, decent new content is added to the reservoir. But at about the same rate, existing "premium" content kind of goes out of date and drops out of the reservoir.

It's disappointing how poor the latest movie content is. Look at the Matrix trilogy as an example. The first one was good. The second was awful, despite excellent special effects. I understand that the third has even better CGI, but the plot and direction are sadly lacking.

The crazy thing is that, apart from adding colour, the TV (and movie) experience is the same today as it was when I was a kid (note, here in Europe systems like Tivo have achieved little or no penetration compared to N.America). This would explain the continuing popularity of re-run TV programs and classic movies. The fact is these were made in the days when stories were important, not just CGI.

I assume this means there's an opportunity for innovation - especially by linking a TV channel to a PC's processing power.

Lord of the Rings is an example of innovation. The movie company tried a radical new approach - they actually stuck pretty much to the story line of a cult book, and it is massively successful. I gather the Harry Potter movies are the same (never read the books, so I can't confirm this). Contrast this with the pathetic screeplays of Jurassic Park, and any of the Tom Clancy books that have been made into movies (maybe The Hunt for Red October was an exception - good movie).

I certainly admire anyone who has the attention span to watch US network TV. With adverts, sorry commercials, every few minutes it always drives me mad when I go there for a visit :-)

Summary - if the telcos are going to do video, maybe they can come up with something more innovative than "triple play".

Cheers,
Geoff
rtfm 12/4/2012 | 11:15:32 PM
re: Telcos Turn On, Tune In to TV Geoff,

You said the UK has 5 free, over the air digital channels, replacing the analog, essentially? What sort of set-top-box (converter) is required, and how much does it cost?

NYTimes had an article on Berlin's transition, and how much of a mess the US is in.

Thanks,

rtfm
bitguy 12/4/2012 | 11:15:29 PM
re: Telcos Turn On, Tune In to TV Hi Geoff,

I think part of the problem is the fanatical grip that is kept on the content that is produced. The maximum possible revenue is squeezed out of anything half decent, and on pay TV the trash is lumped into the monthly charge. You know about once a year I get someone knocking on my door asking if I want to subscribe (I'm in Australia), and every year I ask them the same question - Can I choose the channels I want and pay just for those? The answer is always no, because they know that I'd choose three or four channels and they wouldn't be able to charge the amount of money that they need to to sustain their business. In other words THEY KNOW that most of their content is terribly sub-standard, and the only way to get people to watch it is to forcably bundle it with something that people might be willing to pay for.

Unfortunately I think without the content producers blessing, Telco's will be nothing more than a pipe that delivers the same stuff with a few fancy features (PVR, timeshift, vod), unless they bypass the content producers entirely.

For example, what if there was a "channel" that allowed people to "re-mix" old TV shows and then have it re-broadcast to everyone else who subscribes to the channel? I Dream Of Genie meets Star Trek might be unusual - but I think it would be a fantasic outlet for a heap of creativity out there. What if you could just produce your own TV show and upload it to the broadcaster? A PC, a video camera, a mike and some cheap editing software and your done.

The television and movie industry is only a year or so behind (IMHO) the record companies in suddenly realising that with a late model PC, and a video camera and some editing software I can produce or completely remodel video content (not to mention ripping it and sharing it on P2P). The record companies have had 10 years to give the public what they wanted - the power to choose which artist and what song went on their CD - why didn't they? Because they know that 3 of the 15 songs are good the rest are crap. The movie & TV people are next.

The record companies are fighting a rearguard action that they cannot win while trying to preserve their 50 year old "distribution-control" business model. Trouble is, their distribution control has disappeared overnight and they don't know what to do.

I think if a Telco was brave enough they could become something of a content 'facilitator' to enable people to use their service to create content. But somehow I don't see that happening without them upsetting the traditional content providers.

Cheers
Lee
gbennett 12/4/2012 | 11:15:29 PM
re: Telcos Turn On, Tune In to TV Hi rtfm,

The 5 free channels are analogue, terrestrial, free to air. No set-top box needed.

To receive digital, terrestrial, free to air, you need to have a good signal strength on your antenna, and you may need a new antenna, depending on how old it is and which transmitter is being used in your area. The coverage is spotty right now.

There are "up to 30" digital, terrestrial, free to air channels. Check out this link...

http://www.freeview.co.uk/what...

In terms of the equipment you need, there are quite a lot of set-top boxes on the market. Since you need to be in the UK to use this service, the easiest way is to pop into Dixons or Comet and check out what they have. The cheapest free to air box I've seen has just gone on sale from Argos at under -ú50.

I found this info on a Samsung box...

http://web6.scan.co.uk/Product...

Also there's a PC card and USB external box that can be used from Hauppauge. These generally include PVR software.

http://www.hauppauge.co.uk/htm...

Cheers,
Geoff

gbennett 12/4/2012 | 11:15:28 PM
re: Telcos Turn On, Tune In to TV Hi bitguy,

Excellent points.

One opportunity I think telcos have is to latch onto the "Home Theatre PC" trend that seems to be gathering momentum now.

Despite the efforts of the PC manufacturers and Microsoft (with XP Media Center Edition), the PC is still way too "user hostile" to take the place of a consumer device. I usually use my wife as a benchmark technophobic user and I can guarantee she will be the one that manages to jump out of the embedded apps into the O/S :-)

The other thing about HTPCs is that TV services are very localised here in Europe, so there's a good opportunity for local Telcos to add system integration value. For instance, in the UK we have this digital transition under way, and a lot of older people are confused about it. These are people who have the time to watch TV, and also have a good deal of dispoable income to be targetted by home shopping services, etc.

In many cases it may not be possible to screw a satellite dish to the side of your dwelling (in shared buildings, or if local planning regs forbid). So delivering content over the good old phone line is a great alternative. Cable penetration isn't that high in the UK either (I can't get cable, for instance).

BT is taking a very aggressive approach to broadband rollout, but there's only so much stuff you can squeeze over a DSL link. Given that most telcos have to replace about 5% of their copper loop every year, IMHO it makes sense to replace that copper with fibre as soon as possible. In fact BT has a bunch of aluminium cable in the local loop, and that needs to go ASAP.

Delivering content over a bidirectional connection (in contrast to satellite or terrestrial antenna) obviously makes it possible to create the kind of interactive services you describe.

Cheers,
Geoff
alchemy 12/4/2012 | 11:15:27 PM
re: Telcos Turn On, Tune In to TV Geoff Bennett writes:
Despite the efforts of the PC manufacturers and Microsoft (with XP Media Center Edition), the PC is still way too "user hostile" to take the place of a consumer device.

I disagree. Microsoft is eyeing the set top box business. The box will run some flavour (notice that Yanks can adapt to the redundant vowels of Brit spelling) of the evil Bill Gates operating system but it will in no way resemble a PC. The game is software, not commodity/low margin hardware. The M$ flavor of the week for signaling is SIP. SIP-based streaming video, SIP-based multi-media instant messaging (whatever that is), SIP-based telephony....

Personally, I think M$ will fail in this effort but set top box software is one of their major directions.

Some of this thread seems to blur the difference between service providers (MSOs, ISPs, RBOCs, Satellite broadcasters... ) and content providers. ISPs don't provide content, they provide access to content (unless you're a moron stuck in AOL-heaven). MSOs and satellite broadcasters follow the same model. It's hard to imagine that ILECs or CLEC/ISPs will diverge from this as they enter the video business. They buy content wholesale and distribute it. As the over-the-air broadcasters create ever more horrible programming, they'll end up in the same space.
whyiswhy 12/4/2012 | 11:15:23 PM
re: Telcos Turn On, Tune In to TV Cure cancer, make better movies (OK, fancy special effects do not a good movie make), write better books (sorry Adobe, hot type does not make the book), nor in the end change human nature.

Truth is, most of Broadband (and Silicon Valley for that matter) is a spin to cover the change in media/channels necessary to preserve content ownership, and to sell new hardware.

There is some real value there, but minimal. Now you know why is takes so long to "get there".

-Why
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