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NetcableTV champions 'assisted' P2P

Tue, 11/30/2004 - 7:00pm
Jeff Baumgartner

Putting a new twist on the delivery of video and other content via IP, NetcableTV emerged from secrecy this fall to unveil an "assisted" peer-to-peer software platform that claims to be much cheaper than traditional client-server setups. Adding high-def to the mix, the company aims to do this legally and add enough layers of security to keep even the most leery content owner satisfied.

The company is chaired by Andy Devereaux, a former General Instrument Corp. exec and co-founder of American Cablesystems.

CED Editor Jeff Baumgartner recently caught up with Devereaux to find out more about NetcableTV's technology and how it might complement (or possibly compete with) the cable industry. An edited transcript follows.

CED: Let's start off with a description of what NetcableTV is and does.

Devereaux: NetcableTV is a peer-to-peer, assisted technology that enables the delivery of video products over the Internet directly from owners of that content to consumers.

CED: Who are your customers?

Andy Devereaux
Devereaux
Devereaux: NetcableTV is really an enterprise software package. We are not selling to the end consumer. What we are doing is selling the enabling peer-assisted software to content owners. They (our customers) roughly fall into five buckets: the movie studios, the cable television suppliers, the portals...cable television companies...and the movie rental business.

CED: What's driving the need for this technology?

Devereaux: One is increased speed on the network. Two, is a whole new family of consumer devices besides the PC that are being introduced on the market. The simplest way to describe them is they are TiVo-like devices that attach to the Internet. They are being called consumer media servers. Some are calling them media PCs. Digital content will be dumped down over the Internet to these devices.

CED: Are you referring to Akimbo as an example of this?

Devereaux: Most of the technologies that are out there today in this space are client-server. This is a peer-to-peer technology, known as a peer-assisted technology. It is what I would call a legal form of software that is very similar to KaZaa or Napster (before it went legit) in its methodology.

Let's say, for example, that we sold this software and a customized front-end to HBO. You (as the customer) would go to a Web site...and choose the content you want and then it's downloaded to your media server.

Our customers in this case would make decisions as to what level of quality that they want. They can choose anything from VHS up to high-definition.

From a cable point-of-view...what you have is a virtual cable system by creating a number of channels using this software, but all of them would be on-demand. I could go to a cable operator's Web site and want to watch, say, Lifetime. I would then have access to all of Lifetime's programming. I can pre-program the machine, so the functionality would be very similar to a TiVo unit.

CED: Because you're talking to the content people and the people that build the pipe into the home, it sounds like you're going to have a lot of deals in place to make this work.

Devereaux: No, not at all. Right now we can download to PCs, and you can take that content and watch it on an airplane, as an example. We have two customers in two of these [customer] silos for which we are now writing specifications. We have a fundamental software package that's been up and running for two years. It has been approved for the studios for the distribution of their content. But each of our customers wants a customized front-end. We will also tie this into their existing billing and management system. In one customer's case, they want a complete system.

CED: What's your business model?

Devereaux: It's very simple. It's software licensing. We license to our customers a software package that allows them to deliver video content to their customers. There are also professional services fees for any extra bells and whistles such as front-ends and that sort of thing. There's an ongoing minimal charge for a download of each engine onto your media center and then there's a charge for each download that occurs—and we're talking pennies.

CED: How is that content being protected?

Devereaux: We have a triple-DRM system. We use Microsoft DRM, we use our proprietary DRM and then we have another system that divides content into chapters. Then we mix and scramble the chapters as part of the peer-to-peer process.

If our customers want to watch it once, for instance, we can arrange that. If you want to watch it in a specific timeframe, if you want to watch it in a pre-timeframe—in other words, if it's a premiere release—we can download it today and it can be watched then [on the premiere date].

CED: What's the application or business proposition if I'm the cable operator?

Devereaux: If you look at this medium, it's going in the historical course of a lot of different mediums, whether it's long distance telephone calling or whether it's broadcast or radio. It's going from a broadcast medium to becoming a very narrowcast medium.

The current technologies that are being used for pay-per-view are good for very high-value product. If you're going to charge $2 to $10 for a movie, it works fine. It does not work as well as you get down to cheaper content. The value of our peer-to-peer system versus a client-server system is that we are a factor of 10 to 100 times less expensive, depending on the nature of the content. You don't need racks and racks of servers. Also, because the medium is asynchronous, we can download from multiple different locations onto your PC.

CED: Or some other device down the road.

Devereaux: That's what we're really planning on. We're planning on the fact that Sony, Panasonic, Philips are all introducing these media PCs...that are coming on the market mid-next year. You can already do that with the PC.

CED: When you say content is going to be peered from all of these locations in this assisted environment, where are all of these locations going to be?

Devereaux: If you sell over 3,200 copies of anything, you've got enough distribution sitting on people's media servers. Part of their agreement is when they take this content, they sign a licensing agreement to allow you to let that [content] sit there. We'll be continually polling that to make sure that their PC is on or their media server is on, and that the content is still valid. Those are the overhead management bits, and those are a fraction—one to two percent—of the total load. We can continually scan the network. That's essentially the "assist" of the peer-to-peer. That's the big difference between us and the current ones that you see on the Internet.

CED: Then if I'm on the system and I'm storing a movie, you want to see what's on my media server, and if someone requests it, you'll pull the information from my stored asset?

Devereaux: What I will do is pull only one of about 30 to 40 chapters, depending on how we divide it up. You'll only see me for a few seconds.

CED: Which of your business "silos" do your two existing clients belong to?

Devereaux: One is in the movie rental business and the other is a cable programmer. We have talked to someone in all of the silos. Our mission is to get one person from each silo up and running in the next year, and then spread it from there.

CED: If the company has been around since 2001...

Devereaux: I said the software has been around. The company has recently been funded. But the software is a restart of a failed company, essentially.

CED: What was the previous company?

Devereaux: I can't tell you. We're sworn to secrecy. I'd have to kill you.

CED: You'd know where to find me, unfortunately.

Devereaux: (laughs) Their business model, by the way, is not the business model I just described to you. They were in another area altogether. (Editor's note: Netcable's technology reportedly was developed by Napster co-founder John Fanning, who later tried to use it to run a service called NetMovies.)

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