Will Software Kill the IPTV Set-Top?

Verimatrix Inc. is in the process of building a PC application that will allow IPTV customers to watch all of their TV channels from any broadband-connected PC in the home, Light Reading has learned.

The software app, code-named "Secure PC Player," will help carriers convince content makers that it is possible to create a media player for the PC that keeps content every bit as secure as a set-top box, our sources say.

The Verimatrix system includes a session-based watermarking method that leaves a digital fingerprint on each content stream entering a PC. That way, if the content later shows up on the Internet or somewhere else it shouldn't be, the service provider could conceivably trace the content back to an individual customer.

This technology, which Verimatrix calls "VideoMark," has already been deployed in India in Mahanagar Telephone Nigam Ltd. (MTNL) 's IPTV service, but that deployment was tethered to a set-top installation. Elsewhere in Asia, sources say carriers are testing the Secure PC Player software on IPTV networks as an alternative to having multiple set-tops inside the home.

As Verimatrix tinkers with the project, it is working on both a "lean forward" interface (one more suitable for use at a PC) and a "lean back" interface (one more suitable for a home media center PC that is operated via remote control from the couch), according to one source.

What isn't exactly clear is the significance of this kind of product. A lot depends on how carriers embrace the technology and how they package it with their current offerings.

Initially, the software could simply allow for more flexible TV-viewing inside the home. Why be limited to the living room when, with a bit of software, you can watch all your channels via a WiFi network using Junior's Xbox or Dad's office computer?

In homes that already have media center PCs as part of the entertainment center, this kind of technology could eliminate the need for a set-top box altogether, sources say.

Our sources contend that Verimatrix is not adding place-shifting to the software's selling points, yet, but the technology could definitely allow carriers to offer a direct alternative to Sling Media Inc. 's Slingbox, with no additional hardware required.

Another possibility for deployment could center around making Internet videos as accessible in the living room as regular TV channels.

Speculation will run rampant until the technology is deployed. But, whatever the use, this marks a clear departure from the other trend carriers are embracing, which is to jam as many functions as humanly possible inside a single home gateway device. (See Verizon: Lights, Camera, Actiontec!, Entone Thinks Outside the Home, Moto Says Hello to DSL Gateway Market, Cisco: Do-it-All Gateway on the Way , and Telcos, Vendors Battle Over Gateway.)

Verimatrix won't comment on the unannounced technology yet. But one source close to a cable provider says carriers aren't the only ones interested in liberating TV-watchers from a set-top only experience. That source says Comcast Corp. (Nasdaq: CMCSA, CMCSK) has been in discussions with Verimatrix, though neither company would comment on the alleged talks.

The bottom line, according to analysts, is that no one really knows what the main entertainment device in the home will be in the next few months. "Ultimately, the more devices in the home you can video-enable, the better," says Heavy Reading analyst Rick Thompson.

— Phil Harvey, News Editor, Light Reading