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Video services

AOL Goes P2P for Video

Time Warner Inc. (NYSE: TWX) division AOL will use a peer-to-peer approach borrowed from the file-sharing world of Kazaa and BitTorrent when it begins delivering high-definition Internet video to consumers next month.

Like other ISPs aiming to distribute video content over the public Internet, AOL faces the challenge of delivering its service across increasingly congested broadband pipes. And 93 percent of those pipes are owned by cable and telephone companies wanting to offer their own high-bandwidth services to consumers. (See AOL Teams for Broadband and LR Poll: Net 'Squatters' Should Pay.)

To deal with the potential bottleneck in the last mile, AOL plans to borrow space on its customers' PCs to store video content at the edge of the network. As customers begin ordering video content, small parts of the files are cached on their hard drives. When a consumer orders a video, it is pieced together from PCs (peers) nearby on the network, avoiding the need to push the entire file out from a central server. Once pieced together, the file is wrapped with digital rights management (DRM) code to control its usage after download. One of AOL's DRM rules, for example, is that the user must be connected to the Internet in order to view the file.

AOL's new video service, called "In2TV," is set to launch in March and will feature high-definition content delivered over the peer-to-peer network. AOL spokeswoman Jennifer Rankin says the initial content offering will be free, on-demand streams of older Warner-produced shows such as Alice, Chico and the Man, and Wonderwoman. But this, she says, is just the beginning. (See AOL Buys Video Search Engine.)

Two years ago AOL enlisted the help of Sunnyvale-based video distribution company Kontiki to help it devise a video strategy. Now AOL is using Kontiki's video storage and management systems designed to deliver video on a large scale. “The last mile is always a problem,” says Kontiki VP of marketing Scott Sahadi. “You’re competing for that bandwidth with television, with VOIP, with Skype calls, with instant messaging and email, and [then you] have to deliver that one-gig file of Starsky and Hutch.” (See Verso Tests Skype Filtering.)

AOL's approach is similar to the one adopted by the British Broadcasting Corporation (BBC). In 2004, the BBC conducted trials of an "Interactive Media Player" that used BitTorrent P2P technology to offer free access to archived TV programs. (See P2P Gets Serious.) Following that initial trial, the BBC also turned to Kontiki and integrator Siemens Business Services for further development and has just completed a 5,000-person pilot service. Further details are currently unavailable.

But the peer-to-peer concept itself has negative connotations for many consumers, as it is often associated with illegal file sharing and virus spreading. (See Grokster Shuts Down.)

Sahadi says Kontiki's brand of P2P is unlike Kazaa-style file sharing because there is never any direct contact between the "peer" computers themselves. (See Broadcast TV Will Never Die.) And he believes P2P networks shouldn't be judged on their somewhat checkered past: “The peer-to-peer industry has unfortunately grown up in this sort of illegal environment... based on file sharing." Meanwhile, AOL says it will be upfront with customers on the technology. “We make it very clear that this is not a file sharing network,” says AOL spokeswoman Jaymelina Esmele.

AOL will inform customers that their computers are being used for local video caching, and will give them a chance to opt out. Esmele says users can also adjust their PC settings to control how much hard drive space is being used.

On a more practical level, will customers be comfortable loaning out space on their hard drives to store video for other people? AOL is betting that video customers will understand their PCs are part of a secure "grid" that makes movie delivery faster for everybody. Kontiki believes its brand of video distribution is up to 25 times more efficient than traditional approaches.

If consumers do consent, AOL could have an advantage over other Internet video services. It might also find itself less beholden to the cable and telephone companies that own the broadband pipes.

In terms of its content offering, AOL is probably just getting started. AOL’s parent, Warner Brothers, owns perhaps the largest catalog of video content anywhere with over 20,000 video titles, and a quickly growing portion of it will be available on demand at AOL.com. (See AOL/Google: VOIP Buddies .)

With all that content and a sleek way of delivering it, AOL might steal away a lot of eyeballs from cable and telco TV. (See Google Says No to QOS Fees.) To that end, AOL has signed a deal with Intel Corp. (Nasdaq: INTC) that will make its video files watchable on regular televisions. It is also working with Microsoft Corp. (Nasdaq: MSFT) on distribution of video through the Windows Media Center, which would accomplish the same end. (See Intel Teams With Google, AOL.)

AOL has a lot to gain from its peer-to-peer Internet video business, maybe even a new identity. The company is undergoing a difficult transition from its subscription fee roots to new revenue from content and advertising. A compelling video offering may be crucial to AOL remaining an oft-clicked Internet destination.

— Mark Sullivan, Reporter, Light Reading

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paolo.franzoi 12/5/2012 | 4:07:27 AM
re: AOL Goes P2P for Video
metro,

Actually, it won't. The video services of the Operators will come in at a higher QoS than any Internet traffic.

Biggest issue generally will be some of the Bit Torrent issues with opening holes in firewalls and creating DMZ zones.

seven
metroman 12/5/2012 | 4:07:27 AM
re: AOL Goes P2P for Video - OK so I understand the concept but it will create issues with operators offering their own video services.

One statement made in the article says "the user must be connected to the Internet in order to view the file". I assume that this will incorporate some form of registration with a server doing content verification. Assuming that this exchange will have a unique port number (UDP/TCP) it would be easy for an operator to filter these messages and prevent use of the file. If "connected to the internet" means having link and an IP address then there is no real security.

Metroman
paolo.franzoi 12/5/2012 | 4:07:26 AM
re: AOL Goes P2P for Video
Mark,

Telco TV equals Cable TV and Sattelite TV. Anybody going to disconnect their cable to be able to hook up their AOL connection?

Depends on: Content and Price.

In places where their won't be an upgraded network deployment, this might be quite viable. But in those places, digital satelite will be the biggest challenger.

seven
Mark Sullivan 12/5/2012 | 4:07:26 AM
re: AOL Goes P2P for Video Is this a real threat to telco TV?

Will consumers put up with having video caches on their machines?

Will the RBOCs do anything to impair AOL's P2P plans?

I know what the 'interested' parties say. What do YOU say?
materialgirl 12/5/2012 | 4:07:25 AM
re: AOL Goes P2P for Video Dear Mark:
I think this is the future, and that we have a hardware-oriented crowd here. These "underground", shared, technologies have always taken off quickly because they alleviate a scarcity. We all have more storage and CPU power than we use, which will only get worse. We all have less bandwidth than we would like. If possible, we will alleviate the scarcity with the plentiful resource.

Yes, meshes and grids are the ultimate nightmare of centrally managed monopolies, who benefit on scarcity. If possible, users do what is best for them. The ultimate question will be how compelling the content is anyway.
rjmcmahon 12/5/2012 | 4:07:25 AM
re: AOL Goes P2P for Video Telco TV equals Cable TV and Sattelite TV. Anybody going to disconnect their cable to be able to hook up their AOL connection?

I think this question can be asked of VZ's FiOS TV as well. Are people going to disconnect from existing cable/satellite providers and switch to VZ's FiOS TV service? If people don't switch to FiOS TV then what happens to VZ's fiber business case? (Can they make it on internet/voice alone?) If it turns out there is no ROI then isn't it in VZ's shareholders' interest to discontinue the projects? Where will that leave the US when it comes to competitive communications infrastructures?
Mark Sullivan 12/5/2012 | 4:07:25 AM
re: AOL Goes P2P for Video Verizon filed documents this week saying that it plans to reserve 80 percent of the capacity on the FiOS fiber network for Verizon-branded services. He who owns the pipe is in control. Interesting.
Mark Sullivan 12/5/2012 | 4:07:25 AM
re: AOL Goes P2P for Video Thank you. As for the content, I cant think of any player in better position than AOL, assuming, of course, that the bond with their parent company is strong. -M
stephencooke 12/5/2012 | 4:07:24 AM
re: AOL Goes P2P for Video Mark,

Other than for access purposes there is almost zero reason to deploy new fiber in the US. The amount of fiber that was deployed since 1995 is enormous. Here is the thing though, it is not dark fiber that matters but dark wavelengths. Assume that any existing fiber, whether lit or not, is at maximum 10% utilized (as there are up to 160 lambdas specified on the ITU grids depending on frequency spacing using all bands). Currently the standard is 10GHz/wavelength for commercial purposes with some companies talking about 40G. I don't see 40G as worth the effort due to its susceptibility to non-linear and third and fourth order effects (eg: PMD). The potential here is for 1.6TB/s/physical fiber. Other than in labs I don't think there are any such links in service.

The point is that Peter is right for the metro and core networks. However, the amount of network bandwidth necessary is defined by the edge. Until higher bandwidth access technologies come about, and the state-of-the-art ones get deployed in volume, there is no real need to add any more backbone or metro fiber.

Steve.
Mark Sullivan 12/5/2012 | 4:07:24 AM
re: AOL Goes P2P for Video Former BT CTO Peter Cochrane tells me that there is so much dark fiber laying around in the U.S., and that the pipe that is actually being used isn't being used nearly to capacity. Seems to me that the telcos could easily remedy the U.S.'s poor ranking among developed countries in broadband proliferation if there was a compelling business reason to do so. Right?
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