Beachfront - leaderboard - 7-1-18

Analysis for 'IPTV'

  • Unveiling Move Networks's New Strategy

    Move Networks, the well-funded Internet television technology company which has been virtually silent for the last 60 days since acquiring Inuk Networks and bumping former CEO John Edwards to Executive Chairman, is pursuing a major repositioning. Earlier this week I met with Marcus Liassides, Inuk's former CEO and founder who joined Move's management team, who previewed the company's new strategy to be a wholesale provider of IPTV video services delivered over open broadband networks.

    Broadband video industry participants know Move best for its proprietary adaptive bit rate (ABR) technology and player, which power super-high quality live and on-demand video streams for broadcasters like ABC and Fox. Move gained a lot of attention by raising over $67M, including a $46M Series C round in April '08 from blue chip investors.

    Despite all this, Marcus explained that coming into 2009 Move had at least 3 significant problems, symbolic of how fluid the broadband video market remains.

    First, its core business of charging content providers in the range of $.30/GB of video delivered was being pressured by the fact that advertising-only business models couldn't support this pricing. Content providers loved Move's quality; they just couldn't afford it, particularly given the alternative of plunging CDN delivery rates.

    Second, Move's pricing and business model were being challenged by both Microsoft and Adobe entering the market with ABR streaming features of their own (I wrote about this here). But because both were enabled on the server side (IIS and FMS respectively), the cost of ABR moved from content providers to CDNs, who might or might not choose to charge extra for these features. Either way, Move's direct cost looked comparatively more expensive, especially as the recession pounded ad spending.

    Last, but not least, Marcus explained that Move's product development approach was undisciplined, leading to resources being spread too thin in too many directions. That was reflected by the market's ongoing difficulty in categorizing which business Move was really in.

    Meanwhile, U.K.-based Inuk, which had been on its own funding and product development roller-coaster, was delivering its Freewire IPTV service to about 200K university students in the UK, Ireland and Canada. Because Inuk needed to serve these students when they were off campus, it had developed a "virtual set-top box" application that duplicates on the PC the IPTV service that had traditionally been delivered via an expensive IPTV set-top box. Inuk was using Move's ABR technology to power video delivery to the PC. Recognizing potential synergies and trying to address its other issues, Move acquired Inuk in April.

    Move's new positioning as a provider of IPTV video services delivered over open broadband networks essentially replicates what Inuk has been doing, except that going forward services will be offered wholesale, not retail like with Freewire. Move's strategy starts from the proposition that to get cable TV networks online requires that they be paid consistent with the norms, rather than expecting them to free and ad-supported only. It also anticipates that consumers demand not just VOD offerings, but a full linear lineup as well (as an aside, that aligns with Sezmi's thinking too). While Move will continue supporting existing customers like ABC and others, its new wholesale model is a major shift in that it uses the company's core technology to support packaged multichannel video services, instead of a la carte web-based video.

    Marcus explained that Move is targeting 3 verticals: (1) telcos which haven't traditionally offered video services (or have through direct satellite partnerships), (2) broadband ISPs looking to get into the video business, and (3) existing video service providers looking for a lightweight capex approach for extending their service either for remote access (a la "TV Everywhere") or in other rooms in the house (a model which has traditionally required another set-top box and truck roll for installation).

    Marcus demo'd the Freewire service to me using his PC and a large monitor, and it looks great. There's instant channel changing, HD (when available), a great looking guide and auto-DVR of every program, all in the cloud. Freewire also offers targeted advertising, and HTML-based apps like Twitter integration, etc. My caveat is that I have no idea how well the service would scale to millions of homes.

    Move's new positioning puts it in the middle of tectonic video industry shifts. For example, what's the appetite of 3rd parties like telcos and ISPs for new video solutions? Will other, well-suited consumer brands like Google, Netflix, Yahoo enter the multichannel video business, and if so how? What approach will cable operators like Comcast use for emerging, "TV Everywhere" services that would benefit from Move's lightweight capex model (note Comcast said it was using Move in its 5,000 subscriber technical trial yesterday)? How will major cable TV networks expect to get compensated in the broadband era where individuals, not homes, are the new unit of measurement? How will local ISPs, over whose networks remotely-accessed video will run, expect to be compensated? It's way too early to know the answers, but if Move's technology works as intended, and its costs are reasonable, it will likely find itself in the middle of a lot of very strategic industry discussions.

    Another big change is that Marcus said the company's messaging will be focused more around business cases and services than its specific technologies. That seems smart given giants like Microsoft and Adobe are closely circling these waters with lots of their own technology, which could easily swamp Move. If all this wasn't enough, Move is also in the midst of hiring a new CEO and implementing a new management team, all of which will be announced imminently. One thing Move isn't doing for now is raising additional capital, which Marcus said is not needed.

    What do you think? Post a comment now.

    (Note: Move Networks is a current sponsor of VideoNuze)

     
  • Microsoft Flexes Broadband Muscles at CES

    Microsoft grabbed the early PR spotlight at the Consumer Electronics Show (CES), now underway in Las Vegas, announcing a variety of deals across the broadband video spectrum. The deals, announced by Bill Gates in his traditional night 1 keynote, reinforce Microsoft's intentions to play multiple roles in what Gates calls the "first true Digital Decade."

    Here's a look at Microsoft's deals and why they matter:

    NBCU 2008 Olympics on MSN, using Silverlight

    Microsoft and NBC, which has the broadcast rights to the '08 Summer Games from Beijing, announced that MSN would be the exclusive partner for NBCOlympics.com including thousands of hours of live video coverage, and that Silverlight, which is Microsoft's "Flash-killer", would be used. As I mentioned in my "6 Predictions for 2008", the '08 games are going to be the biggest broadband video event yet. The deal gains MSN lots of traffic and Silverlight lots of exposure and downloads, not to mention serious validation as a live streaming platform if it executes well.

    ABC/Disney and MGM content on XBox LIVE

    In a further move to bolster the premium-quality content available in XBox LIVE (the content offering that accompanies XBox 360), Microsoft announced that both ABC/Disney and MGM would now be providing both SD and HD content. These moves bring XBox LIVE's catalog closer to parity with iTunes, while keeping up the competition with Amazon Unbox and other stores. Separately, Microsoft said that XBox racked up 17.7 million units sold during the '07 holiday season.(correction, Microsoft press release misstated this number. Holiday sales were actually 4.3 million units, bringing cumulative units sold to date to 17.7 million, thx Karl)

    XBox users have been remarkable active purchasers and downloaders using XBox LIVE, and previous briefings I've conducted with XBox executives suggest that the initiative has been particularly successful with HD. Since Xbox is purchased primarily as a gaming platform, it serves as a great Trojan horse opportunity for Microsoft to gain broadband access to the TV. Meanwhile, XBox LIVE has served as the deal unit for Zune's library as well, so these moves are important to watch as they benefit Microsoft's efforts to dislodge iPod from its perch as the leading digital media player. Only disappointment here is no ad-supported counterpart was announced for ABC programs, leaving AOL as ABC's only announced broadband syndication partner, as best I can tell.

    BT and XBox 360 Integration

    Microsoft leveraged Xbox 360 for another convergence play, announcing with BT that the company's "BT Vision" IPTV service would be available for XBox 360 owners as an integrated service offering. This means that no separate set-top box would be required for BT Vision subs. Though the box won't roll out until mid '08, this concept has compelling upside for both sides and could be a nice blueprint for future IPTV deals. It eliminates set-top capex for BT, while providing strong marketing benefits to both parties, helping drive broadband/TV convergence on the back of the popular XBox gaming console.

    Showtime, TNT and CNN with new apps on Mediaroom, Samsung supporting Extender

    Elsewhere, Microsoft announced that Showtime, TNT and CNN would be creating new apps for Microsoft's Mediaroom IPTV platform, which it says is now installed on 1M set-tops globally. And lastly, that Samsung will support Extender for Windows Media Center, which means that HD content can be sent over wired or wireless-N networks from PC to TV. Extender hasn't caught on yet, but Microsoft is continuing to push it as a bridge device. I've yet to test it, but have that on my list of to-do's.

    Taken together, these announcements from Microsoft show the company's vast resources allow it to play a role in all aspects of the broadband era - software, devices, services, content, gaming, etc. Less pronounced in these deals was the company's recently added online advertising prowess, which will soon be applied to broadband video as well. Stay tuned for news on this front as '08 unfolds.

     
  • Broadband Video vs. IPTV, The Differences Do Matter

    It's funny how often I'll be talking to someone and they will casually start interchanging the terms "IPTV" and "broadband video/online video/Internet TV".

    The fact that many people, including some that are actually well-informed, continue doing so is a reminder of how nascent these delivery platforms still are, and how common terms of use and understandings have yet to be established.

    Yet it's important to clarify that there are differences and they do matter. While some of the backend IP transport technology is common between IPTV and broadband video, the front end technology, business models and content approaches are quite different.

    In presentations I do, I distinguish that, to me at least, "IPTV" refers to the video rollouts now being pursued by large telcos (AT&T, etc.) here in the U.S. and internationally. These use IPTV-enabled set-top boxes which deliver video as IP packets right to the box, where they are converted to analog video to be visible to the viewer. IPTV set tops have more capabilities and features than traditional MPEG set-tops, and telcos are trying this as a point of differentiation.

    However, at a fundamental level, receiving IPTV-based video service is akin to subscribing to traditional cable TV - there are still multi-channel tiers the consumer subscribes to. And IPTV is a closed "walled garden" paradigm - video only gets onto the box if a "carriage" deal has been signed with the service provider (AT&T, etc.). IPTV can be viewed as an evolutionary, next-gen technology upgrade to existing video distribution business models.

    On the other hand, broadband video/online video/Internet TV (whatever term you prefer) is more of a revolutionary approach because it is an "open" model, just like the Internet itself. In the broadband world, there's no set-top box "control point" governing what's accessible by consumers. As with the Internet, anyone can post video, define a URL and quickly have video available to anyone with a broadband connection.

    The catch is that today, displaying broadband-delivered video on a TV set is not straightforward, because most TVs are not connected to a broadband network. There are many solutions trying to solve this problem such as AppleTV, Microsoft Media Extender, Xbox, Internet-enabled TVs from Sony and others, networked TiVo boxes, etc. Each has its pros and cons, and while I believe eventually watching broadband video on your TV will be easy, that day is still some time off.

    Many people ask, "Which approach will win?" My standard reply is there won't be a "winner take all" ending. Some people will always prefer the traditional multichannel subscription approach (IPTV or otherwise), while others will enjoy the flexibility and features broadband's model offers. However, for those in the traditional video world, it's important to recognize that over time broadband is certainly going to encroach on their successful models. Signs of change are all around us, and many content companies are now seizing on broadband as the next great medium.
     
    UPDATE: Mark Ellison, who is the SVP of Business Affaris and General Counsel at the NRTC (National Rural Telecommunications Cooperative, an organization which delivers telecom solutions to rural utilities) emailed to clarify that it's not just LARGE telcos that are pursuing IPTV, but many SMALLER ones as well. Point well taken Mark, it was an oversight to suggest that IPTV is solely the province of large telcos like AT&T.
     
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