Viodi View – 09/20/13

Traveling half way round the world is always a great way to get a different viewpoint. One can read about things or watch a video, but these activities are never the same as being there and interacting with people face-to-face. Thousands of attendees from broadcasters to cable operators and all the vendors necessary to capture, produce and distribute video from lens to eyeball packed this past week’s 2013 International Broadcast Conference, in Amsterdam. It was a great place to get a high-definition vision of the future.

The Dawn of Ultra HD

An image of Amsterdam, home of the IBC.
Click to view

The dawn of Ultra HD is upon us and the slow sunset of HD has begun was an underlying theme to the 2013 IBC show. Ultra HD, also known as 4k, was everywhere at this world-renowned video and broadcast industry. From production equipment to post production to transport to displays, all the elements are in place for Ultra HD to take-off.

Click here to read more and to watch the video.

Fiber Network Powering Broadband & Now Video

Image of fiber being pulled for United Electric.
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The juxtaposition of a fiber optic cable on a dirt road paints the picture of many parts of rural America and glimpses of the stark contrast in infrastructures can be seen in the above video. With 1,300 miles of recently deployed fiber and an average of 2.5 customers per mile, United Electric Cooperative is providing broadband to its formerly unserved members. Sparked by a $21.2M RUS broadband stimulus award, United Electric continues to turn-up new customers.

Click here to read more and to watch the video.

Some Tweets and Short Thoughts:

  •  I can think of some interesting service provider apps for this type of device. Don’t fret, me singing isn’t one of them.
  • The next generation of #livesports? Selling out the Staples Center in an hour is impressive & the $1M prize significant.
  • So, it looks like Comcast does not include a battery with a cable/telephony modem (presumably upgraded to DOCSIS 3.0); batteries are an extra $35 charge. They let the consumer choose whether he has battery back-up.  Will know more in 4 to 6 weeks when my shiny new modem arrives. Amazing that the CPUC approved a battery free telephony modem.

The Korner – The Jet Set VOD Service

Fingerprint Identification for identifying a given viewer.
Fingerprint ID for ordering VOD movies.

One of the oft-discussed points at IBC 2013 was the potential for Ultra HD as a way to drive early theatrical releases. Of course, this would require extremely robust security and, probably, per stream watermarking. As importantly, there is the business issue of studios not wanting to cannibalize their theatrical release window revenue (e.g. Movie Theater owners want to protect their revenue stream).

The conversations about early theatrical release reminded me of an interview from earlier this year that, some of you may have already seen on one of the convention hotel channels where ViodiTV has appeared in 2013. Ultra HD would make a compelling delivery mechanism for this early release.

Jason Peng’s company, PRIMA Cinema, has identified a market segment that could become significant new source of revenue to the studios, while barely impacting their existing streams.  Based on Peng’s per movie revenue and market size projections, the total revenue for targeting the “jet owner” crowd has the potential to be in the hundreds of millions.

PRIMA Cinema is already delivering its $35,000 set-top and $500 per title “better than Blu-Ray” movies, so it wouldn’t be surprising if they are one of the first ones out with an Ultra HD offering to the consumer. This interview and the screenshots from their demonstration, provide a glimpse of another world; a world that may be more foreign to the average Joe than is another country half way round the world.

Click here to read more and to view the video.

Multi-Screen Video Content and OTT Partnerships Enabled by New Video Network Architectures – Part 2 of 2


This is the second of a 2 part article on the 2013 OTTCON.  The first article looked at how Pay TV providers could offer OTT content on second screen devices and also how OTT and local providers (Pay TV or ISPs) could partner together to offer OTT content to subscribers.  This second article examines how video network infrastructures need to evolve to support both Pay TV and OTT content.

Video Network Architectures:

With live linear, Video on Demand (VoD) and now OTT content, delivery of multiple concurrent video services has become increasingly complex for pay TV service providers.  Nonetheless, providing access to quality video must remain a core competency of Service Providers (SP), else they’ll lose customers to competing offerings.   With the amount of content available today, SPs’ network infrastructures need to be able to handle network capacity issues in order to seamlessly deliver video content from the cloud to TVs, PCs and mobile devices.  That could involve costly network investments.

Service providers not only need to expand the accessibility of quality content to new screens, but they need to do this while meeting consumers’ expectations of a seamless content viewing experience when switching from one type of video to the other.  Quality of Service (QoS) will have a very strong impact on viewer engagement.

Content protection is another top concern for SPs.  It preserves content revenues among their subscriber base. Ensuring that only authorized subscribers access certain content can be difficult, especially with the expansion of viewing platforms. It is critical that video SPs  address content security, entitlements and authorization.

As viewing continues to increase on new screens and platforms, multi-screen services will continue to be a priority. The various screens will require different video formats that need to be well-managed and secure to provide a seamless ‘video anywhere’ experience.

All of the above factors will require new video architectures with enhanced hardware and software platforms needed to deliver OTT content.  A high level view of an OTT architecture (courtesy of Discretix) is shown below.  The figure does not include 3G/4G wireless access to OTT content because almost all mobile devices will access OTT content via an in-home WiFi network which connects to a Residential Gateway.

A depiction of the complicated architecture of multiscreen video.
Image Courtesy of Discretix

A more comprehensive video network architecture was described by Microsoft and Alcatel-Lucent in a 2013 OTTCON session titled, “Strategies of Unlocking Additional Values from OTT.”  That session was directed at existing Pay TV SPs that wanted to deliver OTT content along with their existing linear and video on demand (VoD) programming.

OTT value creation was said to have three underlieing pillars:

  • Integrated TV platform across experiences and devices
  • Build OTT experiences tied to core TV proposition
  • Web analytics and Internet speed applied to TV

The figure below depicts how a SP video network could adapt to support OTT content delivery.  Among the key network functions are:

  • Redistribute STB functions to CE/clients and the home network
  • A highly distributed Content Delivery Network (CDN)* for uni-cast scaling and multi-cast video (which has been demonstrated by Ericsson)
  • Session based personalization to create new value for consumers, content owners and advertisers
  • Agile back office architecture to launch and evolve services cost-effectively

*A CDN is a large distributed system of servers deployed in multiple data centers across the Internet.  It provides lower latency content services to end-users with higher availability and performance than the “best effort” Internet

Image depicting what needs to be done to adapt to HAS and Internet control.
Image courtesy of Alcatel Lucent & Microsoft


The Unified Video Network illustration below shows unified content distribution, distributed caching (of video content) and re-purposed video servers to permit SPs to reuse existing assets.

Image depicting a unified video delivery network.
Image courtesy of Alcatel Lucent and Microsoft

Personalization in the core SP network is shown in the figure below.

An image depicting what needs to be done in the core network to enable personalization.
Image courtesy of Alcatel Lucent and Microsoft

Microsoft’s Media Room* was said to be the market leading IPTV software platform with 50 deployments in 23 countries, including AT&T (U.S), Deutsche Telekom (Germany), and Sonus (Canada).  Alcatel -Lucent claims to be number one in video network and systems integration with 30 network operators using their equipment, according to the company.

Microsoft and Alcatel-Lucent platforms are used by AT&T U-Verse which announced second screen video content delivery last July, but has yet to make it available (as noted in the comments directly below the Part I article.

*Editor’s Note: It will be interesting to see what happens with Alcatel – Lucent’s ability to resell/integrate Mediaroom if the rumors prove true that Alcatel Lucent rival Ericsson will acquire the Mediaroom platform from Microsoft.


While not participating in OTTCON, Chinese telecom equipment vendors ZTE and Huawei also have a well-established role in the IPTV market, based on strong and growing IPTV platforms within China (e.g. China Telecom).

“There is a strong split in the IPTV middleware market between system integrators providing an entire solution and specialists in applications and customer experience,” according to Sam Rosen, ABI Research practice director for TV & video. “With the exception of Cisco, who recently purchased NDS, the system integrator’s role in customer experience will likely decline over the next few years; instead, this role will be left to client-centric middleware companies with better user experience,” added Rosen. The analyst stated that Viaccess-Orca (a subsidiary of France Telecom), Netgem and others, each have their own unique philosophy on how to create an IPTV system. ABI Research forecasts that IPTV households will grow from 80 million in 2012 to 117 million in 2017, with growth driven by Asia-Pacific.

Multi-Screen Video Content and OTT Partnerships Enabled by New Video Network Architectures – Part 1 of 2


This article covers two types of sessions from the content rich OTTCON 2013, held March 19-20, 2013 in Santa Clara, CA:

  1. Second Screen Video from mainstream pay TV service providers OR via a partnership between an OTT network provider and local service provider (telco or cableco).
  2. Video Network Architectures that facilitate OTT video for second screens, smart TVs (with Internet connections), game players, OTT boxes that connect to TVs, etc.

The first article published on the excellent OTTCON 2013 addressed emerging technologies for next generation video.(

Second Screen Video Content delivered by pay TV Service Providers :

Until now, second screen apps for mobile devices have been used primarily for searching, browsing and selecting content for the first screen (TV).   Examples include looking up information about a particular TV program, a movie review, actor bios, related programs, use as a remote control device, etc. There has not been too much OTT content being watched on those second screens, even though most pay TV customers have free access to “TV everywhere” from their pay TV service provider. Some may also have access to Hulu, Netflix, etc but don’t watch those much on second screens either (they use either game players or dedicated boxes like the one from Roku).  But in the future, there are other possible uses of the second screen such as social TV and watching pay TV/OTT video content from a service provider.

“Second-screen devices such as tablets, smartphones and ultrabooks are likely to be the principal force behind social TV experiences as companion apps are increasingly written for that experience,” said Michael Gartenberg, research director at Gartner Group. “A combination of content integration, social interaction and loyalty programs are the key activities that will make up the social TV experience.”

Long-term efforts to connect traditional TV broadcasts to the Internet have largely been limited to either content companion websites or connected devices such as smart TVs, video format converter and set-top boxes.  None of these approaches has led to the creation of interactivity or a social networking type of viewing experience for consumers. Or watching OTT video programming from their pay TV service provider.

One company thinks that will change in a big way! Speaking at 2013 OTTCON in Santa Clara, CA, Alan Hoff, VP of Strategic Marketing at SeaChange said that MSOs/Cablecos and Telcos would soon be delivering multi-screen TV services; and it will not be just the largest service providers (SPs), either. Concerned about disintermediation from OTT players, multi-screen TV was said to be “in the sights of every (pay TV) service provider.” It addresses the OTT provider threat (think “cord cutting” or “cord-trimming”), while capitalizing on the IP and web technologies that may providers are now using to deliver video content to TVs (e.g. AT&T’s U-Verse network uses IPTV technology while Comcast uses a managed IP network to control VoD delivery).

Second screen video will provide SPs with new opportunities in long time content owner relationships. Advertisers were said to favor second screen video because of its interactivity capability. The Diffusion Group forecasts 2017 tablet video viewing (as a second screen) to be significantly greater than all the on-line/OTT viewing in 2011, in terms of total hours watched (58B hours versus 38B hours, respectively).

Several examples of collaboration between OTT providers and video SPs were given:

  • Virgin Media (UK) is offering YouTube and BBC iPlayer.
  • A Time Warner Cable app is being distributed on by Roku for use on their box that plays OTT content on TVs via HDMI cable connection.
  • Com Hem (Sweden) is combining OTT content with its linear, on-demand, and catch-up TV services.

Service provider/OTT integration examples were said to span all network operator types –cable, telco, mobile, and satellite. Superior reliability, quality of user experience, simplicity of a seamless experience, and presentation across multiple devices were the benefits to be realized, according to Mr Hoff.

Distribution of OTT content by SPs could be via: the on-demand program listings, local distribution of specialized content, or a pay TV event (e.g. VOOmotion+ created a pay per view offering for Belgian Premiere League Football).

+  VOOmotion is an innovative multi-screen video service offered by cableco VOO in Belgium. Launched in December 2012 and now available to VOO’s triple-play customers across Belgium, VOOmotion is founded on SeaChange’s Adrenalin video platform and Nitro subscriber experience software.

Summing up, Mr. Hoff stated that:
  • Service providers‘ multi-screen expansion will bring in a huge audience.
  • Think of the multi-screen platform as a brand-builder for the SP as an OTT content distributor.
  • The lines of video consumption are blurring: OTT needs to be everywhere, and “SP multi-screen is prime real estate!”

“You have to follow the video consumers.  They’re on the move and they’re using more and more devices to watch video content,” said Hoff.  “Blended content services are the key to consumer satisfaction and video service providers are in hot pursuit with their high QoS multi-screen offerings.  Ultimately, they’ll coalesce everything consumers desire into one convenient source and a powerful brand association for OTT providers,” he added.

OTT Content delivered by Partnership between OTT Provider and Local Service Provider:

Evegent slide 8 depicting role of local service providers.
Image courtesy of Evergent

In a related 2013 OTTCON session titled, “What does it take to be a global OTT Service Provider,” Evergent CEO Vijay Sajja said, “the opportunity exists for an OTT service that combines local LiveTV channels and premium VOD content.”  One method of achieving that vision is for an OTT provider to partner with a local pay TV service provider.   There’s also the possibility of the OTT player partnering with an ISP to deliver higher quality OTT content to (mobile and wire-line) Internet subscribers. Both types of OTT-Local Provider partnering are illustrated in the adjacent figure on the right.

High level slide depicting elements necessary to create a successful multiscreen service.
Image courtesy of Evergent

Note: In addition to this excellent presentation, Evergent showcased their OTT Subscriber Billing and Royalty Tracking software systems at 2013 OTTCON.

Among the key challenges for such a B2B2C (Business-to-Business-to-Consumer) partnership are: support for multiple devices, languages and payment methods; easy sign-up/service ordering/provisioning; video player integration; customer account management; customer care; and fraud alerts.  Key high level elements of an OTT solution is shown in the adjacent figure on the right.

Evergent slide depicting how service provider could offer OTT content.
Image courtesy of Evergent

For an effective partnership, the biggest issue is back office and systems integration between the OTT provider and local Service Provider (pay TV or ISP).  Integration of call centers will also be important for rapid problem diagnosis and repair. The functionality required for all such integration is depicted in the adjacent figure on the left.

Stay tuned for part 2 of this article which will examine the architecture of video networks that make multi-screen video  (and other OTT environments) possible.

OTT movies equal VOD with more gardens to pick from

rog-tv-ott-720Sometimes I think about keeping thoughts to myself as they often conflict with what people want to hear or contradict what they believe and then I feel bad and then it happens and then the cycle repeats

So here we are at the refresh of another cycle. I’m about to feel bad. Over-the-top progressed faster than I thought and gave more options than I thought, but now I think OTT has done better than VOD because it offers more options, probably did a better job marketing, and will likely dominate in the future because of its options. To me OTT movies are simply VOD out of someone elses garden but I have a vehicle driving me to many more gardens to pick from.

So what got me thinking about this cycle? Well, I finally got a Roku box which I thought would stop me from plugging my PC into the TV, but it didn’t. Next I read that people think VOD is losing out to OTT because it has inadequate advertising support and awkward program guides. This was in a report summary sent out by TDG recently and repeated by many others…. Market Watch, Broadband and TV News, Marketwire, WCBSTV, etc.

Yes, I’ve been told that I’m not reading between the lines of the summary and it’s really about cable operators losing a market they should have controlled. So perhaps, yes, VOD should have done better, but how can it compete against all the options.

  • Roku gives me the option to pay a monthly fee for Netflix, or to rent by the movie from Amazon, or to watch for free on the Crackle channel with advertisements. Those are only 3 options out of many more options.
  • Playstation, Wii, and xBox give me many of the same options as Roku and at the same time provide entertaining game that are owned by perhaps 3 or 4 times as many people that have VOD boxes. I have all 3.
  • I can still plug my PC into the TV and rent YouTube movies or watch for free with a commercial. I often go to YouTube for free movies because I prefer the one opening commercial to Crackle’s one every 15 or 20 minutes.
  • And there are more media players out there with similar options that I won’t even get started on.

So why would VOD dominate the movie watching world? I just don’t see it… or should I say watch it.

Now please don’t be offended it you’re a VOD provider or supporter. This is just the way I look at things and I’m an older baby boomer. I’m not the one to watch out for like x, y, z generation that will decide how this plays out. The younger generations are way more exposed to this stuff than this atypical bb gen’r but a lot of operators recognize this as they focus on broadband so the future is looking brighter for options.

Broadband Wireless and the Connected Home: Telecom Council Meeting Review


This article covers the wireless networking aspects of the Connected Home – both inside and out. It is primarily based on the Telecom Council’s[1] May 14, 2009 meeting titled, “The Connected Home: Services and Models.” Trends in delivery of multiple residential services, mobile broadband, home networking, and remote access to the connected home are examined. We also highlight a few related news items from Sling Media (now Echo Star) and Motorola. 

In advance of the meeting, the Telecom Council published the following statement:   "The PC, the TV, the Internet and the home are converging in a very real way. Real products launched into the market don’t just blur the lines between TV and PC, but in fact make it increasingly clear that any screen is fair game for any content, and the service will come from both broadcast, uni-cast, and from within the home. Of course, screens and media are just a part of the Connected Home. Media sharing, photo display, home security, fixed phones, cameras, HVAC control, entry control, family organization and communication, are all becoming inextricably entwined."

While we are skeptical that all the consumer electronics in the home will be connected to each other any time soon, we were aware that mobile devices are now remotely accessing TVs (Sling Box), and will soon be accessing video content on DVRs, and videos/photos/ images stored on a home based file server.   This trend will likely accelerate with the growth of mobile broadband networks.
Presentations and Discussion
Gabriel Sidhom, CTO of Orange Labs (South San Francisco) and VP Technology for France Telecom R&D provided Orange/FT’s perspective on delivering multiple services to the home via an integrated IP network. Orange/FT provides fixed and mobile telecom services in France, U.K., Spain, Poland, Africa and the Middle East. They see mobile broadband and IPTV growing at annual rates of 70% and 66% respectively in the countries where they provide services. 
A key point is that broadband growth is coming from services- both triple- play to the home, mobile data and video.
Rob Hull, Vice President – Business Development, British Telecom offered his views on “The Mass Market Digital Home.” Rob shared what BT had learned from the video services (e.g. broadcast digital video, VoD and PVR) they provide to residential customers:
  1. The mass market is considerably behind the early adopters.
  2. Selling the concept is harder then selling the box (e.g. STB).
  3. Customers expect SPs to provide excellent customer service.
  4. Don’t try to pre-empt what customer’s want.
Mr. Hull listed several requirements for Digital Home 2.0:
  • Access networks with sufficient speed to support all the equipment/ devices in the networked home
  • High speed home network coverage for the entire home (wireless repeaters may be needed for large home networks
  • Ubiquitous access to content: in-home on different devices; outside of the home
  • Monitoring services: energy, people, home security
  • Easy to set up and manage (considered critically important for success)
  • Inexpensive enough for mass market adoption
Gary Iosbaker, Distinguished Technologist, Hewlett Packard presented his company’s strategy and vision for the connected home and remote access to it.   A few very important industry trends:
  • Broadband communications has gained critical mass
  • On-line content is exploding
  • Communications and entertainment services are converging
  • Home networks are growing in number and in connected equipment devices
  • Mobile Internet- independent of access technology and devices
  • Mass customization will be required
  • Centralized home storage and connected devices will enable sharing of content and services from within or outside the home (eventually from anywhere there is an end to end broadband connection).
  • Uploads of photos, multi-media images, and videos will continue to grow very rapidly (placing new demands on upstream bandwidth)
  • New services will be created for uploading and downloading user content to/from the connected home.
Mr. Iosbaker made what was perhaps the most interesting remark during this Telecom Council meeting: remote users will access home digital storage via broadband wireless networks– on their smart phones, new gadgets, and/or notebook and netbook PCs.  Mobile WiMAX and LTE were seen driving this capability to access any home information from anywhere. 
This capability exists now to some degree with Slingbox remote TV access (see What’s New With Sling below). I’ve heard that a few “geek-like” users had a home network set-up whereby they were able to remotely view pre-recorded TV programs on a DVR from their mobile phones or notebook/ netbooks.
Chris Dobrec, Senior Director – Strategy & Business Development, Cisco talked about home networks and consumer networking gear. Home networking and entertainment has become a $3.5B business for Cisco, with their acquisitions of Linksys (WiFi routers) and Scientific Atlanta (STB). The company has announced several additional networked consumer electronics initiatives at the CES earlier this year and is advertising this theme on popular media like TV commercials . 
Mr. Dobrec sees a “media enabled home,” with many connected devices and equipment. These include: TVs, DVRs, PCs, game consoles, smart phones, networked audio, MP3 players, storage devices, media servers, IP cameras, and other gadgets. He says that the average number of devices on a home network is approaching a half dozen in broadband homes.  But early adopters have many more than that. Chris thinks of himself as a Home Network CTO.  He has 18 devices on his home network!
According to Mr. Dobrec, the devices and equipment on a home network will not only share a broadband wide area connection (as they do now via WiFi), but also they will also connect with one another. Can this really happen with the proliferation of home networking technologies? Chris says yes and Cisco will make it real! He indicated that Cisco is making home network converter boxes that have the capabilities of multi-protocol home network PHY and DL layer translation and routing. They plan to support Ethernet over twisted pair, WiFi (including 802.11n), HPNA, MoCA (Multimedia over Coax Alliance), and BoPL (Broadband over Power Lines). Not all the technologies will be available in the same converter box, but some of these boxes are now available and being sold.
In conjunction with their Clearwire partnership, Cisco is developing Mobile WiMAX/ Wi-Fi devices that extend its Linksys line of home network routers. The devices, expected later this year for the CLEAR 4G Mobile WiMAX service, will be marketed to consumers, small office/home office, and small-to-midsize business users. We now expect those devices will essentially be WiFi to USB converters that require an external WiMAX modem or USB dongle to access the CLEAR network. We hope they will soon contain an integrated WiMAX radio and air interface.
What’s New With Sling?
No discussion about broadband access for the connected home would be complete without examining the Sling Box. For the last five years, this device, has allowed users to pipe all their existing cable and satellite TV channels onto the Internet and then to any computer or smart phone with a broadband connection.   In 2007, Sling Media was quietly acquired by satellite TV company EchoStar. Soon thereafter, Echostar split itself into two public companies: the Dish Networks for consumer TV business, and the Echostar Corporation, which owns Sling and is devoted to developing and licensing digital equipment for the television industry.
Sling also offers cable and satellite companies an easy way to get television to a variety of mobile devices without having to develop specific video services for each. Sling recently released a $29.99 application for the Apple iPhone, for example, although AT&T insisted that it work only over WiFi, and not over the carrier’s 3G network. AT&T said it feared that Sling’s streaming video could hog its bandwidth and lead to dropped calls.
This summer, Dish Networks plans to offer a set-top box embedded with Sling’s features to its 14 million subscribers across the country. Called the Sling Loaded HD DVR ViP 922, it will be offered to subscribers for $199.   Later, EchoStar plans to license Sling technology to other satellite and cable TV operators and consumer electronics companies. If successful, the concept of “place shifting” or “Slinging” shows to any device or PC could become a standard feature of most high-end cable TV set top boxes.
For more on this topic, please see:

Slipstream: From TV to the Web to Your Phone

Motorola enters embedded consumer device market with broadband wireless data cards

Manufacturers looking to take advantage of the increased speeds offered by 3G and 4G mobile broadband wireless networks such as WiMAX, HSPA and LTE can soon add off the shelf Motorola PCIe data cards into their notebooks, netbooks, portable gaming devices and other networked consumer electronics.
Motorola sees embedded wireless as a potential goldmine down the road. According to research firm Strategy Analytics, there will be 100 million devices with 3G or 4G technology embedded in them by 2014.
Gary Koerper, vice president of engine systems for Motorola Mobile Devices had a lot to say about Motorola’s new opportunity: "We see wireless broadband in consumer electronics being a tremendous growth opportunity not just for Motorola, but for the entire industry, In the next five to seven years everything you own will be connected to the Internet. As operators continue to deploy higher speed wireless networks to accommodate for growing consumer demand for mobility, there are opportunities for manufacturers and operators to roll out a wide range of low-power consumer electronics to enhance today’s mobile lifestyles. We look forward to working with the leaders in the wireless broadband ecosystem to incorporate high-speed broadband into more devices."
A variety of circuit cards will be offered:
  • The Motorola WTM1100 is an IEEE 802.16e Wave 2 compliant, single-band Half Mini-PCIe wireless network adapter that operates in the 2.5 GHz or 3.5 GHz spectrum for WiMAX connectivity.
  • The Motorola HTM1000, a 3G/2G HSPA, EDGE and GPRS Half Mini-PCIe WWAN adapter that supports HSPA data rates up to 10.1 Mbps downlink and 5.76 Mbps uplink.
  • The Motorola offers the LTM1000 single-mode LTE card, which is capable of speeds up to 100Mbps downlink and 50Mbps uplink. All three products conform to the PCIe revision 1.2 standard. 
For more information, please see this press release:
Home networking with broadband Internet access should be a major growth area in the converged world of computing, communications and entertainment.  We can expect to see lots more innovation in the connected home and remote (especially mobile) access to it. But first we need media and storage servers to be present in home networks and web addressable as if they were a web server on the Internet. Watch HP for new technology in this area. 
The idea of multi-protocol home network routers is very enticing, given the plethora of home networking wireless and wire-line standards (WiFi, Ethernet, MoCA, BoPL, etc). We expect Cisco to be the leader in this market segment. 
Keep your eye on Sling technology being embedded in new set top boxes and mobile applications for smart phones.  It will be interesting to see if EchoStar can successfully license their technology to other satellite, cable TV, or telco video providers.
Finally, we expect Motorola’s new wireless PCIe data cards to accelerate time to market for many new mobile and wireless devices for consumers.

[1] The Telecom Council ( meets regularly to discuss key business issues for telecom decision makers. Carriers and their venture capital divisions located in Silicon Valley are the principal members (the Council was formerly known as the Service Provider Forum).


Positive Signs and Positive Cashflow from One Telco

Jeff Gardner, President and CEO of Windstream Communications, opened his keynote speech at U.S. Telecom’s Executive Business Forum with a note of appreciation to US Telecom for getting behind what he termed, “credit stabilization legislation.” These opening comments set the theme for his talk, which was primarily about the financial condition of his company. In doing so, he provided insight into Windstream’s thoughts on the basic business, but also on topics such as wireless and IPTV.

Gardner spoke of the transformation of Windstream Communications from a telephony-based to a broadband-centric company. As proof points, he cited metrics that showed growth in broadband customers from 81k to 934k from 2002 to present. Revenues have increased from $3.1 to $3.21 billion in that same period, which is remarkable given the ongoing voice line loss of approximately 5% per year.

Windstream was born out of a merger of Alltel’s wireline properties together with those of VALOR Communications and instantly became a top-ten telco. It is primarily a rural and suburban carrier with about 20 access lines per mile. Still, they are facing strong competition, particularly in their suburban areas, as evidenced by the fact that 50 to 55% of their markets have voice competitors and 80% of their markets have broadband competitors.

Despite this, OIBDA (Operating Income Before Depreciation and Amortization) is at 53% and Gardner indicated that the dividend was safe and, at the time of his speech, was yielding 9%. He indicated that only 15% of Windstream’s revenue results from regulation (e.g. High Cost Fund, Switched Access, etc.).

Gardner said that there are multiple secrets to Windstream’s success, including aggressive marketing at the local level. Windstream staffs at the local level and targets its marketing efforts to particular markets, as opposed to one-size-fits-all, national programs.

They are expanding distribution channels as well and are finding success in marketing to MDUs – some of Windstream’s college towns have 30 to 40% of their residences located in MDUs. Approximately 10% of their sales are coming from retail channels. Gardner suggested that they are making big investments in their save desk; they have saved some 50% of customers who were about to defect to a competitor.

He spoke of the importance of offering products that customers want. As an example, they created an offering called Greenstreak; which is targeted at those people who are wireless-only customers. Greenstreak is a broadband product which provides a metered voice line (primarily for emergencies). They have not seen cannibalization of revenue from higher priced tiers as they have carefully targeted this offering.

One of the offerings Windstream won’t be providing anytime soon is wireless, especially as an MVNO. Gardner, who has 20+ years of wireless experience, said that Windstream could not see a path to profitability for a wireless offering. He said it was very difficult, if not impossible, for a rural telco to be competitive in the wireless space.

He had similar thoughts about building out a traditional IPTV infrastructure and IPTV does not appear to be in their video plans in the near-term. With that in mind, he is very pleased with the performance of their digital video offering via their partnership with Echostar/DishTV and called it a long-term strategy. He said that they are paid in the millions of dollars per quarter in upfront commissions, plus ongoing fee for billing and collections for their 231k video subscribers.

When asked who owns the customer, he admitted that, at this point, the customer is pretty much DishTV’s. He hinted that this could change as the rollout of a hybrid satellite/on-demand via broadband offering (expected in Q1 2009) will allow much more customization of the product for Windstream.

This is consistent with their focus on enhancing the broadband experience of their customers. Approximately 85% of their customers can receive their 3 Mbs tier, 40% can receive 6 Mbs and 22 to 25% can receive 12 Mbs. To increase the value of this bandwidth, Windstream has is either offering or planning to offer services such as tech help, home network VOD and security services.

He suggested that one way to monetize its broadband infrastructure is through, “Consumer preference advertising.” This is the type of targeted advertising that has been at the center of controversy in Washington. Gardner pointed out that the industry has to figure out how to add this revenue stream to their portfolio. He believes that targeted advertising ultimately provides a better experience for the consumer, as they will receive advertisements they want to see and implied that the new advertising revenue streams will effectively subsidize consumers’ broadband subscriptions.

Finally, Gardner suggested that Windstream is well positioned for further merger and acquisitions with other telcos. He warned that the ability to enter into such transactions will be slowed somewhat by the credit markets and to not expect anything for 12 to 24 months.

Mining Data & More in St. Louis

I have found vendor user group meetings can be as every bit as valuable as for-pay conferences. The Entone User’s Group meeting held in the convenient, historic and revitalized downtown St. Louis last week, was extremely valuable for the participants, who included Entone customers, prospects and partners. Entone has been a long-time supporter and sponsor of the Viodi View and ViodiTV and it was an honor to moderate a couple of the panels at this event and I enjoyed the interactive nature of the panels, as well as the openess of the discussions. 

Steve McKay, CEO of Entone, kicked off the conference by suggesting that Triple Play has become a zero sum game and that operators will need to continue to refine their offering to compete. McKay emphasized the importance of a whole-home media offering for operators as they seek to differentiate themselves from CATV and DBS.   Features of this offering include DVR, ability to view over the top videos, inclusion of personal media, in-home distribution and place-shifting tied together with an integrated and easy to use interface that only requires one simple-to-use remote. What McKay is calling for is not trivial and he called on the operators to push the vendor community for these sorts of whole home media devices. 

Colin Dixon of The Diffusion Group gave backed up McKay’s comments with some interesting data, particularly on home networks (going from 150 million in 2010 to 1 billion in 2030). Dixon stated that, "The PC is not and will not be the center of the home entertainment universe. The PC is a disabler." He suggested a much more TV-centric view of where over the top video is going, when he suggeested something like 12% of broadband viewers are watching 5 or more hours of video on the Internet per day and 84% of people who watch video on broadband want it on TV. 

Along these lines, he emphasized, "That the Internet is transitioning from a technology to a medium." He called what is happening the greatest realignment of television services in 60 years. He suggested that, "Bringing the web to TV is a losing proposition, while bringing the TV experience through the web is a winning proposition." To bolster this argument, he cited TDG’s primary research that suggests more than 3/4 of people prefer to watch DVDs in a social setting some or all of the time. His point was that new media must leverage existing behavior to be successful. He stressed the importance of the guide in helping people to discover content, as opposed to searching which is difficult with a television interface. He also called on telcos to look at new kinds of programming, such as gaming.  

Dixon provided an excellent overview of the entire over-the-top value chain, from content ingest to content delivery. It was a great set-up to my conversation about independent telcos and what they are doing in terms of local content. Several of the telcos in the audience mentioned that they are utilizing their VOD servers to store and stream local content. And local content is a differentiator, but it may not always be enough to keep a customer from churning. 

Doug Abolt described Consolidated Communications‘ process of how they mine their data to determine which customers are likely to churn. This has allowed them to target their marketing dollars and offers, such that they are able to get a better return on those investments. At the same time, there have been unexpected benefits, like identifying weak points in their networks. He described the virtual focus groups that are part of this process as being much more efficient, less costly and timelier than the traditional focus group. Abolt’s presentation was a good exclamation point on a couple of very productive days of learning.     

Cleaning Products – No, It’s Web 2.0 Technologies

Martin Taylor, Vice President of Product Management and Technology for MetaSwitch, gave an excellent overview of XML and its ascent as the standard for machine-to-machine interface in the telephony world. XML allows for a mash-up of applications, such as the obligatory caller ID on television. Combining XML data with Asynchronous JavaScript is AJAX, which allows updating of a web page without the user having to do a manual refresh.        

Robert Cooper of Aastra followed up Taylor’s presentation with applications of how their customers are feeding XML data from Soft Switches or the Internet (e.g. think a CNN news feed directly to the phone) to LCD displays on the Aastra telephones.  Aastra’s Software Development Kit is available at no charge, so it is easy for developers to create their own applications. Cooper gave an example of how a visual voicemail application took only 4 hours to develop. 

A school system in Texas uses Aastra phones as an alternative to paper and/or computers for determining attendance. The teacher uses the LCD screen and the phone’s buttons to record which students are in class. An XML feed, sent from the phone to the IP PBX, triggers an automatic action within the PBX to call the parents to confirm that the children are home and not skipping school. A software-defined, panic button is another feature of this particular phone

One of the more interesting applications that Cooper spoke of was the use of SIP over DECT 6.0 phones. Cooper said the DECT protocol is less prone to interference than VoIP over WiFi. With SIP, it is possible to deliver the same text applications to wireless phones as one could get using a desktop PBX. I wonder if there is a way that a spectrum-starved independent telco could use the combination of SIP and DECT 6.0 to create a robust, community wide and feature-rich, cordless telephone service (it looks like Aastra could support up to 512 handsets per PBX, so it might have to be a small service area)?

“The unmanaged network is where it gets interesting,” said Michael Branch of Minerva Networks. He said this in the context of a telco operator bringing content from the Internet to the television. He suggested that an XML widget could remap specific Internet content (e.g. a photostream from Flickr) to the television. Matt Cuson of Minerva Networks alluded to this kind of widget integration last September in a panel in San Jose, so it wasn’t a big surprise to hear this approach from this middleware provider. 

XML also allows, as Branch put it, “guided viewing,” whereby a trigger on either an event (e.g. a pop-up window that links to iTunes so a person can order a song that is playing in the video program he is watching) or an action by the user could determine the content being displayed (e.g. a request for more information). Of course, XML is also useful for displaying traditional managed video information (e.g. VOD titles), as well as telephony meta-data (e.g. caller ID on the TV). 

Alternative Video Killed the Video Store

Back in the early days of commercial Video on Demand (circa 1999), when I was with the on-demand, Application Service Provider, DemandVideo, one of the benchmarks for our success was the demise of a video store.   That is, we knew that if a video store went out of business because of what we were doing, we were changing the status quo. Eight years later, it looks this milestone has been met, as indicated in this report from WCVB indicates that at least one video store’s demise can be attributed to the success of alternative methods of video delivery, such as VOD, online and Netflix.


VOD Provider, Demand Video, Ceasing Operations


Example demandvideo ad slick

DemandVideo, a privately held company providing Video on Demand (VOD) services for the cable television industry, announced today that “adverse market conditions” had forced it to cease operations, effective immediately.

The company, founded in September 1998, was headquartered in Sunnyvale, CA. That office was responsible for its server and network technology solutions. The firm’s Santa Monica office was responsible for content acquisition, consumer and affiliate marketing, and digital arts.

DemandVideo’s comprehensive and cost-effective VOD services delivered a compelling, turn-key solution for its affiliates. Its early distribution emphasis was with broadband service providers (BSPs) since that market, with its 100% digital subscriber base, was able to deploy VOD immediately. BSP subscribers with the DemandVideo service could choose from a selection of on-demand programming, including recent Hollywood hits, classics, children’s titles, how-to programming, etc. Using the DemandVideo interface to rent a title, subscribers had real-time viewing privileges for 24 hours with complete VCR functionality: play, pause, rewind and fast-forward.

“We had enjoyed significant momentum since the Western Cable Show late last year,” said DemandVideo President and CEO Richard Hercules. “In recent months, we announced an important affiliate distribution deal with Denver-based WideOpenWest—on top of our installed base with Seren Innovations and Everest—and content deals with Court TV and the BBC. Several other important content and distribution agreements were about to be signed. Regrettably, adverse market conditions sorely impacted our and our affiliates ability to raise the capital necessary to continue.”

Besides Hercules, DemandVideo’s senior executives were Larry Coleman, Senior Vice President and General Manager, Content and Product Strategy; YP Chen, Senior Vice President, Engineering and Operations; Susan Marr, Vice President, Corporate Development; Cheryl Koll, Vice President, Affiliate and Consumer Marketing; Steve Schuh, Vice President, Sales; and Brian Stevenson, Vice President, Programming.