Trying to sum up the Amsterdam International Broadcasting Conference (IBC) is a chore we at Faultline enjoy (hate) every year. To the people in hall 9,10 and 11, it’s like another event entirely, one where making TV and films is paramount, to people in halls 6,7 and 13 it’s all about pre-production, but in the main cluster of halls 1 to 5 there is only one topic ‘ how to get video content to homes over the internet.
But even this breaks down into multiple problems, technologies and business models, and it was the complete lack of the last item, business models, that is most worrying.
‘There are less RFPs which are really RFI’s,’ says one company chasing Over The Top services, ‘and more real RFPs which have been thought through, where the customer actually plans to do something.’
It’s been a long learning curve. Our first discussion of ‘three screens’ technology happened at IBC in 2007, and the first products that claimed to offer it came out the following year ‘ virtually none of these were ever installed and the optimistic boasts of those early years were only kept alive by the ‘day job’ of the suppliers who were chasing three screens. Usually they came out of the IPTV market, where luckily their early wins were still scaling their own customers, so revenues were usually continuous.
So IPTV middleware, set tops, adaptive streaming schemes, conditional access, interactive TV software suites, VoD servers and system integrators have all had to make their living elsewhere, while still talking about three screens, or possibly four ‘ one where is the TV screen reached through a broadcast technology, two is the PC, three is the mobile phone, while four is back to the TV screen, this time reached directly through the public internet, in a hybrid relationship with its other inputs.
One of the most intriguing questions is just who are these people putting out RFPs and planning new OTT services? For the most part we have known about the OTT plans of broadcast free to air operators for some time, and this is about the backlash from the pay TV operators, and it falls into two camps ‘ services that will go to new customers and be charged for and TV Everywhere services which will cement people to their existing supplier by allowing them to watch the same old pay TV from just about anywhere on any device across the internet.
We will still, in each case, have to answer the same questions about business models, and since IBC is really a show where the devices and software shown are from suppliers, and the walking traffic are the operators, we were only getting the supply half of the equation ‘ what’s on offer. And most suppliers talk about supporting virtually any business model ‘ whether they do or not is likely to be answered over the next 6 to 9 months, and it will certainly be a clearer debate come next year’s premium European broadcaster event.
In all we met with about 20 companies and browsed the stands of many others, so we can’t tell you we saw every OTT service, or that this was ALL that everyone wanted to talk about.
Over the coming week, as we shuffle through our notes, we will bring you more items from IBC, but in summary we had that OTT discussion on almost every stand.
VoD players like Edgeware which offers Flash based VoD servers for both web and IPTV, was probably the first company at the show to talk about standardized streaming now consisting of Microsoft IIS Smooth streaming and Silverlight; Adobe Dynamic streaming and Apple Live HTTP streaming, as being the only ones worth supporting.
That was a theme echoed by many, but some players had their own take on it, such as Active Networks, a long standing streaming company which focuses on interactivity, but do it all in the cloud, and send only video elements to a set top and forward keystrokes through the network to cloud servers, where all streaming is initiated ‘ eliminating half the intelligence at the set top, if not more.
Even Irdeto, a conditional access firm, endorsed the OTT drift, talking about the content management system it has already installed at Viasat On Demand in Sweden, where it manages transcoding to IIS smooth streaming and Adobe Flash and how it has a proof of concept for streaming to an iPad.
Although Viaccess wanted to talk about its new PC5 conditional access efforts, which involve new technology which helps it chase Pirate groups all the way to Hong Kong and back, it also found time to talk about its work at Boxer, where its Pay TV services are being re-directed over the public internet using extensions to the Soft@home platform that it is part of in France, which of course uses HTML and Flash streaming.
IPTV middleware vendor Dreampark wanted to talk about its new win at Maxisat in Finland, but although its main contribution was the consumer UI which was based on its scalable vector graphics (SVG) client, it was still the provision of an OTT service at its heart, alongside the existing IPTV, integrated within its existing back end. Dreampark also showed its own iPad app, but this was really advanced content search on the iPad, when the content still played on the TV set.
One vendor who was fairly disturbing in all this was Motorola. Its spokesmen must have mistaken Faultline for a sales opportunity because instead of addressing the company’s ills, and the huge weakness in Motorola Mobility’s revenues and telling us how it was planning a comeback, he spent all his time saying that black was white, business is fine, and there is no need for a product refresh.
Which for a company which reported in July that its revenues were off 18% on its year earlier with a 33% fall in revenues for set-top boxes and shipments off 29% in a business which is firmly rooted in North America which still accounted for 78% of sales, is a strange way to behave. But even then it could not avoid talking about the content management software tools that allow the merging of three screen strategies behind the scenes. ‘What’s wrong with being US focused, Motorola said, when we are seeing growth in the US market? Our previous numbers were entirely down to recession.’
This is perhaps part of what is wrong with Motorola, with its head in the sand attitude, a refusal to admit to its problems and discuss original ways forward. So incensed were the executives in question that they passed up on a huge opportunity to mention the main thrust of Motorola at the show, pushed under the headline Video Everywhere, in the form of Motorola Medios, its multi-screen service management software suite which integrates web and walled-garden content and takes in set-tops, PCs and mobile devices over both managed and unmanaged networks. This is an approach that seems agnostic to the particular streaming service which is used, but we were left wondering just how its strength in Android at the handset level would be leveraged, perhaps in allowing handsets to talk to set tops, be used as remote controls or streaming sources or at least have a role in its OTT service vision.
Last week we mentioned that Envivio, Edgeware, and Verimatrix created a merged OTT offering, and once again they were on hand to list those same three streaming mechanisms, and point to the weakness of Widevine’s position ‘ a key rival of Verimatrix ‘ in offering its own, non-standard adaptive streaming layer.
Widevine itself showed how virtually everything it does is over the top and that while it still gets most of its revenues from IPTV installations, all of its new business comes from OTT ‘ in the form of TV Everywhere services, its partnership with Samsung installing its combined streaming and DRM client on its Blu-ray boxes; its relationship with DISH Networks for its TV Everywhere OTT service, with Netflix (on the Wii only) and LoveFiLM for online video, as well as Roxio and Blockbuster for online movies, all the while hinting heavily that it is poised to reap major installations as TV Everywhere services come out from the major cablecos in the US, but without ever saying so openly.
Yes it does bundle an adaptive streaming player into its DRM deals, but because of the promised volumes of TV Everywhere style deals, where delivery is free to the consumer, the anticipated volumes are far higher. Consequently it has cut deals at a level way below ‘ consensus is around 25% of the IPTV level of fee ‘ its IPTV customers. As a result that streaming element when added to the DRM component, results in less cost per home than IPTV, not more. We would contend that these are different kinds of deals, and that a proprietary adaptive streaming player as opposed to one built on supposed standards (one from Apple, one from Microsoft and one from Adobe openly decried as non-standard) is no worse in a controlled system like a cable company’s customer base.
But of course Widevine could find that the Justice Department takes anti-trust action against TV Everywhere as a concept and suddenly its major new direction could take a tumble.
There were many other stories which took in the OTT direction at IBC ‘ the LoveFilm online player accredited on a Samsung player; Ant announcing customers to its HbbTV client for broadcast free to air OTT; Accedo opting for a Widevine partnership; Concurrent launching VoD to three screens from a single server; Netgem adding adaptive streaming support to its set top middleware. We could go on.
Pay TV is currently the market for all of these innovations not free to air TV, and by far the largest of these groups are operators who want to protect against churn by putting their existing programming on a wider variety of devices. But until they clarify their business models and gain consumers acceptance, all the technology in the world will not help them.