Next generation TV over the Internet: This revolution will be televised

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In this way, AMT can be viewed as a vital interim solution in the transition from unicast-only to multicast-enabled Internet networks. Of course, those providers are free to remain obstinately unicast-only and carry duplicate traffic across their networks. Most importantly, the end users are able to receive content from the sources.

AMT is not a new solution. In fact the AMT specification was originally drafted in 2001. What is new is that router vendors have recently added support for AMT in their large carrier routers, allowing service providers to offer AMT service in a scalable, manageable and profitable way.

The promise of Internet television was once a hallmark of the early Internet boom. But the multicast delivery mechanism required to make this vision possible ran into technical and economic real world obstacles. The recent availability of AMT helps hurdle those obstacles, restoring the possibility and promise of multicast. With multicast in place, the network is now ready to handle NextGenTV.

What NextGenTV would look like

If you wanted to start up a new television channel that was available on all the major cable and satellite systems and viewable to most Americans, a ballpark estimate of the cost would be in the hundreds of millions of dollars. Such high costs tend to keep out the riff raff. The number of television channels in existence is in the thousands, while the number available on most cable or satellite systems is typically in the hundreds. The number of American television viewers is roughly 300 million.

By contrast, there are more than 200 million Web sites on the Internet, which includes almost 2 billion users. Cost is the principle reason for this disparity. The cost of publishing Web content that could potentially reach a third of the planet's population can be done for tens of dollars per month. But the same cost model doesn't apply to video currently.

A highly-rated television show may be seen by 10 million viewers. Imagine transmitting that content on the Internet using unicast. A high definition stream of reasonable quality can be transmitted at 10Mbps. Transmitting 10 million of those 10Mbps streams on the Internet would require 100Tbps of bandwidth and a video server capable of originating that many streams.

Transmitting this much content simply cannot be done economically on the Internet using unicast. Content delivery networks (CDN), which are used to distribute the content load across the network geographically, could not appreciably change this equation. CDNs would merely distribute the problem. On the unicast-only Internet, the cost of transmitting simultaneous streams increases linearly with the size of the audience.

However with multicast, a video server with only the capacity and bandwidth of a single 10Mbps stream could deliver that same show to all 10 million viewers. Armed only with the Internet connectivity commonly available to broadband subscribers, one could easily transmit a single high-definition video stream that could be simultaneously viewed by much of humanity. This is because the cost of transmitting remains constant regardless of the size of the audience. Whether there is one viewer, or 1 billion, the cost of transmission is the same for the source.

AMT does introduce some per-viewer costs to the network provider since it does replicate to the unicast world. However, this is a fraction of the cost of typical unicast delivery, even with CDNs, as the replication point (the AMT relay) can be built into the network infrastructure and placed at the edge of the multicast-enabled world. Also, as AMT succeeds, native multicast becomes an increasingly attractive option for network providers. AMT is really just a (necessary) interim step toward full (or near-full) multicast connectivity on the Internet.

Now it is fair to point out that our sample television show with 10 million viewers wouldn't necessarily have 10 million simultaneous viewers. TV shows are typically staggered across the different time zones. Also, DVRs have made it fairly common for viewers to record shows to watch at a later time. However, it should also be pointed out that there is much television content, like sporting events, that is typically consumed live. For example, 106 million viewers worldwide tuned in to watch the Saints defeat the Colts in Super Bowl XLIV. The vast majority watched this game on live TV.

So who will create this new NextGen TV content when it only costs a few tens of dollars a month to be a television channel? Toward the end of the previous century, it was envisioned that with multicast, every college student in their dorm room, every person with an idea and the passion to share it could become a TV channel, and the number of channels would be as numerous as the number of Web sites on the Internet. But YouTube drastically changed that equation.

Being a television channel typically means transmitting content 24x7. It turns out that's a lot of time to fill and most college students and people with ideas/passion don't have that much material. They have video to share, but maybe just a few minutes of it each day. YouTube fit that role perfectly. For this reason, the number of NextGenTV channels isn't likely to approach the number of Web sites on the Internet.

However, there still are a significant number of potential sources out there who have enough programming to fill the day. High schools could show their sporting events and coverage of other extracurricular activities that might have large enough appeal to gather significant viewership from remote audiences (family, friends and other high school sports fans). When traffic and weather cams can deliver indispensible content to thousands at a fractional cost than what is currently available, you will see far more traffic and weather cams. International programming could provide enormous opportunities. Today, there might be a single TV channel available on cable/satellite to cover a country or region. With NextGenTV, there could be dozens.

In nations where the state controls all media outlets, the thirst for independent content sources is enormous. Here, the opportunity for NextGenTV goes well beyond adding banal content to the existing channel lineup; it could spark revolutions and change regimes. It's one thing to have Web sites and short YouTube clips available that shine a light on oppressive governments. It's quite another to have television channels broadcasting content continuously to the masses. The political and societal impact of viewing these previously unseen images on television screens will change the course of history.

Winners and losers of NextGen TV

With a television lineup that included potentially millions of channels, the most obvious winner would be the viewer. Viewers would enjoy brand new content that previously wasn't possible - grandparents could watch their grandchildren compete in sporting events thousands of miles away, immigrants could reconnect with their homelands, etc. However, viewers of traditional television would also be big winners.

Since the advent of cable television, consumers have always griped about bundle pricing. Cable TV providers act as a middleman between TV stations and consumers. Stations like ESPN and CNN charge the cable provider for each viewer capable of receiving their content. Cable providers pass that charge along to the customer, with some markup along the way. Cable providers also bundle a number of stations into packages or tiers. For example, if you want to subscribe to ESPN, you typically have to subscribe to a basic cable package that includes numerous other channels, like Lifetime Television. So no matter how little interest an ESPN viewer has in watching abduction-themed movie marathons, he will still have to pay for Lifetime when he subscribes to ESPN.

TV stations have always wanted to cut out the middleman and charge subscribers directly. To free themselves from unwanted bundles and tiers, viewers have sought to subscribe only to the channels they want. TV stations would also find that distributing their content to viewers over the Internet is far cheaper than operating the video distribution networks typically used today to bring content to cable providers.

At first glance, cable providers would be the obvious big losers in a world where they can easily be bypassed. A new beneficiary would be content aggregators. Today, companies like Google, eBay and Apple, using different business models, have developed a core competency to connect individual buyers/sellers of content/information/services/products. Companies like these could find a great opportunity to efficiently connect subscribers to the potentially millions of TV channels that could be available in the NextGen TV marketplace.

Cable providers could certainly attempt to provide this marketplace role. However, they are likely to find that their corporate DNA lacks the qualities to make this role a successful fit. Large cable providers/phone companies tend not to be strong in the area of creating innovative services and content. To be fair, very few companies are successful at this. For every Google, there's a dozen Hotbots; for every Hulu, there's a hundred Pixelons.

But failure in the NextGenTV space isn't inevitable for cable providers. They need not follow the path of obstructionism laid by the recording industry, where iTunes stepped in and dominated the online music distribution industry that was rightfully theirs. They need not fade from view slowly like the newspaper industry, unable to capitalize on the vast opportunities of online media. They need not stand athwart the train tracks of Internet history crying "halt!"

While cable providers and telephone companies tend to struggle in the area of creating innovative content and services, they do possess a strength and core competency in delivering this content and services in a scalable, reliable and economical way to a large number of consumers. And by providing the Internet connectivity of NextGenTV consumers - by owning the audience - they are uniquely positioned for new and creative revenue opportunities like ad insertion and content metering.

For example, it is undeniable that Internet connectivity is less reliable than typical cable television service. There are many reasons for this disparity, not least of which being that Internet connectivity between two points is only as good as its weakest link. ISPs can only control the quality of the links within their network, but can do little to affect what occurs beyond their borders. Thus, an ISP with an abundance of end users (i.e., cable modem/DSL providers) can offer TV stations like ESPN peering connectivity, a fancy term for cheaper Internet access, to sit closer to the end users and ensure a better, more reliable viewing experience for subscribers. This provides revenue streams from content providers as well as a differentiator to attract more residential broadband users. Contrary to popular belief, bandwidth/connectivity is not a commodity. When choosing between the cable company or the phone company for residential broadband service, being able to provide and demonstrate a better connectivity experience will make an impact in that decision.

Additionally, some video content has especially stringent requirements for reliability. In the 4th quarter of a playoff game 7, no viewer wants to see the dreaded ... "buffering"... One need only look at telephone service to find an analogous situation. For decades, telephony engineers have preached the need for 99.999%, or "five nines" reliability when it comes to phone service. This equates to 5.26 minutes of downtime per year.

While this may have been true for traditional wireline phone service, mobile phones have conditioned users to accept far less reliability. At times it may seem that mobile phone service delivers availability which is closer to "nine fives" than "five nines." People have grown to accept lesser voice quality and reliability for the fantastic benefits a mobile phone afford. However, while a mobile phone may provide all the functionality of phone service, relatively few people have totally abandoned the traditional landline at home. And if a mobile phone and a landline are both within arms reach and someone plans to remain within their house for the duration of the call, the landline will typically get used.

Cable providers can apply this lesson from the telephony world. Rather than fight the wave of NextGenTV, they can ride it with their well-equipped surfboards. Cable providers could offer a "hybrid" or "enhanced" cable box, which could support both traditional cable TV service along with Internet connectivity to deliver NextGenTV.

Viewers could get the best of both worlds - the quality, stability and reliability of traditional cable TV integrated with all the benefits and functionality of NextGenTV. This will require cable providers to adopt open and standardized interfaces for their equipment and cooperation, partnerships and interoperability with the leading content aggregators. And of course, cable providers will also need to cut prices and provide more flexible bundling options for traditional services in order to keep customers.

Again, telephony is instructive here, as telephone companies learned a decade ago that long-distance service needed to be cheaper in order to compete. Vonage looked much less attractive to consumers when domestic long-distance service rates dropped to near-zero. While this approach may sacrifice revenue streams for cable providers that have been safe and stable for decades, it does open the opportunity for newer and potentially more lucrative services.

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