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New horizons for CAS and DRM companies beyond security.

It has always been a mystery to me why security vendors like Verimatrix always seem to punch above their weight in the pay-TV business. If you look at other value chains, beyond the content industry, stakeholders are credited with a relative importance directly proportional to their financial standing yet Verimatrix has even more mind-share than market-share.

During IBC this year, Steve Christian set me straight and gave me a glimpse into Verimatrix’ future, opening a world of possibilities for the Pay-TV security industry. It was a humbling “why on earth hadn’t I realized that before?” moment.

I was completing a small scouting project on cross-media content recommendation (expect a post soon on this) when we met last month, so I started by picking Steve’s brain on this topic.

A critical mass of users is required before an operator can map behaviour and usage patterns. You need lots of users to get a great service, but you need a great service to get any users. The end game is to understand the patterns of content consumption.

The problem is not only theoretical. Like all Telco’s, the one I worked for was very proud of owning precious customer data. Huge data mining projects on months-old data was the only use that data usually got. TiVo is an exception in collecting data used in almost real time.

Steve’s first point was that CAS and DRM vendors are already in the right place to transparently capture the critical real-time subscriber intelligence needed to deliver a recommendation service.

In their just-released white paper (Arming Digital TV Operators with Real-Time Subscriber Behavior and Usage Data), Verimatrix quaintly call this enabling Progress and Profit. C’mon Steve, these things always come in threes, so what’s it going to be: Profiling for Progress & Profit? Hmm not so quaint, because that’s where there’s still an unresolved issue: privacy. That’s the nice thing about white papers; you can skip the tricky bits.

If privacy does prove difficult, it could however be handled in a very transparent way. The whole recommendation concept requires transparency. People need to know why they are being recommended something to willingly make more personal information available.

The hard part to fix, in getting recommendation to work well, is collecting and understanding user data collected implicitly or explicitly.

Of course understanding the content metadata and classifying all the movie genres TV programs and whatever other content available, isn’t trivial either. This is no longer a real issue as there are now dozens of companies out there with variations on semantic analysis and other approaches with which to do this. Many of the algorithms are even available as open source. Suppliers range from TV specialists like TV Genius, bee TV or Orca to web-based solutions like hunch.com, with people like Jinni somewhere in between. Of course, if you want to build a solution from scratch there are also some pure-players in the algorithm side like Think Analytics.

But all these solutions amount to nothing if you can’t get access to significant user transactions. That is why Verimatrix can solve one of the hardest parts of the problem in a more timely way than many of the above-mentioned vendors.

I didn’t discuss with Steve whether Verimatrix would be looking to develop such features, but the company’s track record suggests they are more likely to partner with whoever is best in class in this area.

Once you able to intervene in, or just under the TV, there are at least two other key areas you can intervene on: Quality management and social networking.

The burden of managing the quality of experience with an ever-increasing range of devices, and with a broadening scope of features and services, is becoming difficult to bear for operators. Some standards like TR-069 have at last emerged for basic requirements like firmware upgrades, but no standardized solutions are available for managing more advanced issues such as monitoring the service delivered.

After many years of caution, focussed on the risk of devices creating a storm of traffic if they all had the same issue to report at the same time, even the big safety-conscious Telcos are looking to deploy agents into both their STB and their home gateways.

Whether using a standard like TR-135, or as-yet proprietary products from the likes of Agama, Mariner, Witbe or Cisco, operators actively engaging in monitoring will develop a dynamic view of how services are being delivered into people’s homes. These operators will find themselves in a position to initially deliver services with a higher quality of experience and eventually deliver even better services altogether.

But the main issues operators have encountered, with embedded monitoring has been software integration. Vendors promise trivial two-week integration efforts, but this has often dragged on to yearlong projects. Here again the CAS vendors come up with a trump card: they are already integrated with all the end devices, that is: connected TVs, STBs, Tablets, smart phones and of course PCs.

But another angle Steve Christian developed was that CAS vendors are already doing monitoring. They maintain and monitor the security of pay-content. Extending from traditional pay-content to other types of content is not necessarily a huge step to take. As anyone who’s dared to get their hands dirty with something like wireshark (this is a free network protocol analysis tool) will know, there is almost no technology barrier to getting to grips with quality metrics like packet loss or network jitter. The most important metric of all is service availability that security vendors are in a prime position to report on.

Working in an ecosystem is part of a security vendor’s daily routine. To improve the quality of experience of the end user, security vendors could easily partner, say, with an EPG meta-data provider like Rovi to ensure that the right data is available at the right place at the right time. They could also use one of the EPG quality specialists like EPGenius to add value to the EPG data by analysing it, correcting discrepancies and adding things like missing series links.

The third point Steve Christian mentioned was Social networking. We didn’t really get into any details here. We were running out of time, but also the business case isn’t so compelling. Verimatrix can enable better Social-TV implementation, but I don’t yet see any clear path to market. I do believe the Social TV will be a reality soon (see my blog here). It is not yet clear who will prevail. The most compelling demos are multi-screen with the TV as a basic video output device and a laptop, smart-phone or tablet to interact with. Fitting into that ecosystem will require agility.

My talk with Verimatrix happened just about when Toy Story3 was released, which I still haven’t seen. Steve’s passion reminded me a bit of Buzz Lightyear’s mantra “From infinity to beyond” except that his could maybe be “from Security to beyond”.

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Maybe not all cord cutting is so bad for the industry after all?

I just read David Mercer's blog called "Europe’s TV Viewers Cut the Cord: Free TV Alive And Well" on Strategy Analytics blog.
I wrote a comment on their site, then suddenly the comment feature disappeared.

After reading the European Commission’s latest household communications survey, David draws a bleak picture. European's all over the continent are saying how they are leaving cable-TV for digital terrestrial which is still making big inroads throughout Europe. Read his interesting piece here.

What I wrote as a comment was that maybe cable operators will end up leaner and meaner once they shed all those subscribers that only watched FTA on their service.
ARPU should go up and customer call centers can deliver better service and/or reduce costs.
The survey doesn't say if cable are losing their triple play or high ARPU customers which would really hurt the business.

I know that in France at least, PayTV via DTT has all but flopped.
Joe Bloggs, or Madame Michu as she's called here, considers that DTT is for free TV, Cable and Satellite for pay TV and IPTV is somewhere in between.

YouView's potential success will be more of a real test for the likes of Britain's cableco Virgin or satellite platform Sky, because the DTT platform Freeview is already prevalent in the UK. A successful YouView with monetized OTT, would constitute really scary cord cutting for pay-TV execs.

I agree with David that the landscape is changing, but maybe not as fast as he implies.
I'm sure Strategy Analytics could match some operator subscriber numbers with this declarative survey to add some credibility.

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Cord cutting may be a real phenomenon, but French VoD shows why maybe it’ll be slow

I have had the fortune to be living in France since before the Internet. I experienced the French triple-play phenomenon both as a customer and as a privileged industry insider.

One of the main promises IPTV made from thou outset was to bring a huge catalogue of on demand content, i.e. the VoD mantra we all believed in that would delinearise TV viewing in an eye-blink.

Orange was the only operator to go it alone and build a unified VoD environment from scratch, negotiating content directly – back in 2003 Hollywood studios were very condescending to operators and negotiators of the first hour often need to put their pride in their pockets.

Uncannily, Canal Plus forced Orange’s hand by acquiring their then VoD supplier (which is now called CanalPlay). With hindsight, although this was a good idea at the time, Canal Plus basically speared their main competitor into existence.

But early VoD take-up was excruciatingly disappointing and only France Telecom’s deep pockets managed to sustain the effort. Issues came from the technology and design (i.e. QoE and difficulty to navigate), and of course from the catalogue.

Now we’re almost eight years down the road. Orange still isn’t very transparent with the figures and the technology and navigation problems are still not all fixed. VoD obviously isn’t the paradigm shifting success once hoped for. However, at least it’s no longer a failure. Enough of Orange’s millions of IPTV subscribers consume VoD to keep the ball rolling and I believe actually turn a profit. The initial goal of reducing churn has been met.

But the other main players here in France, are even more opaque than Orange with real VoD ARPU. I can only surmise that, with the exception of adult content, this is because the figures are even less encouraging.

I have a simple explanation for this: The other major players like Free or Numericable have multiple VoD stores. They did not build their own deep catalogue and VoD brand, but instead gave their subscribers access to branded VoD stores like CanalPlay, M6 VoD etc. So if you are a customer of one of theses operators and want to watch a movie, you first need to decide where to go. To make things worse, prices aren’t identical; so you might even need to shop around. Believe me that’s not fun with a TV remote control.

The French content industry has awoken to this issue and discussions are underway so that some films at least, will be made available exclusively via one VoD provider who would then promote them more effectively. That might alleviate the pain, bit won't fix the core problem.

So where’s the link with cord cutting?

The parallel here is that if walled garden Pay-TV may be expensive and sometimes give a feeling of being penned in, cutting loose leaves you on your own to fend for yourself. Which service do you turn to for which type of content? A bit like which VoD store do you turn to when you’re a Free customer in France?

You might laugh at this thinking I've missed the point;  arguing that say a Boxee box or an AppleTV will enable this new provider to deliver an all-in-one experience. You might be right, but by the time they reached that comfort zone of a truly lean back experience, you’ll be paying a bill very similar to a PayTV one.

Pay-TV operators have time, if they act now - no need to run, just be realistic - to open up to enough OTT content, while still delivering that all important lean-back experience. They may see numbers erode a bit, so maybe for example Sky's natural point of equilibrium is bellow the 10 million subscriber  mark despite their beliefs.

I don’t know if Pay-TV will die in the end or if as News Corp’s Operating Chief would have it 'Cord-Cutting' is 'Flavour of the month. I do know that if Pay-TV operators play their cards right, many of us will still be paying our Pay-TV bills for a while yet.

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Take one from the IBC 2010 conference

Despite numerous visits to the exhibition, this was my first time at IBC's conference - overall the quality both in terms of logistics and level of speakers was topnotch. I only caught one sales-pitch, much better than most trade shows. If you are going to choose one source, IBC is a good candidate. The only problem is that there is just too much going one to be able to focus as my notes below show. Also once the trade-show opens there's too much pull there to stay at the conference. Going the day before seems the only way for me.

Snippets from the social media session

I caught the wrap-up of the BBC speaker: we are looking to help people find other people already talking about their programs. I expect a TV station to cater to a community created around their content, but was surprised to see one so actively looking to actually create one. The beeb’s innovative attitude is impressive. I’m curious to see if they can be successful sustaining this new mindset.

Android based tablet should bring the true democratisation of tablets device for this year’s Christmas season.

The MTV guy said that talking about social media now is 6 yrs too late; I wonder what he was talking about 6 years ago.

Scheduling is recommendation by a brand you trust that is telling you “we think you’ll like to watch this content at this time”.

On BBC iPlayer navigation is still basically by channel. So maybe TV stations won’t die after all.

The Music industry is several years ahead of TV. What Spotify does with Facebook is showing the way. Facebook isn’t as much social recommendation as social validation.

Recommendation is content coming to you, whereas search is you going out to content.

Scheduled content is often the beginning of a recommendation chain. If scheduling looses its importance, how will broadcasters promote shows that are not scheduled?

Is there really wisdom in the crowd: probably not always.

It now seems clear that Social-TV will be multi-screen so connected devices are key. Who will own this value chain, Samsung or Sony Bravia have a head start in terms of brand positioning.

Social TV ain’t easy: Scandinavian broadcaster had to close down Facebook trials around football matches as tempers rose out of control.

BBC: setting up any kind of forum requires a lot of effort to manage. One can’t simply put up a system. Moderation costs will soar.

At this stage an idea came to me that shut out the talking as I wrote it dow:

Back to the future: After the Internet enabled the long tail, is recommendation, be it social or otherwise, converging back towards front catalogue. Technology under the hood might whiz obscure back-catalogue or UGC items to the forefront in a flash. But as consumers, will we live in a world that will shrink back to hundreds of choices, not the millions the Internet once promised? Ouch, it would be like going back to the middle-ages!

Back to the session:

I heard talk of many devices at the IBC 2010 conference the three that show what a wide variety are on decision makers’ minds were: iPad, the iPad and oh yes, I almost forgot: an iPad.

Cisco #fail

Alex Balfour, is the new media guy from the excitingly named LOCOG A.K.A the 2012 Olympics organisation committee. In 20 dull minutes he mentioned the name Cisco four times and their product name 3 times, the session should actually have been called Cisco & Social media. A Cisco rep took over and when this became a clear sales pitch. I left. Come on Cisco & IBC, don’t let this sort of thing happen, your better than that. Some of the most interesting speakers in the industry work for Cisco, Yes you can!

I caught the last part of a Panel on “the way forward with online video”.

US TV networks are finding that when they promote alternative distribution channels as well as main broadcast feed, there is no cannibalisation. However movies are not available outside of the main feed and TV content is only available during small windows, so as to maximise syndication etc.

Connected TV

The last session I caught on my IBC conference day was on the Connected TV chaired by David Docherty

I was disappointed at how UK centric things were in the intro to this session. The “D-Book” that was described as some sort of holly grail is actually technical specs for UK’s DTT, what’s the big deal?

Ian Fromely from NBC Universal is an entertaining speaker, he had me smile a few times, but he didn’t seem at liberty to say much of significance, or if he did, I didn’t understand.

LoveFilm

The LoveFilm lady gave the same presentation as six months ago in London. The company is basically a UK based baby-Netflix (that Amazon now wants to buy – LoveFilm that is, not Netflix Doh!). LoveFilm is 6 years old, with 1,6M customers in 5 countries but mainly UK (1,2M). The main challenge is educating customer base for the move from mail order to digital. The digital service was launched in UK may 2009. Lack of figures on digital usage leads me to assume the take-up is disappointing. But the way Netflix is transforming its 1950’s style mail order business into an online on-demand business shows that it’s easier for these companies to make the transition than it was for Blockbuster. Consuming from home seems to be more important than having a huge choice …

Google – I’m still not convinced

The GoogleTV presenter was not giving anything away. She might as well have cancelled. Oh no she gave a scoop: GTV will be launched in US before EOY 2010! Oops we know that too.

Her presentation showed just how immature Google still is in its approach to TV: he key focuss was on 5 hrs a day average viewing (hmm I though Google was global not just a US company) – 70bn$/yr ad revenues– 4 billion TV users.

She did say something that caught my attention: “TV is reliable” to which I’d add just like fixed-line phones before VoIP. If that is really a USP of the TV then a company whose products are all branded ‘beta’ for several years after launch should stay away.

The Google spokesperson went on to say that the web needs to be a natural extension of the TV. So hooking with previous remark I take it Google is going to tame the web into being well behaved and reliable.

In response to an audience question she said “Google TV will be a free open source platform” finishing off with “If anyone can scale to support explosive demands on the Web from connected TVs, Google can”. Next time she should just take questions, cause that’s the only time she said anything of interest.

My song for Samsung

Despite prohibitive roaming charges the only talk that got me to tweet during the conference was Samsung’s. I tweeted “By saying their connected TV’s aren’t about disintermediation, but about bringing value, Samsung is coming an intermediary.”

Their site www.samsungsmarttvchallenge.eu shows they mean business and sales figures got me listening: 1 set in 4 sold in Europe is a Samsung.

On the down side Samsung’s connected TV is proprietary environment, but at least it’s built on open standards.

I’m still not actually sure what got me to sit up and listen to Dan Saunders. Maybe it’s that Google and Sony are pushing in so many directions at once in the connected TV space that I’m confused and think even their staunchest supporters will be too. Apple on the other hand is very focussed, but runs closed TV shop for now.

Samsung has the mix that feels right: aggressively pushing a single way to get TV’s connected with just enough control to keep things working, and enough openness to recreate the Appstore phenomenon that put the iPhone into orbit around the sun.

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Drowning in IBC data, media accreditation and what I intend to write about post IBC.

One aspect of going to IBC that has always been difficult for me is the deluge of information to sift through. Even as a plain vanilla exhibition visitor there are for example more compelling free trade magazines than my baggage allowance ever catered for. Most years I took IBC Daily home after the event but rarely got time to actually read them which was a shame because there is some cool writing there too.

Delegating that info sifting to one of the many dedicated sites, relying on their selection of relevant information, is an option. But then you’d first have to choose one, which is back to square one because there are so many excellent places to look. As a contributor to Videonet and Broadband TV News, I can recommend them, but there are many more.

The trade press business model we all operate under is great in that it lets all these vibrant content producers exist. Editorial independence is never in question on the sites I mentioned and rarely elsewhere. But it as a reader, one can get bored with the same company execs being interviewed over and over. Let me know if you’ve ever read anything negative about a company or product, I haven’t.

This year should see twitter really take off around the event. There’s been some confusion about hashtags as people are asking whether they should use #ibc, #ibc2010 or #ibc10. IBC’s official twitter account says the later, but there’s something a bit contrary to the twitter ethos for an official #hashtag to be created, it prompted me to quip IBC: Int’l Behaviour Control. I hope no feelings were hurt; it was a joke. Most conferences I’ve been to have several hashtags, which allow for different transient communities to coalesce, which is good especially for IBC as there are some very very different people involved.

Roaming charges means only Dutch people or those working for very rich companies will be online all the time. Every year, at every conference we are promised Wifi, it’s a bit like Waiting for Godot.

This year I’m thrilled to have been given media accreditation as a blogger so I can add my voice to the cacophony.

A downside is that I now get bombarded with even more information: I’m on the press release mailing list which has been adding another dozen or so hefty emails per day for the last couple of weeks.

They range from the terrible: i.e. a non-descript press release about two obscure companies working together in a part of the industry I didn’t even know existed. I had no idea as to why this was significant and the press release didn’t alleviate my ignorance.

An example on the better side was a press release followed by a phone call from a company called Vidyo. They are hoping to bring the rate adaptive revolution - which as I often say, is not prominent enough in our trade press - to the corporate sector, with a robust videoconferencing solution at a fraction of the current cost (the video stays alive even if the network conditions deteriorate, its quality adapts). I hope to go the their press briefing if I can take a break from my judging duties on Friday, that way I get a free lunch, otherwise I’ll just content myself with a visit to their booth like any common mortal.

Now I’m officially “media”, I am surprised that no targeting seems to happen. In my Video Quality specialty field I received only one piece of mildly significant news. Agama is responding to the IP/Cable convergence by launching a dedicated cable product. Ineoquest, the segment leader, are showing their regular product line-up at the show and had the decency not put out a press release with no information – an example to follow. But I’m sure some of the other players are showing new features that I would have noticed and probably written about, but I received nothing else.

Over 20 years ago, fresh out of University, I helped create a company called the World Press Centre to intermediate press releases. They idea was that journalists received so many press releases that they simply couldn’t handle them. On the other side PR firms and blue-chip companies struggled to ensure the right journalists got their content (preferably friendly journalist being given a head start). It was a pre-internet era and we failed for a variety of reasons. But I see the need is just as strong today. Back to the future, maybe that’s something my entrepreneurial side will look into again if IBC doesn’t bring in enough new work ;o).

Having glanced through most of the voluminous material I received pre-IBC hasn’t really changed my objectives. In what free time I have I’ll be looking into 4 areas:

  • Debunking 3D which is I believe just a distraction (but I’m still open to being convinced otherwise),
  • Implementations of rate adaptive technology, which I believe will enable profound changes in our industry,
  • Content navigation/recommendation/filtering which is an even more critical stumbling block as TV/Internet convergence looms ever closer,
  • Keeping abreast of the latest Quality monitoring and Quality assurance developments, which are one of the last green fields of IP services, especially IPTV.

I won’t be posting anything more here during the show, nobody has time to read during IBC and I’d prefer to party than spend my nights writing.

But I’d be keen to have any information or discussions on the topics above which I intend to cover in depth after the dust settles and I can actually think and analyse a bit. I’m also interested in publishing those blogs elsewhere, so let me know …

Oh yes, media accreditation means getting invited to more parties, which clearly counts on the upside, as long as I don’t think of the diet I’ll be going on as soon as I get home.