IPTV Roundtable

page forty two www.csimagazine.com Cable & Satellite International sept-oct 2007

Making IPTV work

IPTV roundtable

Robert Hopkins -managing director &regional 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 ™