The home networking debate has existed for quite sometime. However, as new technologies emerge, such as adaptive rate streaming, standards become mainstream and broadband penetration reaches new heights, this topic is relevant now more than ever. This report illustrates the available choices and implications of alternate multi-screen video architectures.

We sat down with Editor John Moulding for his perspective on why this report breaks new ground on the topic of whole home video.

Tell us why this report, Supporting the ‘any screen, anywhere’ video consumer, was so ambitious on the topic of whole home video?

JM: This is a huge topic that encompasses the future of the home video network, the evolution of multi-platform TV strategies and the long-term evolution of TV delivery itself – looking at whether service providers are going to move from a position where they are married to a physical network to one when they could operate in the ‘cloud’ and deliver services to any home by becoming over-the-top broadband providers.

We wanted to get some informed opinion that reflected the support there is for home network centric and cloud centric approaches to multi-screen delivery. That meant we had to talk to a lot of people – over 20 interviews plus other primary input. We felt it was worth it for Videonet because our editorial focus is on the post-convergence TV experience, and a lot of this is definitely being shaped by the convergence of television, IP and the Internet.

After researching the topic in-depth, do you believe that offering whole home video is one of the key competitive challenges facing operators today?

JM: There is no question that making content available on all important television display screens, including those that are out of the direct control of Pay TV operators (like CE screens bought in retail) is a key competitive challenge. If platform operators do not meet consumer demand for multi-screen viewing around the home they could easily find themselves in the same place as channel owners who were too slow to respond to digital TV and have since struggled to cope with audience fragmentation. They could end up exposed and vulnerable to new competition.

Platform operators have had a great couple of decades and not surprisingly, there are a lot of people who want to eat their lunch. There is a whole ecosystem of online content providers and aggregators who want to gain the attention of consumers on CE screens using broadband and over-the-top delivery. The arrival of connected TV devices like connected televisions, set-top boxes and Blu-ray players makes it so much easier for them to target Pay TV subscribers with alternative content on the television itself – on the main living room TV and in second and third rooms.

Not many Pay TV operators are established as service providers on the PC and mobile and they need to make sure they are not left behind in the race for consumer attention there. I think it’s fair to assume that any successful over-the-top (OTT) service provider who builds an audience online, mainly via the PC/laptop, is going to try to leverage any brand loyalty they have on the TV as soon as they can (as soon as TVs are connected).

If consumers are being offered compelling media experiences, including the all-important catch-up content, on multiple screens in the home, and that is not coming from the Pay TV operator, then the operator is losing time with its customer and potentially revenues. It is handing business straight to alternative providers, the best of whom could grow into strong and permanent competitors. So this is really about holding on to existing customers, making sure they are watching Pay TV services as much as possible, and maintaining revenues as well as looking for new distribution and revenue opportunities.

Why is content security such an important factor when developing a whole home video strategy?

JM: When we talk about whole home video there is an assumption that it is a Pay TV operator who is taking responsibility for creating this kind of multi-room viewing environment. So that means the content includes subscription channels and very possibly exclusive sports and other premium and pay per view programming.

If it’s worth paying for it’s worth stealing and whole-home will just create a nightmare for operators if it exposes them to unauthorized copying and redistribution. Operators will have to invest in these capabilities through media servers (like a DVR) and probably by taking responsibility for home networking issues, with the call centre requirements that suggests. So the last thing they want to do is buy a shiny new bucket with a hole in the bottom.

The big challenge for content security is that Pay TV operators can no longer guarantee they have end-to-end control of the video delivery. If they are handing content into a DLNA-based home network the conditional access (CA) could give way to DTCP-IP link protection. The original CA used by the Pay TV operator may have to hand over to a DRM system to reach target CE devices like PCs or smart phones in the home. So they need security solutions that are very flexible (and where the handover can be achieved securely inside a customer premise device – like the media gateway server).

If operators are delivering content from the ‘cloud’ instead, and using OTT infrastructure to reach multiple screens in the home, they still need to prepare content for different screens with different DRM requirements. In this case, the right DRM for the end target device can be applied from the outset. So the emphasis in the content protection world seems to be shifting from protecting content end-to-end with a single CA/DRM to managing the wider range of security requirements platform operators are going to face. To an extent, the security vendors are starting to act like an interface, managing the subscriber and device views and entitlements but working with any content protection system needed to get content where it needs to go.

What was the most unexpected thing you learned about whole home video while writing the report?

JM: The extent to which the OTT, cloud-based approach is already being seriously considered by operators as an alternative approach to the server/ client whole home video architecture. There is clearly strong support for both approaches. As Tom Lookabaugh, CTO at Entropic Communications says in the report, both models have their champions and even their champions are keeping an eye on the evolution of the other model.

I suppose the surprise is that, given how few platform operators have well established multi-platform services that exploit online distribution, online video technology is being considered not only to reach consumers outside the home but for in-home multi-screen distribution as well.

We continue our conversation with John in Part 2 of this interview where we talk about revenue streams from whole home video, definition of cloud-based TV and both technology advancements and challenges. Stay tuned.

But in reality, these two worlds are really not exclusive as they might seem.

Some content may start as paid content, and later on may be distributed in the clear with commercials and eventually distributed freely. Other business models allow users to chose between paid but ad-free version or ad-supported version of the same content. Content providers or service operators are not likely to transcode each content for different distribution models if they can avoid it.

As a comment on Google’s apparent position here, I don’t see why an open source codec or open standard should be fundamentally incompatible with revenue generating services. This has been disproved by several standards organizations including MPEG, DVB or OMA, but that is a discussion for another day. The bottom line is that if valuable content will eventually be encoded and distributed using VP8, we’ll be able to protect it if the business model requires it (it is open source after all, isn’t it?) Read on NewTeeVee why open sourcing VP8 matters.

The other issue in debate is whether open source VP8 will stay free. It is unlikely that after a quarter of a century of digital video compression research, Google (or On2) would be able to come up with a codec that is of comparable quality as those developed by MPEG/ITU without infringing on anybody’s patents. If I remember correctly, Microsoft tried something similar with VC-1 and it did not work according to the original plan.

I don’t believe that any serious service provider will jump on the VP8 bandwagon without being able to accommodate all licensing fees into their business model upfront.  Maybe this will speed up MPEG’s effort to create a royalty-free version of MPEG codec, which will avoid splitting the pay-TV and free-TV worlds.

I guess we will wait and see . . .

We are very proud of our continued growth in IPTV. We feel we have been able to keep this top spot for several reasons. 1) We have built a very strong partner ecosystem that includes global and regional system integrators, which allows each vendor to focus on what they do best 2) We offer effective security solutions that address changing business needs and gives operators the freedom and flexibility to growth their businesses.

Since launching VCAS 3, what we’re calling the next generation of digital TV security solutions, we have received tremendous response on how we support operators’ “cash registers” that enable them to grow their subscriber base and add revenue streams. We are able to create value for our customers by understanding the complex business issues for multi-screen video delivery and delivering solutions way beyond content protection. 

You can see some examples of this from our library of white papers and other resources.

This recognition also reflects the dedication of our customer care team to respond to the unique needs of our customers. 

Thanks to everyone that has contributed to this noteworthy feat!

What struck me, though, was a feeling that this characteristic phenomenon of a capitalist economy, which is usually associated with innovation, may actually stifle innovation to some extent. What I mean is that if one company has a good idea and tries to add a new feature, new service or a new business model to its system, it is very likely that they need to line up too many of the proverbial ducks in a row. A service provider ordering the end-to-end system may have enough power (or money) to make this happen. Most of the individual players may not have the time and resources to incorporate a speculative feature. 

Case in point, a service provider wants to repackage a set of episodes on a network DVR to a season and offer it again for purchase or rent; it may require cooperation of the storefront vendor, middleware, CA/DRM to re-encrypt the content, content management to keep track of a new asset, user interface, billing system, etc. Not to mention extending the distribution rights obtained from the studio. How can we optimize this process, make it more agile and responsive? 

The Paths to OTT

Another aspect of the conference that perked up my mind was the concept of over-the-top or OTT. What is it, really? When you ask the consumer, it may mean getting content from any source rather than a single TV service provider. It may also mean watching the content on a PC or even more importantly, getting it for free.

 A service provider may be thinking about reaching its subscribers on any device whether the user may be at home, traveling or even outside the provider’s managed network. Or even about reaching a new customer beyond the reach of his fixed network. And the studio may even be thinking about bypassing the service or network operator altogether. A very interesting and intellectually stimulating puzzle, indeed. 

But the bottom line is how is anybody going to make any money and who is going to benefit at the end. Is it like the buzz of the “long tail” content from several years ago? I did not hear it mentioned a single time at the conference. So what are the enablers of a successful OTT strategy? How does one monetize this new opportunity? I personally don’t want to go to too many web sites to get my content, set up numerous accounts, receive multiple bills, learn different user interfaces, set up my preference over and over … you get my point. 

Seems to me that a relatively easy way to deliver OTT is to extend an existing service to new devices and reach existing subscribers wherever they happen to be. This approach represents only incremental cost, reuse of existing content, adding value to the existing brand, extending the current relationship with the subscriber and ultimately increasing or at least maintaining revenue. 

Don’t take me wrong; there will be successful OTT services outside of the traditional service providers. As an example, my family enjoys the Netflix on-line service. But even this one started as an extension of another business strategy rather than a pure OTT, even though it may end up eliminating the mailing of physical DVDs altogether. (By the way, I did end up signing up for a higher tier broadband service indirectly paying for the Netflix service to my DSL provider.) 

This is why Verimatrix has extended content protection services to PCs and smart phones, added support for adaptive rate streaming and provides a multi-rights head-end, shielding the service operator from the complexity of multiple device types, each possibly requiring a different CA or DRM system. These are all necessary enablers of a successful OTT strategy. 

Home Networking Standards and Psychology

Home networking and sharing content among devices in the home in particular is another topic that excites me. It started as sharing content between a DVR and one or more set-top boxes or PCs, sometimes called whole-home DVR or multi-room DVR. This scenario was partially driven by the fact that content is already present in the home on the DVR and the destination devices are compatible as far content format and resolution are concerned. 

Such architecture has been standardized to some extent by UPnP and DLNA and even OCAP-HN. But as one starts adding devices requiring different file formats, video codecs and resolutions, this architecture may no longer be sufficient. The lack of remote access to home content is another serious limitation. As bandwidth is becoming ubiquitous, it will become easier to stream transcoded content in the appropriate format, optimized for the destination device directly from the head-end. 

DLNA may still be used to discover the content in the home but the rights and the device-optimized content may be reacquired for the best user experience. Thus DTCP-IP may not be the only way to protect content in the home. By taking advantage of the more flexible way of signaling content protection and other content attributes using UPnP content discovery services, allows the destination device to copy the content locally, request its own rights and access keys or request a more suitable instance of the content altogether from the service provider. 

Psychology of ownership plays a role here as well, but I believe that over time consumers will become comfortable with the idea of owning rights to content rather than owning the content itself in the DVD form or the digital form. The ultimate challenge is to make this complexity completely transparent to the end user – “search, select and play” nothing more.   

I look forward to continuing these conversations at NAB. See you in Vegas.

Gotta go – last call for boarding!

Compare that with IPTV operators. In the early days, theft of service was never a forefront requirement when building their networks – for two main reasons. They felt they had more control with fixed networks where the end device was a set-top box, so the threat of theft of service was potentially lower. In addition, content owners saw the emerging Internet Protocol Television (IPTV) as a potential threat and imposed much higher security requirements in order to gain rights to premium programming. Despite claims to the contrary from smart card vendors, software-based security was deemed acceptable in a two-way network and content protection was key to a full channel lineup to attract subscribers.

With the appeal of hybrid networks and novel OTT (over-the-top) services, all types of pay-TV operators find themselves in new revenue security territory. Cable and satellite providers are making strategic decisions to add more interactive services, many of which are delivered over IP-based networks. They are finding that software-only security solutions offer a more economical alternative, which are far easier to deploy, compared with smart cards that simply do not translate in the two-way environment, in particular in the case of mobile devices. 

IPTV providers are now looking into OTT services that deliver content outside their controlled, managed network. They need layered security solutions to take advantage of different delivery mechanisms outside of the living room. Plus IPTV operators with rights to exclusive content have become an attractive target for hackers, so theft of service prevention is a higher priority.

You can now put revenue security on the list of how these pay-TV services are converging. Operators require a flexible protection solution that can handle different networks, delivery formats, multiple end devices and the addition of new services – the ultimate goal is help monetize content, increase ARPU and reduce churn.

Come see me at Digital Hollywood Fall where we will tackle the latest DRM standards and actual technology implementations – today at 12:30!

They set out to dispel some commonly held “truths” regarding behavior on consuming mobile TV based on current research.  For me, it added up to the fact that people are using mobile devices to extend their normal viewing habits, around and outside the home.

With the advanced user interface and intelligence of latest generation smart phones, consumers are quite happy to watch full length sitcoms and even movies. Low-quality YouTube clips and mobisodes are not the killer apps that were previously envisioned for mobile TV.

As mobile TV becomes more mainstream, it is important for the content owners and services providers to create the right mix of usage rights and protection on higher value content. As we all know, getting the right balance of protecting assets and meeting customer expectations can be precarious.

I was happy there was at least one bright spot in a rather underwhelming conference . . .

It can be argued that the business challenge is even greater than the technical one. Even if the same file format is offered, the synchronization of rights from one silo to another simply does not exist. Verimatrix is offering an approach (MultiRights) that can help harmonize rights between DRM systems operating under a single operator umbrella, but its going to take broader cooperation to solve the silo to silo communication issues.

We continue to work this axis, believing that the health of the overall industry – and an effective defense against illegitimate distribution channels – is to be found in a simplified and effective legal sales environment.

But in at least one respect, the technical advances being made in Internet video delivery seem likely to strongly influence the standards used for offering service over managed networks. We are closely watching the current developments in adaptive rate streaming, which seem to make Internet video much more digestible, while at the same time addressing some of the problematic areas for extending the reach of video material from today’s pay-TV systems.

From a technical sense, can streamed video over the Internet ever trump the much-hyped trend towards higher quality HD delivery systems? Will those folks who have invested in home theater systems with big screens and multi-channel sound systems be content to settle down and watch pixelated video with simple stereo sound?

I personally wouldn’t have thought so, but it seems that if you can move beyond video stuttering, rebuffering and audio squawks in service delivery, many of us can overlook reduced resolution, washed out colors and lack of dynamic range.

But even videophiles would have to admit that this stuff looks and sounds good on an iPhone, so let’s hope that the current trends just help us with offering greater choice of experience in our future pay-TV services.

A longer discussion of these issues can be found in our most recent white paper - please feel free to download and offer your comments!