Video: A Portable Feast
Transportable video markets are emerging from their cocoons and steadily taking flight as MSOs leap to grab ahold.
In my Chicago days, my morning commute on the Red Line included a Starbucks soy latte and NBC’s “The Office.” I would intently watch Jim and Pam’s sexual tension and the laugh-out-loud antics of, well, every character on the show. Literally, I would laugh out loud.
Occasionally I would mentally transport back to the el and find pairs of eyes flinging switchblades at my head, and at my iPod. I knew the feeling – I had launched jealousy machetes at a young girl enjoying the show just months earlier before rushing downtown for my very own device. Even the sudoku in the Chicago Tribune doesn’t hold a candle to Steve Carell’s facial expressions, no matter how small the viewing screen.
But it never occurred to me that if top cable executives had been sitting across from me, they might have been lobbing frustration-filled grenades at themselves, irked because my enjoyment of a primetime TV show was not in any way increasing their revenues, and perturbed at their lack of presence in the transportable video space.
It can be argued that the cable operators sat back and watched the mobile and portable video markets emerge from their cocoons and steadily take flight before running toward the soaring objects and leaping to grab ahold. But some operators have squeezed their way in to the still-fairly-nascent and obstacle-ridden space, and the market’s doorway is far from being shut, dead-bolted and chain-locked. The dilemma is which footpath to take once inside the entranceway.
THE EMERGING SPACE
2002 saw the launch of the world’s first portable video player – Archos’ Jukebox Multimedia. Now more than 50 manufacturers churn out the portable devices, and soon consumers won’t be able to purchase a cellular phone that doesn’t have video capabilities.
But for now, only about 10 percent of mobile phones in the market are video-ready, and in Q4 2006, there were only 6.2 million U.S. mobile video subscribers – just 2.5 percent of the more than 236 million total mobile subs, but up 145 percent from Q1 2006, according to Telephia Inc. The company said carrier revenue for mobile video subs totaled $148 million in Q4 2006, up about 188 percent year-on-year.
All of which explains why cable operators are interested in mobile video, but the numbers tell only part of the story about why MSOs are displaying little urgency about offering it. The market is still small for a reason: technology has a way to go yet.
But, obviously, as demand for video on-the-go increases, so will the caliber of technology. The 80 GB iPod (2.5-inch, 320 x 240 pixel display; up to 100 hours of video storage) scoffs at the 20 GB Jukebox Multimedia of lore (1.5-inch, 237 x 234 pixel display; up to 40 hours of video storage) like the PlayStation 3 derides the original Atari. But Archos’ current 80 GB 704 Wi-Fi, with a 7-inch, 800 x 480 pixel display, spits back fighting words.
With both portable and mobile video devices, evolution has increased storage capacity, video quality, processing power and battery life, and the market will continue to evolve, just as the computer market does, with more and more sophisticated devices coming out.
Major advancements are occurring in video compression technologies, with the relatively new standard of MPEG-4 H.264/AVC, says Motorola’s vice president of business development David Grubb.
Jean Macher, director of marketing for Grass Valley’s video network systems unit, says that with H.264, enhanced quality video of 25 to 30 frames-per-second can be sent in 200 kbps.
Two roadblocks in mobile video land are the decoding of video and the RF component used to receive video, Macher says. When a cell receives a video transmission, the RF component is on and consuming a lot of power, and the issue is how to detune without draining the battery. But technology is available for broadcast mobile video, Macher says, where the RF is only on a portion of the time. The information sent is time sliced instead of hurled all at once, allowing the RF to periodically rest.
According to Bill Tomeo, vice president of JDSU’s Service Assurance Solutions division, more than half of mobile network issues exist in the access network straight through to the subscriber. He says either something is going on with regard to either the nature of the radio access network, and how the session is being set up and torn down at the subscriber level, or the problem exists within the home.
Mobile video is one of the most challenging services to offer because subscribers’ perception level for high-quality video is high, especially when they compare it to their TV service at home, Tomeo says. Trying to perfect video service on the handset, along with handling all of the problems associated with traditional calls, is the real challenge. Up until now, the phone call has been the biggest priority.
In order to offer mobile video services, the telcos are upgrading their networks and rolling out new ones. With AT&T and Verizon, the game is to overlay the broadcast network on top of their 3G networks. AT&T’s ever-expanding 3G service is available in more than 150 cities nationwide.
Verizon – which became the first U.S. company to launch a 3G network in 2002 – is constantly spreading its EV-DO Rev A seed.
Sprint Nextel is also rolling out EV-DO Rev A, and the company has been looking at DVB-H, Macher says. Sprint plans to build a high-speed wireless access network based on Mobile WiMAX (IEEE 802.16e-2005) technology, and it expects to have the first part of its network operational by the end of the year.
According to Macher, the three major aggregator players are Modeo, which uses DVB-H technology and has a 1.6 GHz spectrum; Qualcomm, whose MediaFLO has deals with AT&T and Verizon, and who recently acquired the mobile WiMAX capabilities of TeleCIS Wireless; and Hiwire, a spectrum owner planning to launch mobile TV service in the coming months.
As networks continue to improve, the center of focus will move more and more from the network to the value of the service.
“If you’re going to swim, you’re going to get wet,” says GoTV Networks’ COO Thomas Ellsworth, referring to the inevitability of challenges facing any contender penetrating the transportable video space. But four MSOs have taken that plunge, and they’re receiving mad props for it.
The joint venture (JV) of Sprint Nextel and MSOs Comcast Corp., Time Warner Cable, Cox Communications and Advance/Newhouse Communications was announced in November 2005. A year later, the JV (aka Spectrum Co.) won 137 wireless spectrum licenses for $2.37 billion at the FCC’s Advanced Wireless Services Auction No. 66.
Once through the transportable video portal, there are two major pathways leading cable contenders on the way to their final destination – forming a JV and buying spectrum, says Motorola’s Grubb. The Sprint Cable JV is big enough to straddle both.
The cable operators’ ability to deliver quad-play packages – which are becoming increasingly more important – via the JV, without having to build infrastructure or get licenses for spectrum on their own, is a great expansion of their living room strength to the PC, and eventually to the mobile handset, says Gotuit Media Corp.’s CEO Mark Pascarella.
AT&T has offered the quad play since 2004 with Dish Network’s satellite TV, and Verizon kick-started its foursome in January with DirecTV. The former can offer a similar package with its U-verse service and the latter with its FiOS TV service. It would be mighty difficult, if not impossible, for a cable operator to start from scratch on wireless and expect to compete with these guys.
Grass Valley’s Macher says cable companies could work with a Qualcomm or a Modeo to access a mobile TV network such as Verizon is doing, but asks, and then answers, twice: “Are [the JV cable operators] willing to provide cell phones to subscribers like set-top boxes? It’s a far fetch.
Are they willing to deal with a mobile TV subscriber? They want to rely on Sprint to deal with those cell customers.”
They also don’t want to have to go through the mêlée of landing programming rights, because the rights to content are negotiated on a platform by platform basis in the U.S., making for an expensive and tedious process. Just ask Verizon.
The JV is terming itself Pivot to convey the device-shifting, interoperable goals it has for its future, but, as of now, no set-top-to-mobile phone features are available. But the market is on the way there.
Macher says all the latest STB designs include USB connectors and hard drives or flash drives, an option he said is being incorporated by Thomson in some of its products.
If a DVR were equipped with Windows’ digital rights management (DRM), content could be pushed from the DVR to a portable media device with Windows’ DRM, says Ken Morse, VP of client architecture at Scientific Atlanta, which has done prototyping for this. It’s just a matter of loading the software onto STBs that have the correct DRM scheme.
Morse says this is a great opportunity for cable operators with access to in-house content libraries, including Comcast and Time Warner, to redistribute content and generate more revenue. He says cable operators are weighing this option from a technical delivery aspect and mulling through the business models, seeing if it’s financially worth it.
The need for a DRM industry standard is being advocated by the Digital Watermarking Alliance (DWA), which launched in September. It comprises 15 companies and deploys the imperceptible watermarking in movies, TV shows, music tracks, and even driver’s licenses.
The distribution-channel-independent watermarking is part of the content, says DWA Chairman Reed Stager, until it arrives at a downstream device and is used by the device owner.
Technologies like this will only enhance the interoperability consumers will come to expect in the future. CableMatrix’s VP of Business Development Jay Malin says the convergence between telcos and cable operators, which has been emerging the last couple of years, is going to grow this year.
“Consumers don’t want to be bound by distinctions between their home and mobile services,” says Motorola’s Grubb. “They want video service wherever they are. Sprint has the mobile half, and the MSOs have the home half, and if you put those two assets together, you can offer a more complete solution to the consumer...We believe that this idea of converged services is going to be an important one from the business perspective going forward.”
And as for those who think the transportable video market will someday make the television set obsolete, if you think this alumna will ever watch a University of Florida football game on any screen less than 27 inches, you’ve got to be out of your mind.