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6 May 2010

Dish mistakes TV Everywhere economics for DVRs everywhere

We commented on the confusion which would be caused when the US satellite TV company Dish Networks called its placeshifting DVR, TV Everywhere, and already it is sowing its confusion, as almost every commentator who covered this week’s announcement of Widevine being used on the Dish TV Everywhere service, simply assumed that this was server delivered programming over the internet.

They have our sympathies because it is quite difficult to work out exactly what is going on with the ViP922 DVR and the Dish placeshifting service, and there seem to be three forms of content protection in play.

Conditional access from the satellite to the home is provided, as it always has been for Dish, by its Nagravision US joint venture, then Widevine is used to protect content being distributed around the home to anything on the wi-fi or powerline network, while it appears that the original, far simpler encryption, which was used by the Slingbox, remains for placeshifting content long distances across the internet to remote devices such as the iPhone or any PC. This might be on its way to Widevine as well, but existing installed software players out there wouldn’t support Widevine without an upgrade, so it was specifically avoided in discussion in this announcement. Hopefully Dish or Widevine will clarify this at some point.

The Widevine deal must have been in place for some time ago, but like so many of these deals, it didn’t get permission to reveal that fact until a month after the product has been in the field. The placeshifting DVR, has taken Dish some 2.5 years to get together since it bought the company for $380 million in September 2007, and it was finally delivered in the US at the beginning of April.

Reading online product forums, it’s easy to see why it has taken so long, and the installation appears to be complex and unsatisfactory for many, especially when they try to activate the shifting of Dish programming to remote devices which are not in the home.

It was back in January at CES that Dish introduced what it called simply TV Everywhere, relying on a special TV Everywhere Adapter, the Sling Media placeshifting ViP 922 set top, the new Dish Network wi-fi HD Monitor and the new Dish Remote Access App. Not only is the service nothing like the TV Everywhere concept that US Cable operators offer ‘ they send the same programming from an online portal and use a customer number related password to allow consumers access ‘ but Dish is also trying to claim the term as a Trademark.

The curious thing about this is that it is really an Over The Top service ‘ one that could potentially be identified and blocked by broadband network owners if net neutrality is not firmly protected.

It also poses a slightly different security problem. So Widevine, which is known to have worked on TV Everywhere, has effectively built something different for Dish. One system is protecting an online portal stream as well as establishing adaptive streaming from a server, while the other is protecting video sent around a home, and possible over the internet, but from an adaptive streaming CE device ‘ naturally that means that unlike a server, which serves the same programming to everyone, it cannot pre-generate multiple image resolutions and then shift between them, it has to do something dynamically, changing the parameters around way the device encodes video, not switching between existing streams. It would also then have to encrypt on the fly as well, in real time.

All of this needs quite a chunky amount of processing, and it is all coming from the same (we assume) Broadcom chip which is driving your TV set. It’s likely that server side versions of the same technologies will do a better job of sensing your existing broadband line and delivering the best video possible for that line.

Which is perhaps why the ViP922 slingloaded DVR is such a monster device and has a price of $649 when bought outright, unlike the $250 that Sling Media charged for its original Sling Player device. The device is charged out at a $200 premium, plus a rise in monthly payments for existing Dish customers of between $10 and $17 a month.

That chip has a lot of work to do. The device has a 1TB disk drive to write to and from, it supports every video resolution up to full HD, drives EPG search and even offers viewing suggestions, supports picture in picture viewing, and VoD services.

Once OTT services take off widely in the US, and particularly those TV Everywhere services (which the FCC still might ban) begin to shift in quantity, we can no longer see the unique lead that Placeshifting appeared to give to Dish. When there was almost no premium content on the internet and what existed was either pirated or covered in pre-roll advertising, then placeshifting seemed so much better than any other services out there. Now that major TV Everywhere portals are coming into play from multiple operators, then suddenly all premium content is likely to be internet enabled.

We do like the idea that you can simply ‘continue’ the viewing of favorites TV series you were following using Placeshifting, while on the move or away from home or while someone else hogs your main TV, and that you can view DVD material in the same way, but the gap is closing and if we are right that quality of server delivered online video is more predictable over remote broadband access than placeshifted material, then there will never been a swing to placeshifting by all the other TV operators out there.

We have already seen in the TiVo triggered DVR revolution, the fact that DVRs generally were seen as way more expensive than networked DVRs, so much so that Cablevision thought it was worth getting a Supreme Court Decision over their use. And so it will be with Placeshifting which is quite wasteful of processing power, given that each customer used to have to decode then re-encode pay TV viewing with the original Sling Media devices. Perhaps those steps have been done away with and internally the ViP 922 from Dish decodes the encryption of the digital stream from Nagravision and immediately re-encrypts it using Widevine, without every having to run it once again through a recode. Doing all this in the safety of a remote server is far more secure and once a stream is prepared for online it can be stored and simply delivered to the next viewer.

But there is another reason that it will now not take off so fast. Without Pay TV operator’s TV Everywhere strategies, placeshifting was a clever way of bypassing the control that TV operators had over content and also shortcutting its availability on the internet. Hollywood Studios would have been aware that they did not control the remote devices that things were streamed on and that a re-encoding of their works would have rendered them, apart from the potential addition of watermarking, impossible to detect in the wild, if pirated.

TV Everywhere may irritate the FCC or the Justice Department to the extent where one of them has to step in and declare it illegal, as it subsidizes internet content with existing pay TV structures, but it is so convenient for pay TV operators, that they will never feel compelled to experiment with Placeshifting, with the exception of Dish, unless TV Everywhere is outlawed.

And if that remains the case, it may well become impossible for Dish to ever recoup the money it paid out for Sling Media, with continuing business.