Beyond IPTV: The Next Generation TV (NGTV)

IPTV, though already in its second generation, is still in adolescence mode, and

like a lot of adolescents, the IPTV market is full of anxieties and questions. When will it be mass-market? When are we going to see hot new applications? When is it going to be mobile?

writes Carol Wilson, Editor of Telephony Online. Like many other things, all above mentioned network and distribution technologies, content paradigms, usage paradigms are somewhat converging. The traditional user experience of Television is changing rapidly. NGTV will definitely expand to encompass a form of Web TV and it will also be mobile. While we can come up with a plethora of predictions for the future how TV might or might not look like, the near term meta-topics beyond mobility and hot applications are middleware, security, web2.0, and advertisement.

This post was written November 2007.

Hot Topic: IPTV Middleware

12 vendors were claiming to supply IPTV middleware in 2006, now there are more than 20 fighting for space. The trend has shifted to third-party vendors that are interoperable and focus on user experience and usability. Because of this market shift, many vendors that previously were marketing themselves as set-top box or user interface providers are now shifting their marketing efforts towards the middleware label to better align themselves with this key item in the IPTV market.

Many carriers worldwide were more or less struggling with Microsoft’s middleware solution. While the delay for their IPTV rollout might have many other reasons, Microsoft’s message of simple telecom integration seemed to be misleading. AT&T U-verse reached only 51,000 TV subscribers in June 2007.

Many vendors discovered the growth in IPTV demand at Tier 2/3 carriers, such as Nokia Siemens Networks, that acquired Myrio in 2005. Ron Freeman, head of IPTV and emerging markets for Nokia Siemens Networks, said that with the Tier 1 market locked up by AT&T, Qwest and Verizon, Nokia is uniquely positioned to help keep the lower-tier markets competitive. While Nokia showed with the deployment at BelgaCom of Belgium that its solution can very quickly scale to over 150,000 users, rural players most often don’t need more than 10,000 subscribers.

Hot Topic: The Impact of Web2.0

Because IPTV will collide or converge to some extend with Internet TV, the Web2.0 paradigm will influence how IPTV and NGTV will have to address business models, content, technologies, and demographics. In order to stay competitive and capitalize on content, IPTV service providers will have to provide solutions within the next two years for the main characterizations of Web2.0:

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Participation: social networks, recommendations, blogging, user generated content, collaborative filtering, profile correlation, ranking, folksonomies, tag clouds

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Standards: standards for application and service interaction similar to web services, XML, or common AJAX principles

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Decentralization: power and flexibility from distribution, computing, and support of assets and applications over many computers and systems rather than centralized maintenance

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Openness: creating critical mass and shortening innovation cycles through open and transparent access to assets and applications

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Modularity: flexible combination of modules creates value that is greater than the sum of its parts

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Reusability: recycling, deconstruction, and reconstruction of assets and applications for new services, functions, and assets

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User Control: give users control to participate, but also control about their the assets and applications they create, their activities, and their identities

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Identity: allow control and application of different identities for different purposes

The user participation, openness, and decentralization should not be mistaken for loss of control over access or usage of assets and applications. IPTV and NGTV are enablers of digital entertainment. As such, they have to support the control of a strategic business alignment of technologies, markets, and content. Among the new features in the next release of Microsoft’s IPTV Platform Microsoft Mediaroom will be a new XML-based application markup language, dubbed Mediaroom Markup Language (MML). Ultimately, MML will be integrated into Microsoft’s ASP.NET tools, including the popular Visual Studio development environment. That will enable developers to create standard XML applications using Microsoft tools and have them transcode to work in the IPTV Mediaroom environment as needed.

Hot Topic: Advertisement

Advertisers, agencies and programmers have been exploring new solutions for a post-DVR world. New approaches and initiatives include

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new formats or approaches, such as

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show sponsorship,

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product placement,

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or transactional & subscription-based TV, as well as

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technology-based solutions, such as

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interactive advertising and enhanced advertising,

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VOD, DVR downloads, and ad telescoping, or

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targeted, customized, & addressable advertising.

“Ad Telescoping” describes the user option to view a longer version of a short commercial with more information. In response to an onscreen prompt, the viewer presses a button on the remote that sets off an ETV trigger inserted in the broadcast stream. The current program could automatically recorded on a DVR in order to pickup the show where the user left off, the user could use a picture-in-picture feature to follow the running show while watching the longer commercial, or the user could simply leave the current show. “Targeted Advertising” is also known as “zoning”, as the ad is delivered to a group or zone on the network based on neighborhood, income level, or other group information. “Customized Advertising” allows advertisers to change certain components of a commercial based on the audience they are trying to reach. “Addressable Advertising” allows addressing of specific ads to specific set-top boxes on the network.

According to recent report from Heavy Reading about Monetizing IPTV: The Next-Gen Video Advertisement Opportunity by Senior Analyst Aditya Kishore on-demand and targeted advertising will be led by the U.S. market, while Western Europe will continue to lead with interactive advertising within Interactive TV. On-demand will be the primary channel for addressable ads, as linear addressable advertising creates significant bandwidth challenges. Aditya suggests that telecoms could earn in the range of $65 per subscriber per year from TV advertising, anticipating that almost half of this revenue will need to come from next-generation TV advertising approaches, such as addressable and interactive ads. I asked him about the timeframe for such an ARPU – 2008 or 2012, stable or increasing – but he pointed me back to the report that says that

This figure will increase with the number of IPTV subscribers, when IPTV becomes a reasonable force within the market.

While advertising formats, pricing, and other valuation metrics for targeted advertising are still unclear, and the advertising technology ecosystem is fairly complex, with different technologies performing varying functions, the traditional categories are:

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Ad Campaign Management Vendors manage and coordinate the buying and selling of advertising. They track available advertising inventory and help optimize advertising transactions. Some of them are service oriented, other provide software and tools for self-management. The main players for telecoms are Atlas on Demand, BlackArrow, Doubleclick, and Tandberg TV.

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Traffic & Billing Systems Vendors manage the entire sales and inventory for companies selling and delivering advertising, such as broadcasters, cable networks and pay TV operators. The main players for telecoms are Harris and OpenTV – Eclipse.

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Targeted & Customized Advertising Application Vendors develop the applications and systems that deliver next generation TV formats. The main players for telecoms are Invidi, OpenTV – Spot On, Packet Vision, and Visible World.

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Enhanced & Interactive Advertising Application Vendors enable any kind of interaction on the TV with an advertising or branding objective. The main players for telecoms are Emuse, Navic Networks, OpenTV – Interactive Suite, and Tandberg TV.

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Ad Insertion Server Vendors must be integrated with splicing equipment. The main players for telecoms are C-Cor and SeaChange.

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Ad Splicer Vendors respond to standards-based cue tones in the programming and insert the right commercial into the right programming stream. They also manipulate the bit rate of the commercial to match the programming stream it is being inserted into. The main players for telecoms are BigBand, RGB, and Terayon.

Aditya will disagree with me on the next point (in fact he wrote to me that my statement “is simply not correct”), but in my opinion there is more behind the move of many players than just incremental revenue, or value added services. In my informal discussions with traditional telecom network providers, IPTV integrators, and Internet TV providers, they see their chances to either lock in telecoms to their existing vendor platform, to reduce churn by offering bundles and “integrated” solutions, or to leverage their existing experience with different advertisement formats. The major players that are currently developing solutions for IPTV advertisement are Alcatel-Lucent, Cisco under their Scientific Atlanta brand, Juniper Networks, Microsoft, Google, Yahoo, and Donovan Data Systems.

Hot Topic: IPTV Security

The currently prevalent first generation IPTV deployments are pretty closed and do not offer many entry points for malicious attackers or spam. IPTV is also not yet on the radar of most hackers, as subscriber numbers are still considerably lower than email addresses, always-on broadband connected computers, or industry targets. With growing subscriber numbers, opening platforms, standard software based set-top boxes, browser-based content, interactive content, advertisement overlays, targeted advertisement, and valuable content, IPTV security will become an important topic. The risks are not limited to Denial-of-Service (DoS) attacks or viruses on set-top, but also extend to unauthorized on-screen spam, hijacking of content, and storage of illegal content for future distribution.

Generally second generation IPTV and NGTV have to implement three main layers of security:

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Transport Security

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Authenticate network entities.

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Protect data integrity.

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Control physical facility access.

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Encrypt signals.

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Service Security

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Conditional Access: Ensure that only subscribers to a service see the service.

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Parental Control: Ensure that only age-appropriate content is consumed.

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Spoof Protection: Detect improperly used customer premise equipment.

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Content Security

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Digital Rights Management: Treat DRM as enabler to apply policies how assets can be used and accessed.

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Digital Watermarking: Mark assets to identify sources of theft after a breach.

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Deep Packet Inspection: examine individual packets to detect theft or improper usage.

In so called tree-and-branch type deployments of IPTV the lines, wires, and ports the flow of packets use is well known, preventing most basic forms of theft of spoof. In peer-supported distribution models this might become problematic. To enable legal interception and prevent theft and spoof, the peer-to-peer distribution platform either needs to be secured on a transport layer so that it becomes hard enough for attackers to inject malicious packets, or a deep packet inspection needs to be done as far into the network branches as possible to leverage the advantage of peer-to-peer transport and prevent humongous peer-to-peer network load on core and core edges.

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