Service providers are increasingly turning their attention to the concept of ‘three-screen’ delivery. But what does it mean in practice? Stuart Thomson searches for a definition.

What is a ‘three-screen strategy’ and why is it important? The so-called ‘triple-play’ of offering TV, broadband and telephony (including mobile telephony) is well established, but it has until now largely been a matter of marketing three services in a bundle as a way to increase revenue per subscriber and reduce churn. The idea that platform operators could use their access to different devices used by their customers inside and outside their homes as a way to offer new content-based services is something new.

The thinking behind the three-screen strategy, so-called, is to cement the loyalty of the triple-play subscriber by offering actual services and applications that work across the TV, PC and mobile phone that he or she finds useful and would soon miss. This, the thinking goes, would prevent subscribers from churning out of any of the three or four services – TV, broadband, fixed and mobile voice – they take from a single service provider.

Three-screen concept

Much current interest in the three-screen concept has actually evolved thanks to the convergence of two related concepts – ‘over-the-top’ and ‘connected TV’ – on one screen: the TV. The success of the BBC iPlayer catch-up service in the UK and Hulu in the US, and the development of initiatives to deliver these and other services to the TV screen rather than the PC (including Project Canvas in the UK, the pan-European HbbTV initiative, and moves by consumer electronics manufacturers including Sony to bring content direct to their flat-screen TVs and high-end games consoles) has galvanised the pay-TV industry. If content rights owners and consumer electronics giants could team up to provide a compelling service – including video-on-demand – with or without a monthly subscription, what’s left for the middleman – the pay-TV aggregator?

Jonathan Beavon, director of segment marketing at TV technology provider NDS believes there is a lot of confusion amongst service providers about the meaning of three-screen distribution and uncertainty around what to do about it. “Some people talk about it in the abstract while [operators] with more confidence have one or two use cases they see will help them keep subscribers,” says Beavon. “At the other end of the spectrum some want to deliver all types of content to every device and there isn’t a proposition that consumers will understand. There is a great deal of confusion.”

However, this doesn’t mean that telcos can afford to ignore the concept altogether. Nabil Kanaan, director of product marketing at video technology company RGB Networks, agrees that there is uncertainty about what consumers want, but maintains that service providers currently view the three-screen concept primarily as something to think about in taking decisions about how to invest in infrastructure, rather than in terms of the immediate consumer experience. “Yes, ‘three screen’ delivery is a meaningful term currently, especially when you consider that operators are making infrastructure and operations model decisions that affect the next two to five years,” he says. “The consumer experience side of three screen is what is mostly discussed in the media, and that side of the debate still has many unknowns and is likely to go through a number of experimentation iterations before ‘killer apps’ are found and implemented – assuming that killer apps exist.”

However, three-screen consumer experience needn’t in any case immediately mean simultaneous delivery of video streams to different devices. The term can be used to describe a range of applications that work via linking mobile devices to broadband and the TV, including such well-established hooks as offering the subscriber the ability to programme a DVR via a mobile phone. “It’s not just about watching video but navigating, getting recommendations, sharing selections or recommending to friends,” says Joe Matarese, vice-president and general manager of on-demand strategies at broadband and TV technology provider Arris International.

Connected TV

So what to do for now? At a basic level, for platform operators, the three-screen concept is compelling. What better way for them to counter the threat from new over-the-top content players and low-cost service providers than to play to their strengths – an existing billing relationship with the customer and control of their own delivery network – to deliver services that parvenu rivals will struggle to equal?

In the UK, both incumbent BT and alternative telco TalkTalk have joined the Canvas consortium, the BBC-led initiative to deliver on-demand content via broadband to connected digital-terrestrial and satellite TVs. The project could highlight their ability to deliver Quality of Service as a differentiator. But in both cases, an eagerness to join also highlights their respective failure to effectively crack the mass-market with walled-garden IPTV services, in the case of BT with the Microsoft Mediaroom-enabled BT Vision hybrid service or, in the case of TalkTalk, with the homegrown former Video Networks platform inherited from its acquisition of Tiscali UK.
For these and other operators, an IP-based three-screen strategy that does not require them to take on the role of content aggregator could provide a more cost-effective way of achieving the goals they had for their walled-garden services – principally to counter threats to their fixed-line business. It makes the triple-play more compelling to subscribers and offers a way to differentiate other than by competing on price.

Simon McGrath, chief marketing officer at TV technology provider SeaChange International and its European video-on-demand division, On Demand Group (ODG), believes that the delivery of content across multiple infrastructures – fixed and mobile – will be effective as a way of reducing churn. A triple-play that has services working across its various parts is ‘stickier’, to resort to that well-worn industry adjective, than one that tries to encourage its customer to adhere to its service, thanks to a fleeting ability to offer the cheapest available bundle.

Of course, reducing churn is one thing. Finding ways of actually making money from three-screen distribution may prove trickier. While some pay-TV subscribers have been willing to pay extra for multi-room subscriptions, the idea of paying for something perceived to be an ‘internet’ service may meet with less enthusiasm. Another potential revenue source is advertising. “Service providers can provide access to multiple screens and advertisers have the ability to place ads that can reach these devices,” says Arris’s Matarese. However, the ability of operators to make this scale remains to be proven.

It is of course possible that end-users could be persuaded to pay extra for truly compelling features. One of the most widely-discussed applications that relate to the three-screen world is so-called ‘place-shifting’. This often-talked about concept envisages a typical user, for example, watching a TV show in the comfort of his living room on a flat-panel HD screen, remembering that he’s late for an appointment, pressing ‘pause’ on his remote control, then going and catching a train in the knowledge that he can resume from where he left off by watching the rest of the programme on his iPhone. Of course, to deploy such an application would involve investing in a highly-sophisticated back-end infrastructure that is able to store data relating to individual subscribers across different delivery channels. Place-shifting has been demonstrated by a number of vendors such as SeaChange and Ericsson at recent trade shows. It could be seen as the jewel in the crown of a three-screen delivery system. But whether there is a business model to support the infrastructure investment that would be required to enable it is an open question. “How much people are going to place-shift is another question. There is an opportunity cost of that engineering research being not put to something else,” admits Alan Delaney, head of business development, IPTV and connected home, solutions area TV, Ericsson.

It is a point taken up by Thierry Fautier, senior director of convergence solutions at video technology company Harmonic. Fautier is skeptical about the balance between the costs and benefits of putting infrastructure in place to support such an application, not least because of the limited capability of mobile networks to support streaming video.

Fautier believes that ways to solve the problem of delivering content to mobile devices will be key to the success of any three-screen delivery strategy. Currently, he says, almost all video consumed is streamed rather than downloaded. However, that has much to do with the fact that consumption to date has largely been via PCs and laptops tethered to fixed broadband networks. However, as connected TVs become more pervasive, some viewing currently done via the PC could migrate back to the TV screen; on the other hand, a wide variety of laptops, netbooks, iPads and other connected computers could be used to consume content while on the move. For Fautier the iPhone – a connected handheld device with substantial hard-drive storage capability – has changed the name of the game more than any other product.

As the population of such devices expands, so content owners are increasingly reaching out to them. The result, believes Fautier, will be a shift from streamed to stored content. “I think what we see is a decoupling of content transmission and consumption,” says Fautier. “Today, operators see that you can have a nice experience if you do progressive download but an even better one if you do download and play later.” The ever-increasing storage available in devices will enable operators to deliver content that can be consumed when the device is not connected to the network. The popularity of streaming over downloading on a service such as BBC iPlayer is due, he argues, in part to the fact that you can’t download content from the BBC service to a handheld device. For mobile phones and other portable devices, connectivity is the key problem, particularly as services become more popular. Fautier therefore believes that operators will target their three-screen offerings towards high-end mobile devices such as the iPhone that are capable of storing significant amounts of content, and ignore the larger population of low-end devices.

Control of the chain

Delivery of content to multiple screens on multiple devices over multiple networks need not be done by a platform operator with control of all the pieces in the chain – mobile as well as fixed – but it makes life easier if it is. It helps to have control and to be able to set quality parameters. “Operators need an agreement with the mobile provider or it’s going to be a best effort delivery,” says Fautier.
It is also easier if the integrated operators know exactly what types of device they are delivering content to. “It is difficult to support variants of applications on different devices. It’s possible but it takes a lot of effort,” says NDS’s Beavon. Typically even vertically integrated operators will be supporting multiple generations of set-tops. Adding a whole range of devices at the end of someone else’s network could therefore be challenging.

In reality, three-screen deployment is likely to be led by large incumbents that own fixed and wireless assets. “It’s a huge advantage to own your own network and infrastructure because you are not held hostage by your wholesale provider,” says McGrath.
RGB’s Kanaan goes further, arguing that the integrated model is the one that is likely to win out in the end. “In the long run, we believe content owners will likely want to limit their distribution channels to simplify their business model by focusing their energies on integrated service providers that will offer the complete three-screen experience. These will likely also be network infrastructure owners for the most part, who also ‘own’ the consumer with the triple- or quad-play service model,” he says. “However, before getting to that model, there will likely be more experimentation with various delivery models, including over the top content providers, or even consumer electronics manufacturers who bundle in content in an effort to differentiate and sell their devices.”

The problem of unreliable mobile connections and bandwidth can be ameliorated to some extent by adaptive streaming techniques developed by Microsoft and Apple, as well as progressive download, expanding the variety of networks over which an acceptable level of service can be delivered. Technologies including Microsoft Smooth Streaming or Apple HTTP streaming have been used to deliver services of acceptable quality over bandwidth-constrained wireless infrastructure.

For SeaChange’s McGrath, the bandwidth issue is likely to become less relevant as operators roll out next-generation networks. A bigger challenge is getting the workflow systems in place to manage the ingest and delivery of content over multiple networks, including transcoding of video in different formats for different devices and managing metadata so that the content can be found by users.

In order to deliver a three-screen experience efficiently, operators will need to ensure that their back-office systems can support the delivery of the service. “In the network, there has to be focus on product management, a system that understands, from the subscriber management system, which customers have bought which packages,” says McGrath.

Arris’s Matarese points to the importance of service assurance. A service provider’s customers are not likely to accept the kind of ‘best-effort’ quality that is often associated with internet video if they are paying for it as part of a package. And having put years of effort into delivering video-on-demand on top of linear broadcast services, operators are now faced with doing the same for multiple devices over multiple networks, with all the complexity that involves.

In general, there is a consensus, certainly amongst technology vendors, that operators should look to deliver services to multiple screens over a single infrastructure. Telekom Austria, which is aiming to deliver a wide range of services across devices in the home and is in the fortunate position in its own market of being both the major fixed and wireless service provider, recently decided to re-build its IPTV platform using Ericsson’s Internet Multimedia Sub-system (IMS)-based middleware platform, delivering multi-screen capability via set-top boxes supplied by ADB.

Ericsson’s Delaney says that with the delivery of content now possible to games consoles, e-readers and countless other devices, there are “far more than three” screens in the average home. Developing services for each of these in separate silos leads to higher capital and operational expenditure as more services are added. IMS, which has hitherto largely been applied in mobile networks, allows the service provider to abstract applications and services from the delivery network, removing the legacy problem of delivering content via separate ‘silos’ and replicating costs.

Integrated infrastructure

On the video side more specifically, equipment vendors have recently invested in technologies that can deliver content to multiple devices via a single integrated infrastructure. Harmonic’s acquisition of transcoding specialist Rhozet and earlier of on-demand technology provider Entone enabled it to deliver live and on-demand content from multiple sources to multiple devices. Fautier says the company already has a number of three-screen customers, though none have been announced. SeaChange meanwhile has acquired Mobix Interactive, which in McGrath’s words “does what On Demand Group does but for mobile”. Existing clients include Vodacom and O2.

RGB’s Kanaan points out that operators have historically invested in video infrastructure completely separately from infrastructure that is aimed at serving the PC or mobile. “The challenge to ‘converge’ the equipment, as well as the operational model, is extensive and in some cases involves a complete redesign of the underlying platforms – hardware and software – that house the encoding and transcoding products that are being used for three screen content delivery,” he says.

Amongst the strongest proponents of a three-screen strategy are telecom operators with mobile and fixed-line interests, led by Orange, which is also a leading pay-TV player in its own right. Telekom Austria has also placed delivery of content and added-value services to a range of devices in the home at the forefront of its own IPTV strategy.

However, service providers with a strong legacy pay-TV base also stand to benefit from a coherent three-screen strategy. UK cable operator Virgin Media, for example, wants to use its existing relationship with customers and its fixed and mobile network assets to deliver a range of converged services.

“We do a lot already across the three screens,” says Alex Green, executive director of TV and online at Virgin Media. “On the video side in particular we have a lot of online video – mostly short-form video across entertainment, sports news and other areas. We see online as a way to help you manage your entertainment in the home much more effectively.” The operator is also looking to make the most of its relationships with content providers to deliver a meaningful three-screen experience. It recently signed a new deal with Disney covering the delivery of Disney on-demand (including the new Disney XD channel) across all platforms. “On online and mobile we are looking to do much more in terms of long-form video,” he says.

Green points out that ‘three-screen’ encompasses a range of other activities besides video delivery, including email access across fixed and mobile devices (in Virgin Media’s case using Google Mail). In terms of giving access to video content, he says that the different platforms can complement each other. While the same content might be available across all devices, the key is to give maximum flexibility to the user in how they see it. “It’s not so much about completely different content but about offering it in a way that works in terms of ease of use and ease of finding it,” he says.

Truly converged applications including place-shifting might be a bit further off. “We are well placed for that but I would not underestimate the complexity,” says Green. “It’s about the management of the data and how that is linked to the customer. That is where the power of having a direct relationship with the customer with the right to collect data for that customer in a way that a pure-play web content provider may not be able to do is a tremendous asset to have. However I would not expect that any time soon because of the complexity.” For Green, access to three screens can give Virgin Media a way to differentiate its offering other than by competing as a content player. “We don’t position ourselves as an owner of unique content in the way that Sky does [in the UK],” he says. “We do want to differentiate ourselves by ease of use of our products and greater capabilities…as a result of the capacity we have into the home via our two-way network.”

As integrated service providers look to a possible future without walls – or walled gardens – three-screen delivery could be set to emerge as their Holy Trinity.

Sidebar: Content security: the condition for success

In order to deliver a three-screen experience, service providers will have to secure content rights – something that could be easier in small markets with a few integrated players than in large diverse markets where multiple service providers compete across a number of different infrastructures. “A lot of service providers realise you need to clear rights across multiple devices,” says Simon McGrath, chief marketing officer at TV technology specialist SeaChange International. “It’s a distinct trend.”

However, the perennial problem of content security could stand in the way of service providers securing rights to content across platforms. “The business rules can be implemented as flexibly as anyone could want, the question is whether the content owners trust the DRM systems that are being talked about,” says Jonathan Beavon, director of segment marketing at NDS.
Currently, there is no sign of a single DRM standard emerging from the fog of competing consortia. Proprietary solutions from

Microsoft and Apple jostle for market share while abbreviation-rich moves to create viable standards – DTCP, CPCM, DECE – are joined by new initiatives such as KeyChest from Disney. A multi-DRM future looks to be a safe bet.

That would suggest that delivering content to multiple devices from a secure headend (that can handle multiple DRMs) would seem to be the way to go. Thierry Fautier, senior director of convergence solutions at Harmonic, believes that three-screen delivery is primarily going to be network-based. He points to the relative ease with which operators can record at the headend everything the individual subscriber records on his or her own set-top in the home. It is more practical to deliver content to different devices in this way than to try to enable the transmission of individual copies of content, stored on a home media server, between different devices in the home and outside it. “By the time this is possible technically and legally, maybe we will be retired,” he says.

Despite his belief that local storage will make the difference in the mobile environment, Fautier admits that many operators want to start with live content, largely because they lack the rights to anything else. “More important than owning the network is the rights you have to the content,” he says.

SeaChange’s McGrath agrees with Fautier that “there has to be a mix between live streaming and ‘store and go’”. Operators will need to have adequate security in place to convince rights owners that their shows can be stored on a mobile device for consumption when the user is not connected to a network. If they do not provide solutions they could find themselves sidelined by those that can – including consumer electronics companies like Apple and Sony. “Operators are thinking about how to get it right but they have to think quickly,” he says.