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IPTV and VoD: the great content adventure

Time for a new deal between ISPs and content owners

Offering a DRM-riddled video store is an easy evolutionary step from legal music download services and easy to "white label" – but the issue is not what you can sell to people to play on their computers, it’s the structure of how they are able to transport that material around their home on different devices that proves the key factor.

Big names like Microsoft, Intel, Sky and BT are betting on Windows Media Center and decentralised networking (e.g. Kontiki’s P2P distribution system) as the next paradigm for set-top box-powered TV services and the so-called “home ecosystem”. It’s not going to work any time soon, and tell anyone who argues differently to run a cold shower, take a breath and talk to ordinary Joe Public in his local pub.

People don’t interact with TVs like they do with a PC, but crucially, it just costs too much. Nobody in their right mind wants to be paying another £500-1000 just to watch their photos on their TV screen. Consumer gadgets have already burn a hole in most people’s credit cards to compel them to put a PC under their TV. Sky and NTL amortise the cost of their set-top boxes against the length of a customer’s subscription, and Freeview boxes cost hardly anything in Argos or Dixons.

Perhaps the affluent executives that devise these new ideas and their social circle might happily indulge themselves, but for the rest of the mass market its one expense too far when they’ve already bought a widescreen TV, DVD recorder, Pay TV subscription, broadband connection and computer(s). Give me a very cheap, simple pay-as-you-go Linux box with network PVR that works with what I have already, and I might just think about it. But IPTV is so much more than just that – that’s only one idea amongst an ocean of possibilities.

The feeding frenzy that is the newborn IPTV industry has inevitably thrown up a wild chaos that is the hallmark of new technological eras. Once of the most interesting dynamics is that of the so-called content aggregator – trusted third parties that manage the rights for many diverse content archives on behalf of their owners. As a broker or agent, they provide a single point of contact that can be considerably more efficient for operators to deal with than each rightsholder and give wider access to more markets.

Convenient middleman

Equally, content owners are finding it easier to grant sub-licensing contracts to one central point of contact than dealing with several hundred operators worldwide. Their reward for being the convenient middleman is a percentage of the typical revenue-share arrangement that constitutes the guts of the main licensing deal – a usual arrangement being 50 per cent to the studio, 25 per cent to the aggregator and 25 per cent to the operator. In other circumstances that deal would be 60:40 in the content owner’s favour.

Even technical vendors are now seeing the advantage of adding value to their core product portfolios by entering into strategic partnerships with rightsholders (for example, the recent buyout of the On-Demand Group by VoD server vendor SeaChange), or bundling in a few hours of high-definition back-catalogue material with every purchase.

The whirlwind excitement of new age always ends up with casualties, and it’s likely that this particular season will see a lot of blood spilt for every innovative step forward. Aggregator start-ups are ten a penny and internet-derived content is being made available faster than its owners can chomp their teeth down on the proverbial bit. When all comers think they can get in the game, the resulting confusion hurts everyone.

Hundred of ISPs and telcos are ready and willing to open up conversations with equally large numbers of rightsholders across the world. Even the aggregators are becoming so numerous that they themselves need to be aggregated. Gratuitous advertorial aside, my company, Digital TX, is aiming to solve that very problem with a globalised ‘marketplace’ platform where ISPs and content owners can meet to trade access rights in a relatively automated way. New dynamics require new thinking, and the winners in IPTV will be those who can leverage the widest breadth of resources in their armoury.

If ISPs benefit from a customer’s desire to download illegally, we are coming to an interesting junction in the road – if they want to offer premium content from the same rightsholders whose works are being distributed on P2P systems, will they then be liable for the illegal variety that flows so easily over their networks? Packet-sniffing is a basic network function, with identification and isolation of problem traffic relatively easy with the tools available on the market today. Indeed, a worrying development in the US is the plans of telcos to deploy heavier-duty traffic-shaping across their networks. They intend to charge content owners for prioritising the transport of their material, and build traffic quality ‘tiers’ that are priced according to the attention given to maintaining the integrity of transit.

IPTV allows us to use internet technologies to transmit multimedia using TCP/UDP over IP networks, meaning that an unprecedented level of inter-operation between different IP-based systems is possible (such as email, instant messaging, SMS, MMS etc). As with Sky’s WapTV and cable TV systems, IPTV set-top boxes are typically browser-based and menus, screens and interfaces on a TV are written in HTML. What that means in practice is that the content for IPTV is hosted in the same way as a website, and anyone with rudimentary skills in putting together web pages can produce their own content that can be displayed on theirs and others’ TV screens. What liberates and democratises the TV set may also just be our undoing.

The question for operators and regulators is how to manage the balance between opening an IPTV platform so anyone can generate their own content and innovate new TV-based interactive services, and needing to both actively control quality (read: filter crap), and provide safety from unsuitable, damaging or indecent material. The combination of age ratings, moderation/approval and an access control list (ACL), as used by the cable companies, is not enough as it is too restrictive and very difficult to maintain.

What is needed is the open structure of the internet and the relatively disciplined regulation policy advocated in television. Censorship may be a convenient in China, but it is not appropriate in the 21st century UK. Each service provider will have their own opinions and policies, but ultimately EU law will need to stipulate the obligations on third party application providers (who also use built-in micropayment systems in the same way BT offers premium rate telephony for) and IPTV operators to police content displayed by set-top boxes accessed through their networks.

Next page: Ingesting content

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