IPTV: “customers are confused, regulation is a mess, and technical standards confusing”

A few weeks ago I attended the Westminster eForum on “IPTV connected televisions and future set-top box: addressing the technical challenges“, mainly because its an area of interest for a project I work on (Omelette) but also as it touches on work in W3C and elsewhere.

I think the main thing I took away from the event was how similar the issues and thinking were in IPTV were to the early efforts at bringing together the internet and mobile phones: the same concern with securing and monetizing content, considering users as “consumers” of content, and focussing the whole experience through the lens of a single company-consumer relationship (this is the operator in the mobile case, cable or satellite provider in the IPTV case). It could be argued that things only got interesting in web for mobile when we had the twin disruptions of the iPhone and Android. Both of which came from a web-centric rather than telco-centric perspective.

So it was with the IPTV briefing. We had several companies presenting the view that “consumers should not have to configure a router” which then extends to “we want a walled garden” where you only get the web video services that your operator or subscription service has bundled for you.

I can where see some of the arguments for this. For one thing, there is an issue that different regulatory frameworks apply to “linear” (i.e. programmed broadcast), “non-linear” (on-demand services) and “over the top” (video streamed not from a broadcaster, but from the web) content.

Another issue is where users go to get support when the various bits of their home network won’t talk to each other, or where they lose content or can’t get access to content they’ve paid for. Having a single “walled garden” with a single customer-provider relationships makes this much easier.

However, several presenters at the event were already thinking that whether a walled garden is desirable or not is irrelevant – it can’t exist. For example, Juan Herrera Gutierrez-Cortines from Alcatel-Lucent made the point that IPTV is already a complex aggregation of interacting applications, not a single platform. In contrast with the “consumer” viewpoint, he also identified the key drivers for IPTV will be “bringing the content and the conversation together” and “removing barriers between devices and content”.  Christopher Schouten from Irdeto also pointed to piracy as something worth learning from – sometimes piracy is not about is getting content for free, but creating better, more customised experiences. Schouten saw IPTV users wanting to create an IPTV experience that is “flexible, interactive, personal, portable, [and] social”.

But the question is not what might happen, but what will happen, and by when. Right now, the operation of IPTV is governed not by one standards organisation, but a range of consortia with some overlapping memberships: DTG, Ultra Violet, YouView, DLNA and so on. This presents a problem for innovation as these are principally closed consortia – while anyone can pay (often very large fees) to become a member, the work is typically done in private. (In one case, you can only read the specification is you sign an NDA).  This means that its largely the existing TV companies – cable operators, set-top box manufacturers, content providers, and rights management companies – talking to each other without input from participants in the wider web ecosystem.

But a larger problem with this situation is that its a FRAND-heavy world. Many of the core standards these consortia build upon rely on cross-licensing and royalty payments, e.g. MPEG. This makes it much harder to bring open source solutions into the picture and get them interoperating with the most important TV properties. In HTML5, this lead to the infamous codec licensing issue, where some codecs cause problems for open source browsers (there’s a good post on Mozilla’s issues with H.264 here). However, for HTML5 we had Google promoting an open codec, and 3 out of the 5 main web browsers are based on open source anyway, so there was plenty of reasons to try to sort out the mess, which everyone concerned found pretty embarassing. I don’t see a similar situation in IPTV right now.

What is slightly worrying is that while W3C has a Web and TV group, and has called for open standards in Internet TV, this seems to have had little impact so far with the core constituency of TV companies, and didn’t really get a mention from speakers at this event.

This doesn’t mean its not possible for open source to disrupt the IPTV market – for example Android typically has to be bundled with some closed-source low level libraries that support FRAND-licensed technologies to run on most operator networks. The same may be possible with IPTV – and there has been some speculation lately that the Google purchase of Motorola may in fact be more about its set-top box business than mobile.

However, perhaps the biggest hurdle to opening up IPTV – or converging TV and web generally – is the issue of content rights. Its quite telling in its own way that the majority of talks at the seminar were about content security in one form or another. While there was some interesting discussion of alternative business models, overall the largest growth in TV income has come from paid subscriptions for content, typically delivered as channel bundles. There doesn’t seem to be much appetite for the “a la carte” licensing of individual programmes which Abe Peled of BDS described as both too expensive to manage, and would also tend to drown out programmes that rely on cross-subsidy to be viable. So the content providers would tend to see channel subscriptions and pay TV as the core of their future business, perhaps more so even than advertising.

This puts another constraint on the IPTV ecosystem, as content providers would want to ensure that their subscriptions are protected, which means the whole setup – from the broadband connection through to phones, tablets and laptops as well as TVs – support its method for decrypting channels based on subscriptions. Getting “free” content onto browsers (BBC iPlayer, or 4oD) has already proved problematic – again, issues around codec support and licensing, and regional licensing restrictions – but is relatively simple compared to subscriber content.

In conclusion, I think in the near term we’re going to see more of the same from the IPTV world – fragmented standards, confusing products, and much political lobbying . (The quote in the title, by the way, is from a tweet made by Tim Bradshaw of the Financial Times, who was chairing the first session!) However in the long term, convergence of the TV and the web is inevitable, and if telco is an example to go by, the web will always come out on top.

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