Web-based media hits fast track
The pursuit of market opportunities for interactive Web-based entertainment media has moved onto two fast tracks, one devoted to exploiting minimal access speeds to deliver streamed multimedia content, and the other focused on trumping this with media streams that operate in the multi-megabit realm.
For players in the first category of streamed service development, the good news is that technical tools now at their disposal give them a much higher level of quality to work with in their content strategies than seemed possible just a few months ago. With some streaming system suppliers demonstrating close to VHS quality video over links operating at 500 kilobits per second or less, Web content providers have an opportunity to deliver unique services that can compete for TV viewers' as well as PC users' attention.
But the bad news for these players is that the multi-megabit possibilities surrounding cable's emerging set-top platform promise to put an interactive media package into play that could push customer expectations well beyond the reach of anyone offering broadband media services over data channels operating in the sub-megabit range. This is true because the power of advanced set-top boxes and end-to-end operating software, combined with the high bandwidth available over cable, allows IP technology to be seamlessly linked to MPEG-2-based video from traditional cable and broadcast network programming sources, extending the reach of Web-based content across a large number of cable channels. And cable's DOCSIS (Data-Over-Cable Service Interface Specification) platform affords operators an opportunity to dedicate one or more channels to TV-directed, all-IP multimedia services.
Web-based portals and new-media companies have hit the ground running, pulling out all the stops with newly available authoring and streaming tools that give them a shot at making a big splash in a residential market for high-speed data that's on track to hit close to five million homes by year's end, counting wireless and DSL as well as cable, according to an NCTA-sponsored report from Paul Kagan and Associates.
Content strategies include long-form as well as short-form video and sometimes include expectations that the video quality will be sufficient to support cable-like on-demand programming from the Web.
In the case of Waterford, Conn.-based MeTV.com, for example, the business model includes a means of delivering Web-based movies on demand to the TV from a PC that's connected to a DSL or cable modem without requiring the use of a set-top box of any kind. Instead, the vendor has developed a small box that connects to the PC via a wireless link and plugs into the A/V inputs at the back of most recent vintage TV sets, thereby supporting translation of the firm's IP Webcast signals to the NTSC television display format.
"We're still working on (retail) distribution channels, but we anticipate the module will cost about $100," says MeTV CEO Jeffrey Pescatello. This includes a wireless transmitter operating in the unlicensed 5.4 GHz band that plugs into the PC and pipes the digital video signal to the TV. "We're charging for movies on demand at about the same price level as you would pay at the video store—$3 to $4 per viewing," Pescatello says. "We're delivering comparable quality at much greater convenience, so those prices make sense, although, eventually, we hope to move to a monthly subscription model."
To achieve reliable distribution at such low bit rates, MeTV is using the services of Seattle-based encoding.com, which compresses and formats content for suppliers like MeTV and also acts as an aggregator of backbone distribution networks to facilitate high-quality delivery to network edge points. Encoding.com has licensed several compression, file formatting and streaming systems from leading suppliers, including the newly-enhanced Windows Media platform from Microsoft. The firm's backbone distribution partners include iBeam Broadcasting, Intervu Inc., Enron Communications Inc. and Digital Island. "It doesn't matter who your ISP or cable operator is; when you go to our Web site, the system automatically finds the best backbone distribution network for delivering a movie to your service provider's POP (point of presence)," Pescatello says.
Regardless of whether the ambitions of MeTV pan out, it's clear that the connections of millions of homes to data links that operate at 300 kbps or higher speeds provides a market for Web-based entities to ply with content that marks a dramatic departure from what people are used to in the dial-up Internet environment. The makers of Web software tools have optimized innovations like variable bit rate encoding, forward error correction and improved efficiency in film-to-video conversion that have been features of bandwidth conservation in the digital TV domain, leading to applications that run the full gamut from mostly one-way on-demand entertainment, to live events, to highly interactive "virtual parks," to multiplayer gaming.
For example, Real Networks Inc., in version 7 of the server software for its G2 streaming platform, includes "two-pass profile encoding" and variable bit rate encoding, which work together to analyze the moment-by-moment bit stream requirements of an audio/video segment in order to maximize bandwidth efficiency. If, for example, a sequence has a fast-action segment that would normally require more than 300 kbps to meet minimum quality requirements, the system will find space in a proximate, lower bandwidth-consuming sequence to handle the excess processing, thereby ensuring that the overall bit stream is fully utilized.
Creating a better broadband experience "meant rewriting some code, but we've been able to gain over a 50 percent improvement in performance," says Rob Grady, product manager for RNI. That means that frames are dropped far less frequently than was the case previously, and that VHS quality at full screen can be achieved at under 500 kbps.
RNI's approach to broadband since it introduced its G2 platform last year has been to provide developers the ability to deliver the same file at four different access rates of their choosing, typically ranging from 28 to a few hundred kilobits per second. This way a content supplier can be assured of serving the mass market of dial-up users, while at the same time, offering a higher quality audio/video feed to those users who happen to come to a site over high-speed access lines. "With over 75 percent of our users accessing content over dial-up lines, we're very focused on meeting their needs as well as the broadband requirements," Grady says.
Along with coming up with better streaming systems, suppliers are now including in those compression and streaming toolkits new means by which e-commerce and advertising capabilities are easily built into a file program, supporting highly interactive, media-rich experiences with hooks for dynamic ad insertion and a wide array of account management functions. A case-in-point is AOL's use of the new authoring tools supplied by Veon Inc., which include support for the major compression and streaming formats from RNI, Microsoft, Apple Computer Corp. and other vendors.
AOL is now shipping Veon's client player with version 6.0 of its startup kit, expanding on a broadband-enabling strategy that already includes shipment of the RNI G2 player with every AOL disk. Anyone with the Veon client plug-in will be able to access content developed with the firm's tools, says Gaurav Suri, COO and CFO of San Francisco-based Veon.
The Veon authoring tools, which include the major compression and streaming formats provided by other vendors such as Real Networks Inc., Microsoft Corp. and Apple Computer Corp., allow developers to incorporate the measurement and management components as well as the disparate media and advertising content pieces in a simple point-and-click navigation mode in the developing process, Suri says. The firm is also working with Excite@Home Inc. and many other suppliers of broadband content to enable easy development of end-to-end, revenue-generating services, he noted.
While AOL has been low-key about its broadband content development efforts, the firm has progressed to where it will be able to launch a wide range of multimedia material across 15 "channel" categories, Suri notes. "We're working with several of the suppliers in these channels," he says, adding that AOL wants to be sure its content can scale to a mass market when it becomes available.
Its cable strategy notwithstanding, AOL offers a prime example of an aggressive broadband media strategy in execution as it moves ahead with rollout of the DSL version of its service, starting with limited deployments to existing AOL customers in a handful of Bell Atlantic markets. The company is slated to go to widescale marketing of the DSL service in Bell Atlantic and SBC Communications territories as the year progresses, which will cover much of the East and West Coasts and segments in between.
AOL has also moved rapidly ahead with preparations for rollout of AOL-TV, which it demonstrated publicly for the first time at the Consumer Electronics Show in January. AOL TV deals with TiVo, Philips Consumer Electronics and DirecTV have gotten the ball rolling toward early launches this quarter, and many more partnerships are in negotiation, according to company insiders.
As service providers, including MSN, Mindlight, Earthlink, Flashpoint and others as well as AOL, move to launch broadband media services in the DSL, cable and satellite data segments, broadband portals have become almost commonplace not only for big content aggregators like Excite@Home Corp., Yahoo! and NBC's Snap, but for more specialized portals of every description, including providers of e-commerce.
Equally important, an army of vendors offering ways for broadband media to get around the traditional Internet bottlenecks is making it possible for even the smallest content providers to secure means of ensuring that the high-speed access visitors to their Web sites won't be disappointed by packet delays in the metro and national backbones beyond the local distribution points. New applications service providers (ASPs) devoted to the broadband media space are further facilitating resolution to the wide area distribution problem by aggregating multiple options for content providers to tap into for the best possible delivery performance.
The emergence of a company like the aforementioned encoding.com in this space provides a much smoother entry point for small and large suppliers alike, allowing them to maximize their content reach without having to put all the pieces together themselves. "We're able to significantly lower the barriers to entry for companies that want to provide streaming and digital media solutions without investing in the required technology and services," says Martin Tobias, CEO and founder of encoding.com.
What all this adds up to is the fact that entities that want to establish a following for broadband content now can do so. Those who exploit the available means aggressively now will be in the best positions to take on the competition as delivery of broadband media to the TV as well as the PC becomes a force to be reckoned with in cable as well as other environments.
But cable is pushing forward with a new agenda based on its ability to use the combination of its high-speed data platform and computerized set-top terminals to deliver new types of services. Alarmed over DBS, which now boasts 10 million subscribers and newly won authority to deliver local broadcast channels, the top companies have committed to ordering far more next-generation set-tops than vendors or they themselves anticipated six months ago.
"Every time somebody walks into Best Buy it seems like they're being sold a DBS box," says Jim Wood, vice president for advanced technology at AT&T Broadband and Internet Services. "We've got to do something to stop the bleeding."
But cable also wants to ensure that its move into exploiting the integrated service potential of Web-based media and digital TV doesn't turn into a bonanza for the Web side with little coming back to the cable providers of the access platform. "We want to do deals that give content providers special opportunities to control the resources in the box," Wood says. "With regard to Internet content providers in general, I don't trust them enough to give them open access to those resources, so I'll put them off in a sandbox."
In other words, the potential for mischievous use of the software stack supporting the graphic user interface, graphic and video transcoding and rendering and other functions requires that Web entities not contracted to use those resources be accessible through the built-in cable modem of the set-top without benefit of many of the capabilities that allow high-end multimedia content to run on PCs. This is a nice way of saying that, even with the Web-enabled broadband media set-top, cable will pursue its long-standing "walled-garden" agenda, requiring anyone who wants to exploit the full potential of the platform to cut deals with the operators.
The emerging cable strategy is well reflected in a variety of market trials and vendor activities, including Excite@Home's implementation of an Advanced TV platform under guidance from its largest shareholder, AT&T. Operating over DCT-5000 or equivalent set-tops that come with cable modems built in, a 167 MHz CPU and 24 megabytes of RAM, Excite@Home's TV model provides several avenues for cable operators, service providers and content suppliers to take in developing business models that include both open Web access and various walled-garden approaches, notes Kent Libbey, director of Advanced TV products.
As currently configured for initial testing, the Excite@Home TV service allows subscribers to access walled-garden partners of AT&T at no charge, while setting a premium price of about $15 per month for surfing the Web via the TV set. The company has developed "TV Manager" software as an interface to ride on various operating systems, starting in the case of AT&T with Windows CE for TV, thereby affording users the same on-screen experience regardless of the OS running on the set-top, Libbey notes. The system allows service providers to determine the relationship between Web-based content and what's running on a particular TV channel the user happens to be tuned to, which means the TV channel and Web pages can be set to keep the TV on all the time, keep it on for certain Web experiences or let it be clicked out at the user's discretion. The TV window can run at any size within a larger Web screen down to "postage stamp" dimensions, or it can be run at full screen under a translucent cover of the Web content.
All this adds up to being able to tie together specific TV content with Web content through advertising, e-commerce or other applications in whichever ways best suit the business arrangements among the suppliers of content and services. Moreover, the system allows the service provider to determine where any transcoding of IP content will be performed to support high-quality display of that content on the TV, either at the set-top, in which case all IP content gets to be viewed in good quality presentations, or back in the network, which allows the service provider to be a gatekeeper controlling which Web content actually looks good on the TV and which is of minimal, untranscoded quality.
"We've tried to make this work for just about any business model you can think of," Libbey says.
Another cable entity that provides a glimpse at what is taking shape for next-generation broadband media is Cablevision Systems, the New York-based multiple system operator that is preparing to introduce video-on-demand and other advanced services in a market trial this summer. An intriguing component of the types of services Cablevision will eventually be able to deliver once it works through fine tuning of the set-top platform with Sony Corp. can be found in a new video display system the company is using in conjunction with live sports events at Madison Square Garden.
Now limited to display on 10-inch screens implanted in seat backs at the Garden, the company's new personalized, multi-feed interactive system for sports coverage can readily be ported into its advanced network services structure, officials note.
And, soon, its partners in the MSG project, including Intel Corp. and CSI Inc., plan to add another element, known as "spherical video," that could add a new dimension to interactive TV of all kinds.
"We're looking to see what portions of the MSG product can be transported to the interactive cable platform," says Wilt Hildenbrand, senior vice president of engineering and technology at Cablevision. "I think it's the beginning of things to come."
New York City-based CSI's ChoiceSeat system uses Internet Protocol servers in conjunction with video feeds from up to eight camera locations to deliver options to "smart seat" locations that include choice of camera angle, personalized replays and game highlights, ordering of refreshments from concession stands and merchandise from other sources and statistical information on players and teams. Everything is accessed via touchscreen commands, eliminating the need for remote controls or special consoles, says Mary Frost, president and CEO of CSI, which is majority owned by Williams Communications Inc. "We have the system installed in 544 seats at this point and are contracted for a total of a little over 3,000," Frost says. MSG isn't charging extra for the seats, having chosen instead to offer the service as a benefit to fans who happen to be in those locations.
CSI has operated earlier versions of its systems in other venues, including baseball stadiums in Tampa Bay and San Diego, this year's World Series and the last two Super Bowls. Along with developing new relationships with other venues worldwide, CSI is focusing on the network service potential afforded by broadband networks, especially cable, Frost says.
"We see ChoiceSeat as the evolution of sports entertainment," she says. "Cable companies like Cablevision are deploying interactive set-top boxes that, in combination with the bandwidth of their networks, support scaling this technology to reach the home audience as well as people in the stands."
While the idea of multiple camera angles and interactive viewing of sports events has been around a long time, most notably in the decade-long offering of such services by ACTV Inc., the moment is only now at hand where such services are truly practical, Hildenbrand says. "Now that we're in the phase where we already have a saturated market presence of digital set-tops, two-way systems and customers accustomed to digital services, the time has come to look at things like ACTV and ChoiceSeat," he notes.
ChoiceSeat's approach at MSG, where IP technology is put to work to embellish video programming in a closed environment as opposed to one linked with the Internet, conforms to the model Cablevision has in mind for services to be launched over the new interactive broadband media platform. "Our intention is to offer Web-enhanced TV as opposed to full Web browsing, including video-on-demand and e-mail as well as new types of interactive programming," Hildenbrand says.
By using Web technology while avoiding the porting of Web content to the TV, Cablevision lessens the amount of transcoding that would be required for Internet access via the set-top and ensures that the interactive content viewers see is delivered from sources it is affiliated with, as opposed to the unaffiliated providers of "broadband content" that are proliferating across the Web.
"It's not clear what the killer apps are in Web content that we can't do ourselves," Hildenbrand says. "E-commerce? Video-on-demand? Those are things we plan to offer."
With a strong base of content resources, Cablevision will have no problem fashioning content that wraps home-grown Web-based graphics and text fed from headend servers around video feeds to create interactive programming, Hildenbrand said. Lending spice to the potential of such programming is a new technology under scrutiny by CSI for its MSG operation involving use of an eight-lens camera that feeds viewers a complete 360-degree full-motion encapsulation of the live action. Developed by Portland, Ore.-based startup iMove Inc., the spherical video system is the first to offer a real-time delivery mechanism for seamless viewing of any portion of the captured environment on command from the end user.
As described by iMove Chairman Roger Thomas, the company's system captures video from all the lenses of the camera and combines it into a 24 megabit-per-second stream that allows the viewer to look at whatever portion of the 360-degree scenario he or she chooses. Presently, the system operates at a resolution of 750 by 750 pixels, which is close to NTSC-quality video, and it will move to 1,000 by 1,000 resolution by year's end, Thomas says.
"We're not yet able to support the user zooming in (on a given view of the moving scene), but that will come," Thomas adds. He says the technology has been licensed to certain suppliers of software development kits and video capture systems with the hope that it will become an industry standard.
Broadband networks may offer a potent opportunity for use of the technology, which also allows viewers to click on hot spots and link to other information feeds, such as Web-based content, Thomas says. "We believe the broadband world will figure out how to use this stuff," he adds.
As it does, the 300 kbps access speeds that pass for broadband today will begin to look like dial-up in comparison to what can be done over multimegabit systems. Given the plans in sway at AT&T, Cablevision and many other MSOs, it won't be long before the gap becomes a threat to Web-based players who don't play ball with cable. Of course, if the telcos can be persuaded to step on the gas and push fiber into their distribution networks, things will even out, but that's a tough hand to be holding if you're a Web content developer.