Sony’s is being heralded as first to market in the battle to bring the current generation of games consoles as IPTV set tops, with questions being asked about why Microsoft announced this back in January, but has yet to deliver product. The simple truth is that what the two devices are doing in vastly different.
This week’s announcement, was in fact pre-announced back in May, when Sony created an 80 GB hard drive PS3 purely for the Korea market, with the implication that it could be used as a DVR, saying that it was in talks with both Korea Telecom, which would launch its Mega TV in August, and with Hanaro Telecom’s existing Hana TV.
The console will now have a software upgrade to allow existing devices in the field to become a set top for these services, some time in November.
The only reason for calling these services IPTV is because the exceptionally high speed of the access lines in Korea means that no-one has to wait too long to begin watching a Video on Demand movie whether downloaded or streamed, when it travels across the public internet. There are no IP multicast channels within Korea, because the regulator has not clarified whether or not ISPs, especially those owned by existing telcos, are allowed to offer broadcast TV in competition with existing broadcasters, with the debate going back and forwards between the Ministry of Information and Communication and the Korean Broadcasting Commission, until it has had to call in the National Assembly to resolve the issue.
So Korea Telecom and Hanaro have been forced to innovate through web based VoD services instead, while waiting for approval for genuine IPTV which may never come, with MegaTV and HanaTV.
Hanaro TV has modest revenues of just $8.3 million for the past half year and a customer base of 540,000 subscribes for what is a $10 a month service. That’s a very large proportion of its 1.23 million broadband subscribers which take its 100 Mbps service.
In response Korea Telecom’s MegaTV was only launched in August, says that it has then already acquired 50,000 subscribers and will have 300,000 by the end of the year. Both systems offer High Definition content over the internet and LG and SK Telecom are both expected to launch similar services shortly.
There is a distinct possibility that Korea may not bother with broadcast IPTV once the National Assembly makes its mind up one way or the other, and instead will be happy to offer HD streaming and download services to devices like the Sony PS3. If they can operate with Sony, then there is a chance that the operators will never have to subsidize HD storage and viewing devices, and the whole thing can remain as a retail proposition.
The technology behind the KT Mega TV are encoders from French specialist Ateme, and conditional access and EPG software from NDS.
Ateme uses its own Kyrion highly parallel, Field Programmable Gate Arrays, to compress HD video to around 6Mbps in H.264. Ateme has always supplied technology to other encoder makers, and has only this year begun to offer full encoders of its own. But of course these don’t have to be real time encoders, encoding TV channels as they are delivered, but are compressing around 2,000 hours of video assets each month, to the best compression that can be achieved, even if it takes longer than real time and involves multiple passes.
So the PS3 console will have to decode H.264 compression, and have a simple EPG application ported. It may also have to decrypt the programs as they arrive, none of which is a stretch for the onboard PS3 Cell processor, which has been shown rendering 48 TV screens, and which may well end up as one of the key components in encoder devices.
What the PS3 doesn’t have to do is the more complex task of channel change in a multicast, although there is the distinct possibility that once Korea sorts out ifs regulatory stance, that may be added. This means it doesn’t have to issue unsubscribe messages to a multicast stream, and subscribe messages. It will still need some buffering to sort out network Jitter and the resend of any lost packets, but the system will be using full TCP/IP we imagine and won’t need a separate unicast packet resend utility written for it, so it uses a far more commonplace software stack inside the device than say a Microsoft Mediaroom IPTV set top.
All of this means that it is far simpler to put together and means the device can be standard, and needs no special variations from country to country. The PS3 can be adapted to run native Linux, which probably means that the NDS middleware can have been ported virtually unchanged.
All of which is good, because Sony is no IPTV specialist and wouldn’t have been able to help much creating a set top, and this has all contributed to how quickly the PS3 has been adapted as opposed to the time it has taken Microsoft with the Xbox 360.
It is true that the Microsoft IPTV middleware is being used in a similar way, in a hybrid set up, at places like British Telecom in the UK, but not many of Microsoft’s IPTV customers work in this way and the implementation will need to cope with full multicasting.
Microsoft already knows everything that it needs to about the software stack in multicast set tops, after all it invented its particular version of it, including the software which manages channel change in a weird way, taking the first I-Frames as a unicast and then merging the device subsequently into a standard multicast stream. But it is using a slightly different operating system and will have had to re-write some parts of the stack, and if our thought that AT&T is one of the companies that wants the service, it means that a lot of testing will be done before it is released to market.
The system for Mega is likely to be subsequently launched by Hanaro too, and possibly by other Korean networks, and become standardized with Korea acting as a test bed for other countries. The system is far more like the existing Xbox Live service and the PS3 network, which will deliver videos over the top of telco networks in other countries.
What is really happening here is an experiment by Sony to sell through the operator, rather than take on the burden of selling directly, something which is likely to result in some subsidy on the devices, lower pricing and an easier route to market where consumers won’t quite see the high cost of a PS3. That’s of no comfort to customers that have already bought their own PS3, but devices are certain to be sourced by operators eventually and as a result are sure to shift in higher numbers.
It’s possible for Sony to give the retail margin to these operators, and perhaps to sell at a slightly lower cost than to the retail chains, but there is so little margin on these devices at retail, thought to be in the order of 5%, that it’s not much relief for the local operator.
But if Sony finds that it is a model that works, then expect a repeat in Japan, where there are networks fast enough to operate in this way, and in perhaps another handful of countries where High Definition has high penetration and access networks operate above that 6 Mbps level. That will certainly help the PS3 rise closer to its prior generation dominance, but is not enough to do it on its own.
But we have always said that the PS3 strategy is like an onion, with layer upon layer rolled out, with the next step expected to be an upgrade on the PS3 to its Blu-ray so that interactivity can be retrospectively added, and pull down content from the internet, something that some HD DVD players can already do.