30 Oct 09 - The growing availability of technologies to deliver so-called ‘over-the-top’ services present both challenges and opportunities to service providers. Stuart Thomson and Graham Pomphrey investigate.

The delivery of over-the-top content – effectively meaning content providers bypass traditional service providers and aggregators by delivering services over the open internet – has been a hot topic for broadband and pay-TV providers. Recent initiatives from big industry players – from public and commercial broadcasters to TV manufacturers – that could see live and on-demand content delivered to TVs over unmanaged IP networks has given debate on the subject a new urgency.

Current initiatives

Much of the current activity has been driven by the popularity of free-to-air digital platforms such as the UK’s Freeview, which lack a dedicated return path. TV manufacturer Sony is particularly active in this space. The company is moving forward with its Sony Bravia Internet Video Service, using the Ethernet port on Sony Bravia integrated digital TVs to deliver on-demand content over the internet, and has signed up content partners in the UK including commercial broadcaster Five.

For free-to-air broadcasters, over-the-top IP-delivered services are also seen as a way to complement digital free-to-view platforms or – depending on the view you take of the pace of change – as a way to keep their business alive as on-demand consumption gathers pace. Initiatives such as Canvas in the UK (a project jointly supported by the BBC, ITV and Five) and Hybrid broadcast broadband TV (HbbTV), a pan-European initiative supported by broadcasters Canal Plus, France Télévisions and TF1 and various technology partners including ANT, SES Astra, Humax, the Institut für Rundfunktechnik, OpenTV and Philips, aim to provide a standard way for broadband content (including VOD) to be delivered to internet-connected TVs and set-top boxes.

In the UK the Canvas initiative has been driven by the BBC. Following criticism from other industry players that its plans lacked detail, the public broadcaster unveiled more specific proposals in July. Canvas proposes a specification covering a user interface, although the BBC says it is intended to be “neither a gatekeeper nor a competitive bottleneck”. Content providers will be able to customise their own internet shop-fronts, and Canvas will not own or integrate content. DRM and web-based applications could be supported. The BBC is working with the UK Digital TV Group to set a standard by March next year.

In terms of detailed technology proposals, there is still considerable uncertainty surrounding the final shape of Canvas. One dilemma for Canvas (and for similar over-the-top initiatives) is to balance flexibility and sophistication of the platform with cost. For Andrew Burke, CEO of UK set-top provider Amino, flexibility in order to future-proof the platform should be key.

“Canvas and similar OTT platforms should be flexible,” says Burke. The specifications should not be limited to particular video formats such as Adobe Flash, for example. “Our view as a company is that Canvas and projects like it need a flexible platform that allows for changing operating systems and changing of display technology and portability between devices,” he says. For Burke, the answer is to deliver services, at least in the first phase, via a high-end set-top that can mirror the user experience of the PC. New developments in chipset technology could support this, helping to ensure that the over-the-top platform is not overtaken by technology. “As the consumer offering consolidates you can think about leaving stuff in or out,” says Burke. “But now, because we don’t know what the consumer is going to consume and how it is going to be ported to the TV, the flexibility of having the same processor base between the [TV and PC] could be a way to accelerate over-the-top to the TV.”  At a future stage of development, Burke argues, it will be possible to embed an over-the-top platform in connected TVs and low-cost receivers. “But today no-one is going to make a hardware decision about how the ultimate over-the-top experience will look,” he says. For the moment, “going down the set-top route is a good place to start ”.

Such a course might set Canvas apart from HbbTV, which is envisaged as a specification that could be supported by a broad range of low-cost devices. “We should get the same capability [as Canvas] but on something that’s cheaper,” says Nick Fielibert, chief technology officer of the service provider video technology group, Europe and Asia and principal engineer at Cisco, another supporter of the initiative. “The goal was to do it on a lower level type of device. It can run on much lighter hardware than Canvas.” Fielibert nevertheless believes there would be advantages to running services over a set-top rather than direct to the TV. “There will always be a balance between cost and performance – the lifecycle of TVs is longer than a set-top that sits under it,” he says. “Having an external device still makes sense and is easier to update afterwards.” This would enable the deployment of higher-quality user interfaces. “There a place for an advanced HbbTV set-top device,” says Fielibert.

In the meantime, technology companies are moving forward. Digital TV software company ANT has been involved in the development of HbbTV and at IBC launched a new managed service concept based on the ANT Galio HbbTV platform, which is designed to bring a range of web-based multimedia content to IPTV and hybrid services. According to Richard Baker executive vice-president of sales and marketing, HbbTV-compatible devices will be available by Christmas. He says the development of the standard was driven partly by German broadcasters rolling out HD services that also want to develop advanced HD text applications as well as enhanced video applications such as VOD and catch-up. “It makes for a pretty engaging experience,” he says. “It helps to extend the broadcaster’s relationship with the consumer and the user interface looks fantastic.” At IBC, the company demonstrated a web TV service accessible by pressing a single ‘web-TV’ button on a remote control. “It brings up a service that’s completely independent of the broadcast network and can just as easily offer broadcaster-controlled applications like catch-up services as well as internet services such as YouTube and Flickr. It means broadcasters can target different demographics – those more comfortable with traditional linear channels can use the broadcast stream while those wanting more interaction can go for the IP option.” He says it offers a “seamless transition” from broadcast to IP, which means it could tempt broadcasters that might have been sceptical to enter the web world.

For free-to-air broadcasters relying on one-way platforms to deliver broadcast services, the appeal of over-the-top is obvious. For pay-TV operators, however, over-the-top TV is more commonly seen as a threat.

“There is a change in the paradigm,” says Jobst Mühlbach, vice-president, EMEA on-demand solutions at technology provider Arris and a former executive at German cable operator KDG. “Today’s message is about value-added services and good content from various sources. People want to understand how to exploit their video libraries in general.”

While over-the-top services could present a threat to pay-TV service providers, they also present a number of opportunities. In the first instance, existing service providers with content rights and an infrastructure that enables them to secure and bill for content are probably better placed than, say, TV manufacturers to deliver services. Moreover, over-the-top delivery can enable them to extend their offers to new subscribers that were previously out of reach of their cable, IP, terrestrial or satellite infrastructures. It can also enable service providers with one-way networks (such as satellite or digital-terrestrial) to offer on-demand content to existing subscriber bases.

“We are seeing many more operators come into the VOD market through DTT and DTH satellite, able to deliver a full platform of content to DVRs,” says François Pogodalla, CEO of set-top supplier ADB. “You connect the set-tops to the internet and deliver content via progressive download. It’s an over-the-top service in the access network but looks like a managed service because you’re delivering a pay-TV service.” Progressive download technology is, like adaptive bit-rate streaming, designed to smooth out the delivery of video by providing a buffer between the arrival of the stream and its display on screen. The technology does not necessarily require a DVR as the end device – something like an SD card can be sufficient.

Three screens

The idea of delivering content to ‘three screens’ (the TV, PC and mobile) is currently exercising the minds of technology suppliers. Technology platforms need to be able to manage the supply of content to multiple devices, using multiple encoding formats and multiple DRMs, from a single infrastructure that will allow consumers to pause the show they are watching on one screen and take up from where they left off on another.

“The next stage is to deliver to any device including the PC or mobile,” says Pogodalla. “It’s easy to stream a movie to a PC but it’s hard to deliver a consistent service. People want to rent a movie or show and be able to move around to watch it on a PC or iPhone.”

The growth in availability of rich web-based content means that operators are now moving to incorporate web-based services into their content ingest systems, according to Arris’s Mühlbach. “In the end it’s giving you infinite content. You can fetch content from various formats and be able to deliver it in a pay-TV format but also to different devices,” he says.  

TV technology provider SeaChange International was one of many companies to use this year’s IBC trade show in Amsterdam to highlight delivery of content across three screens, including a ‘follow me’ application, allowing a subscriber to pause a live or on-demand stream on one device and take up watching it from where he left off on another.  

Harmonic used IBC in September to highlight MediaPrism, its converged content delivery infrastructure, which includes its StreamLiner video-on-demand platform, capable of delivering video from a single server to a range of devices. Service providers with their own distribution infrastructure and a clear relationship with the end customer are likely to be in the best position to deliver a unified experience across multiple devices – and competition from the outside is forcing them to think about how to carve out a space for themselves. “Operators are moving more and more rapidly because they are competing with pure over-the-top players like Microsoft XBox, Apple or content providers themselves,” says Tom Lattie, director of broadcast and new media at video technology company Harmonic, who argues that service providers should be in a good position to stake out their own territory by providing a unified package incorporating Quality of Service, something that could be appealing to consumers who would otherwise be left to their own devices to find content from a range of suppliers using disparate technology platforms.

According to NDS’s senior vice-president research and development, new initiatives, Nick Thexton, operator-controlled OTT connectivity is a given but the service provision behind it is not. “We’re working on providing a service platform in a well managed environment,” he says. NDS’s Infinite TV offering, designed for the free-to-air market, is a delivery mechanism for OTT internet services to be delivered to the TV via an operator-controlled environment. “MSOs have seen that revenues from broadband have gone up much faster compared to TV. It’s beginning to flatten out as it has become commoditised so it’s likely they’ll start looking again at TV services and how to monetise them.” He suggests that the way to monetise OTT services is by bundling it as part of a subscription offering. “In the pay-TV world, we’ll see very specific OTT solutions, bound very tightly by the platform,” he adds. “Operators are aware of a number of issues, including Quality of Service. Would a 20 year-old be prepared to pay for TV services when they’re used to accessing anything they want on the internet for free? Probably not. But as they get older, wealthier and have less free time they’ll pay for a good quality, premium service that implements options such as internet services to the TV along search and recommendation technology.”  

For converged delivery to multiple devices, says Harmonic’s Lattie, IPTV providers are likely to be in the best position to benefit: “IPTV operators overbuilt with a newer infrastructure so they could be in a strong position to offer a more comprehensive type of service.”

This is one reason that service providers could increasingly look to IP to complement or even replace their legacy infrastructure. “The end goal of cable is an IPTV solution,” says Edward Allfrey, business development director for cable at video technology company Tandberg Television, an Ericsson subsidiary. “Most operators have focused on delivering lots of bandwidth to customers but have not seen the business case for taking ownership of the connected home.” An IP-based infrastructure can enable them to deliver content and value-added services (including targeted advertising) more easily by using an IMS back-end infrastructure and DLNA within the home.

Technology for OTT

One of the problems that over-the-top faces is how to provide a service with the quality of viewing experience that TV users expect.

While they clearly aim to facilitate ‘over-the-top’ delivery, technologies such as Canvas and HbbTV also benefit from the support of service providers with their own infrastructure. “Networks can provide over-the-top with QoS if you cache the content close enough to the subscriber,” says Cisco’s Fielibert. One technology that could help is adaptive bit-rate streaming – currently the technology du jour in mobile TV – but at the cost of quality.

Adaptive bit-rate streaming, developed by Move Networks, could help. The idea is that the bit-rate at which video is encoded can change as available bandwidth fluctuates, with the stream adjusting itself (relatively) seamlessly between versions of the video at lower or higher bit-rates. The goal is “consistency of experience” rather than Quality of Service.

“The adaptive stuff is really key,” says Suzanne Johnson, senior industry marketing manager at global content delivery network provider Akamai. However, she says, “there is a lot of market education that needs to be done to go in that direction.” Notably, content companies have to encode in a number of bit-rates, meaning they have to store more assets.

So far Envivio and Inlet have built encoder platforms that support adaptive bit-rate technology. For Ian Locke, vice-president of strategic alliances at Envivio, it has the potential to render dedicated VOD platforms redundant as the content is ingested onto an HTTP server automatically, effectively providing NDVR functionality by default. “You get all the ingest that VOD servers used to do,” says Locke, referring to the Apple HTTP system. Every piece of video is cached on a HTTP server – something for which people previously relied on high-end VOD servers. However adaptive bit-rate streaming has primarily been seen as a mobile video technology. “It’s a pretty new idea for the set-top box guys,” says Locke.

VOD technology specialist Edgeware’s vice-president of business development Göran Appelquist agrees. “New streaming formats are coming all the time and we are seeing interest in HTTP and TCP even to set-tops,” he says. One possible application, he says, is to using adaptive bit-rate streaming to deliver video over DSL networks to areas that have previously been outside the reach of IPTV services. At IBC, Edgeware demonstrated delivery of video to a set-top with a Microsoft Smooth Streaming client.         

At a more advanced stage of use for TV delivery is progressive download. At IBC, interactive TV specialist OpenTV demonstrated the integration of web content with TV services for a range of usage scenarios. One of the most cost effective ways for operators to enhance their offering is via catch-up and VOD services, both of which can benefit from IP connectivity. “It could be done by pushing content directly to a DVR but these types of services are limited by the size of hard drives in the devices,” says Miriam Fitting, senior product marketing manager at OpenTV. “If an operator uses their IP connection, however, they can begin offering pull VOD service using our progressive download technology.” This technology enables content to be viewed while it is being downloaded, providing a streaming VOD experience and allowing operators to launch a revenue generating service in a low cost way. In instances where there is low bandwidth, the content can be buffered. “The middleware can compare the available bandwidth with the quality of the content and make the necessary adjustments,” says Fitting.

Allied to delivery are technologies that ensure the content or service provider manages the user experience, which is particularly important for delivery to TV audiences.

UK company Miniweb has developed an interactive service platform that allows network operators and device manufactures to deliver broadband video and interactive services to end-users.  According to CEO Andrew Carver, at the heart of the solution is offering a means for operators and content owners to develop new distribution channels and revenue streams. “Hybrid models where you enhance broadcast with interactive content can add real value. For the end-user, they get a much wider range of content and a richer experience, including the ability to better search for content and receive recommendations,” he says.  

According to Carver, operators are looking for technology solutions that enable them to offer OTT services whilst remaining in complete control  of the process. “Operators understandably want viewers to stay within their walled garden which means they can ensure the quality of content as well as monetising it. Miniweb sits in the middle and facilitates with a view to getting as much content as possible to as many devices and networks as possible.”

Another important facet of multi-device delivery over IP is security – an area where pay-TV and broadband service providers clearly have a role to play. The function of traditional security providers is starting to change to reflect the changing shape of the TV landscape and the merging of broadcast environments with IP. According to François Moreau de Saint Martin, CEO of France Telecom-owned digital TV security specialist Viaccess, the company has developed a range of VOD services to reflect this. He says operators are starting to migrate from push-VOD services to IP-based solutions in a hybrid environment. “Operators have seen the value of push VOD via broadcast and are now making the move to VOD delivered via IP, enabling them to offer more advanced services. The best way to approach it is via a hybrid model that allows them to offer OTT services,” he says. Viaccess offers a range of solutions for VOD, enabling operators to distribute content securely over broadcast or IP. However, it also offers, via its middleware partner Orca Interactive, supplementary services. “We can offer a service that combines security, with middleware to enable operators to provide user-friendly services to their customers such as enhanced user interfaces and search and recommendation engines,” says Moreau de Saint Martin.

Verimatrix’s CEO Tom Munro has also seen a move towards hybrid models. The CA vendor initially developed software-based security solutions for IP networks but last year decided to make the move into the DVB space. “We saw demand from operators with a hybrid network that wanted a single integrated security solution. One way is for them to deploy a smart card from company ‘X’ for the broadcast stream along with software for the IP side. We don’t think they need company ‘X’. It reduces the complexity to have a single solution.”

If a role as a technology platform provider (offering a secure environment for content providers and a unified experience for consumers) presents a possible way for pay-TV and broadband service providers to embrace over-the-top services, from the point of view of both the content provider and the service provider (whether that’s a traditional pay-TV operators are a pure-play over-the-top usurper), big questions remain over the commercial viability of such services. Value-added revenue streams, such as interactive and targeted advertising, are still very much in their infancy. While DVRs have proved to be immensely popular, success at monetising VOD services has remained elusive, while the size of the overall market for long-tail content (a natural fit for over-the-top delivery) remains uncertain.

More promising is the use of over-the-top as a complementary activity for existing broadcasters and service providers. Free-to-air broadcasters can use the platform to deliver VOD and, in markets where TV is predominantly delivered over cable (or IPTV), they can team up with service providers to deliver a more consistent experience as well as a platform capable of overlaying value-added services (such as targeted advertising), though the benefits of this remain to be proven in practice.

Sidebar 1: The Apple iPhone effect: the widgetisation of TV

The success of the Apple iPhone and in particular the App Store, allowing third-party application developers to deliver content and applications easily to an open, managed platform, has led many to wonder if a similar model could be applied to TV. Recent initiative by Yahoo! and others have given the idea added impetus.

Within the pay-TV environment, Microsoft has developed enhancements to its Mediaroom IPTV platform that can facilitate the delivery of over-the-top video to set-tops and allow service providers to integrate metadata from third-party hosted content providers. However, according to Ted Malone, senior director, product management for the TV, video and music platform business at Microsoft, most of the platform’s customers are currently more interested in applications such as photo sharing and email, rather than the integration of broadcast and broadband video. “They are not ready to do that for business reasons,” he says. “Part of the story there is what business makes sense. Consumers may run out and buy internet-connected devices but it’s not playing out that way.”

Moves towards wholesale so-called ‘widgetisation’ of TV, however, inspired by the Apple iPhone model, may be a step too far, even if ‘widget’-like interfaces are becoming more common. “We have no app store right now and most operators are not ready to do that on the TV yet,” says Malone. “They are not willing to take the risk that Apple took with the iPhone.”

Accedo, which is active in this spaced, has launched an ‘application store’ as a white-label service to be branded by service provider partners. “For us an application store is a way to distribute apps to the right consumer and the right device at the right time,” says Michael Lantz, CEO of Accedo. He belives the company’s role is to allow content partners to focus on developing applications, which it will then format for the various middleware platforms to which it ports the applications.

In the pure over-the-top world, Accedo has also been active, striking deals with Samsung (in 13 markets worldwide), Philips (in France and the Netherlands) and Sharp (in the US and Canada) to deliver applications direct to connected TVs. Here, says Lantz, the approach is more overtly ‘widget’-based, with Samsung using the Yahoo! TV platform.  Yahoo! provides its own application store, or widget gallery, to which Accedo ports its own applications. Philips uses the CE-HTML web browser format, which has been endorsed by the Open IPTV Forum, while Sharp has adopted the Japanese Netfront browser. 

Matthew Huntington, vice-president of product marketing at OpenTV believes TV widget-type services will offer a means for operators to manage and monetise internet content. “If operators can offer a wide range of internet-based applications in an open environment that they can police, whilst allowing creativity to prosper, they’ll make money from it,” he says.
However, for widgets to prove popular, they’ll have to be well thought out, according to NDS’s senior vice-president research and development, new initiatives, Nick Thexton: “We’re looking at intelligent ways of integrating social networking. While it’s always tempting to just put the internet on TV, everything has to be adapted. Web APIs will be a big part of the offering.”
Nagravision, a provider of value-added content protection solutions, launched its new widget publishing platform at IBC. The platform allows operators to jointly develop with content partners, advanced widget services relating to live or on-demand content for pay-TV subscribers. “Because the web has become more TV-like, it follows that the TV can become more web-like,” says Ivan Verbesselt, senior vice-president marketing, Nagravision. “The development of web 2.0 has led to a more graphic approach, with less text, more graphics etc which works much better on the TV screen.”

Verbesselt  agrees with Thexton that widgets must be “relevant and good quality”. Only then can an operator think about monetising them. “We’ve already developed a range of widgets but we know they won’t all work,” he says. “It will take time for the industry find which kinds of services will prove most successful.”

For now, the processing power of legacy set-top boxes means HTML and Java will be the most likely means of publishing web services to the TV, but in the future, Flash will enable a much richer user experience. “If you’re prepared to use HTML and Java as the basis for web services on the TV, it’s possible now on legacy set-top boxes,” says Huntington. “But Flash will be a key technology and as the processing power increases on new set-tops, operators will be able to use offer more impressive services. Next year we’ll see devices with 1,000 MIPS chips that will allow operators to deliver advanced applications with confidence.”

Verbesselt agrees, adding that it will be easier to monetise services as the quality improves. “Operators might need to launch services on low-end boxes, but as widgets become more appealing with rich Flash technology, operators can start to monetise them more easily,” he says.

Sidebar 2: Where the content is: search and discovery

One of the hot topics at this year’s IBC was the evolution of technologies that enable end-users to search for content more efficiently. On the one hand, the introduction of OTT services delivered by operator-controlled networks opens up a wealth of new content to be sought by end-users, while on the other the link to the internet enables new means of offering search and recommendation service.

Viaccess-owned middleware company Orca Interactive has developed middleware with search and recommendation at its core under the Compass brand. “There are basically three ways operators can help customers find relevant content,” says chief technology officer Ofer Weintraub. “Exploration, where the user searches a database of content based on terms such as preferred actors or directors; algorithms that detect users’ viewing habits, which can provide a means for operators to promote relavant content to customers; and there is also a social aspect, so recommendations from friends are very important.” Orca recently partnered with Trusted Opinion, a social network and user review website, to allow viewers to share content recommendations with friends and family over the web and to the TV. “A social network creates trust and can convince people to try new content,” says Weintraub.

Interactive TV specialist OpenTV recently announced a collaboration with Jinni, the creator of a personalised discovery engine for entertainment content, that will see enhenaced search and recommendation services being integrated into OpenTV’s latest middleware. Interestingly, Jinni’s technology can analyse content by moods such as ‘funny’, ‘dark’ or ‘gripping’. “By integrating with a third party we can offer superior search and recommendation services that’s very intuitive. We’ve worked it into our middleware to make the whole approach to finding content much more natural. When you consider how much content is becoming available, from a variety of sources, enabling users to easily find it is important,” says Miriam Fitting, senior product marketing manager at OpenTV.

The company’s search function includes the ability to search beyond the set-top box by connecting with online databases. OpenTV says this allows operators to store large amounts of content without having to update and communicate an entire inventory to the set top box.
At IBC, SeaChange International also demonstrated integration of Jinni’s content recommendation engine with its on-demand platform. This allows subscribers to reach out to a subset of the Jinni database that provides information about the VOD titles available on the service provider’s platform. 

Aprico is a software company and part of Philips Electronics that offers patented recommendation and targeting technology. One service demonstrated at IBC was the ability for users to generate their own channels based on a theme, which is automatically populated with relevant content. Aprico can bring together content from linear broadcasters, VOD libraries and web-based video sites using huge amounts of metadata supplied from media company partner Axel Springer. “There are various business models for this type of service,” says Thomas Dvorak, chief marketing officer. “It can attract advertisers by matching a users’ preferences to relevant ads. It could also be sold to the subscriber as a premium service for a higher subscription, especially if an operator offered the ability to automatically record relevant content when it becomes available.”

Austrian remote control developer Ruwido specialises developing devices that make it easier for users to interact with their TV screens, including for search and recommendation and for communicating with friends and family whilst watching the TV. At IBC, Regina Bernhaupt, head of user experience research, said the interaction between the remote control and the user interface should become as intuitive as possible. “Users are used to being constrained by technology. Ruwido is focussing on the user experience and enabling the user to tell the technology exactly what it wants to do,” she says.