‘Just get it working properly’ is key to successful IPTV eco-systems, says Mathieson
At NAB2008, Andy Mathieson, director of Latens Systems, which supplies a software-based IPTV conditional-access solution to prevent piracy, was seated relaxing on one of the park benches in the aisle of the central hall of the Las Vegas Convention Center as IPTV Update approached.
His calm demeanor served as a sharp contrast to his underlying message. The IPTV market has been experiencing some tumult as vendors promise technology that fails to arrive on schedule. Such delays, while nothing new to vendors, haven’t made things easy for operators.
One has been the slower-than-expected rollout of MPEG-4 based solutions, he said. Another is the tight integration of conditional access, middleware and PVR functionality required in set-top boxes. With a large and growing number of possible partners, Latens has embarked on a strategy of honing the list to get the biggest bang for its engineering dollars. Rather than attempting to integrate solutions from everyone, the company has chosen to integrate a limited number with the aim of producing solutions that work properly.
This week’s IPTV Update interview was conducted on that park bench as Mathieson reflected on what’s necessary to make an IPTV eco-system consisting of disparate pieces a reality. Additionally, he shared some thoughts on how over-the-top video fits into the future.
IPTV Update: What was your message to the audience at the MPEG Forum prior to NAB?
Andy Mathieson: I spoke about Internet TV and the effect it will have on telco TV, IPTV. A lot of futures were spoken about, and everybody was talking about “go where the money is.” The problem was no one could see where the money was for Internet TV.
I really wanted to make the point that we are still at the stage of, “Let’s make pay TV work for these operators,” which really hasn’t happened yet properly in the IPTV market in the U.S. Let’s give them real pay-TV functionality — advanced MPEG-4 HD PVRs, home networks and so on — before we rush off to all of the esoteric fancy new business models that are coming. They will come, but they are going to take a long time to come, and we need to help our customers make money in the here and now. That was really the message behind what I was giving.
IPTV Update: What are some of the challenges that are being faced by the “here-and-now” customers in the United States with their IPTV deployments?
Andy Mathieson: I think there have been a number of technology delays, so everyone has been waiting for MPEG-4 HD. HD is essential. If you haven’t got HD, you haven’t got a tick in the box. You’ve got to have it. Everyone else will have it. You’ve got to compete with DISH, DIRECTV and so forth. Getting the systems working has been a real challenge, getting the integrations working for people.
We’ve got over 60 customers with our partner Minerva in the U.S., and you can see from the installation time to getting these systems actually growing subscribers, there’s quite a long lag. It’s a number of issues; it’s integration issues primarily, not just making the systems work. The partners have to work very tightly together, keep the number of partners in the eco-systems quite small, and work step-by-step to make that work.
We’ve been doing that with Minerva, and here at NAB we’ve launched with EchoStar. EchoStar is another partner with their headend in the skies for IPTV operators. They’re providing another important piece of this, which is real high-quality content in volume with HD and a great brand on it. So we’ve put together another eco-system with them to help them deliver those services. Again, it comes as a pre-configured, cookie-cutter, working system. Although what we’ve got could be configured in many, many ways, we’ve restricted it to say, “Guys, if you do this, you’re going to get a turnkey system. It’s going to work. It’s going to work with these particular set-top boxes, and it’s going to work with these selected facilities with customization of particular local services, but making the core of the TV system work properly to get the quality of experience for the subscriber.
IPTV Update: It seems like one of the factors, as you’ve identified, that has impeded the rapid growth of the IPTV market is this whole integration issue with multiple vendors. What’s been your experience with the smaller operators and do you see this getting solved as integrated solutions come online?
Andy Mathieson: I think what we’ve seen over the last two to three years is lots of vendors talking about their products and how great they’re going to be, and everything is late, as you would expect if you are in the business, but not if you are the customer.
Especially with the set-top world, it’s been difficult. Each integration you do with the middleware, the CAS, has been difficult, very expensive, testing it through and getting it really working — especially with PVRs, getting everything working right down to the 100-percent encryption.
Nobody wants to pay for that integration. The customer wants things cheaply, and each partner doesn’t want to pay for it. The fact is the costs are very, very high. We’ve had to migrate away from saying we’ll work with absolutely everybody and anybody, get those costs out of the system, pick two or three partners in each area and just work step-by-step with them so we can afford to integrate and keep the thing moving forward with the advanced functionality the customers are going to need.
At any given time, we’ve probably got 15 different set-tops who want to integrate with different kinds of middleware and our conditional access. The engineering for that is simply massive. There was a case last year where we did an integration for a particular customer. They persuaded us we had to do it. I think it probably cost us about $200,000 in engineering time and tools. I think we sold 400 client licenses before that set-top was withdrawn from the market by the STB vendor.
You look at the volumes you have in the market, and everyone is saying, “I’m going to sell lots and lots.” The fact is they are not all going to. So you have a customer saying, “I want this particular set-top.” He’s going to buy 500 of them to start. So the middleware guy’s got to integrate; the conditional-access guy’s got to integrate; the set-top vendor’s got to do these integrations with us. It just doesn’t fly in this market.
So, for the U.S. IPTV market, we’ve partnered with Motorola and ADB and Amino — just two or three people — and said we’ll work step-by-step with them on current functionality and especially future products and roadmaps. Don’t try to go with every STB vendor; just get it working properly, and even that has taken time. If you want quality of experience for the viewer now and in future, those are the kind of things you have to do.
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