One of the constant themes of the IBC show last week was that the Adaptive streaming technologies which would win in OTT services were those from the big three ‘ Apple, Microsoft and Adobe. Almost on cue one of the market innovators, Move Networks, which is being looked at for a trade sale, has confirmed that it now has a US patent for the technology.
The company described it as ‘a fundamental patent on adaptive streaming’ saying that it has now been approved by the United States Patent and Trademark Office(USPTO). The likely outcome is that Move will enter negotiations with all three of the major streaming businesses and will try to pick up the kind of royalty fees that it needs to stay alive and healthy in this sector.
If history is any indicator no-one will play ball, as they never played ball on the invention of the DVR, on software based DRM or on things like Electronic Program Guides ‘ until there was a first successful legal action.
‘Move’s adaptive streaming was the breakthrough invention which proved that primetime television programming and professional long form video can be reliably delivered over the Internet at the high resolution quality that is intended ‘ despite the unreliable network conditions typically present on the Internet,’ said Drew Major, the inventor of adaptive streaming and founder of Move Networks.
‘Following our market introduction in 2006, practically every major online video provider – including Akamai, Apple, Adobe, Limelight, Microsoft, Netflix, Widevine and several others – have deployed an adaptive bit rate architecture inspired by our invention. We are pleased to see that the USPTO has recognized our technical achievements that make quality IP video delivery a reality. We look forward to continuing our efforts to further the boundaries with similar ongoing technology innovation.’
Given that the average time to strong arm such a technology through the courts is about four years, Move will still have to be in business, or will have to find a wealthy successor, who can afford the legal bills. Of course one of these companies could buy Move outright and use the intellectual property to bully the others.
The patent covers the encoding and use of multiple bit rate “streamlets” with the same time index; such that the aggregate set of streamlets, stored on standard web servers, independently yield playback of the original full length video. This is accomplished through intelligent requests of successive unique optimal streamlets sent by a client device.
But is it too obvious that you have to break a video stream up into different resolutions streams and then break it further down into tiny video blocks? Is the fact that P2P systems did something analogous going to be considered a prior use? If the invention is deemed to be obvious, something that only a full Markman patent hearing could ascertain, then the patent could be deemed invalid, even though it has just been issued. Also how much relevant prior uses is there for similar systems?
Move managed to get some pretty impressive leading names in adaptive streaming including ABC, Fox, ESPN, Oprah Book Club, Televisa, CW, Comcast, ProSieben and BYU TV. It has also integrated it into MoveTV, a white labeled end-to-end video services platform offering VoD, live events, network DVR and has been trying to push it for 3 screen services and systems such as ‘TV Everywhere’ being deployed by pay TV operators in the US.
On the back of that, Move raised a substantial amount of funding from Steamboat Ventures, Hummer Winblad Venture Partners, Benchmark Capital, Microsoft, Cisco, Comcast and Televisa.
We spoke to one of the new players in the market at IBC, Widevine, which has made no secret that it is going after the US TV Everywhere business with its DRM encryption and its own brand of Adaptive Streaming.
The IPTV DRM specialist has clearly been less focused on new IPTV deployments and more focused on Over The Top business models of late and has been for some time. It is clearly in talks with all the major TV Everywhere operators, but no-one has yet landed the critical services from the leading Pay TV vendors in the US, in particular Comcast and Time Warner Cable.
Amanda Burrows, a spokesman for Widevine told us at the show that no-one can make money purely out of adaptive streaming, and that throwing it in a bundle with DRM made the most sense. DRM has long been thought of as a grudge purchase, that no-one wants to pay for (though Widevine would never say that) so putting it in with something which enabled a completely new business model is perhaps a good way to shift it. A software based DRM is required because traditional card based conditional access is too expensive for multiple clients in a home ‘ the PC, the TV itself and all the phones and Blu-ray players.
Burrows added, ‘Our business model for streaming has been to embed it in a number of devices and charge only for each device when it is first used.’
Though she would not confirm that these are lower fees than traditional IPTV deployments, she did not argue with the idea that if Comcast and Time Warner and other major Pay TV customers like DirecTV go ahead with such services, the attached number of devices, which might include PCs, is expected to be far higher. Word on the street is that a DRM client and adaptive streaming solution together are coming out at around 25% to 35% of what an IPTV DRM client goes for.
Widevine itself has just issued a statement about winning some of its own intellectual property, relating to transcoding from traditional video formats to Over The Top IP formats, as part of its business model in bringing TV Everywhere models to market.
It shows that Widevine is serious about making this a strong revenue leg to go alongside IPTV DRM and Burrows said that the company was currently using a single US based key server farm for these deployments but with 2 major European deals due shortly for announcement and one or two prospects in Asia, Widevine was looking to build at least two more key servers, one in New York and another in Europe.
‘We are also talking directly to Hollywood studios on TV Everywhere,’ she said. Dish Network has already agreed to use Widevine for its TV Everywhere service, although this is slightly different from the other US cable and DTH suppliers, as it also involves copying content to your home and then placeshifting it to wherever you are viewing it.
Recently Widevine sight up RoxioNow and Blockbuster for its DRM and streaming and has provided Netflix with protection of content going to a Nintendo Wii and has been chosen to protect the streaming service for the UK’s LoveFilm, a Netflix like service. It has also cut deals with IPTV software supplier Oregan Networks and Accedo Broadband for OTT delivery, claims it is the preferred supplier for Best Buy on Adaptive Streaming and DRM and will now protect the new Boxee online video service.
If Move wanted to target a smaller VC funded business with a patent infringement suit, before taking on the bigger adaptive streaming players, Widevine is probably prominent as a candidate.