Phil Corman, director of worldwide partner development for the Microsoft TV Division, went to NAB2006 with a simple message: now is the time for IPTV.
IPTV deployment will happen on a broad scale over the next nine to 12 months with Microsoft taking a leadership role as it organizes and leads an “eco-system” that will provide the critical components for telecommunications giants like AT&T, British Telecom and Deutsche Telekom to roll out IPTV services.
IPTV Update caught up with Corman a few weeks after NAB2006 to learn more about his view of where IPTV is and where it’s headed.
IPTV Update: Please address the opportunities and impediments Microsoft has identified in the deployment of IPTV – particularly in the United States.
Phil Corman: 2006 is the year IPTV becomes a reality. Three of the top telcos in the world will be deploying the Microsoft TV IPTV Edition platform in the next nine to 12 months. AT&T will be one of them. So the real opportunity for Microsoft and the industry, as well as the IPTV ecosystem, is really quite simple – make IPTV a success.
Now that the technology is ready to deploy, the real question is how it gets marketed, and what the enticing factors are for subscribers to want to shift. So marketing is a huge opportunity.
Microsoft TV IPTV Edition will provide better quality television, and subscribers will notice that both standard definition and high definition quality will be better than cable and satellite. We are working with the leading encoding providers, such as Harmonic, TANGBERG and Scientific-Atlanta, to make that happen.
If we do side-by-side comparisons between current MPEG-2 compression and the new open standard H.264, the difference is huge. Our partners showed the quality of H.264 compressed content at NAB and demonstrated that the difference is not subjective anymore.
Once the consumers begin to subscribe to IPTV, the real opportunity for both service providers and Microsoft is to start to leverage the new kinds of television models that you can deploy. For instance, we have instant channel changing, which is a huge improvement over what satellite and digital cable can do today.
Another important feature is what we call multi view, or the ability to show multiple pictures within one TV screen. Right now this functionality is an attribute of the hardware. Today, you can get this only if you buy a high end $3000 plasma set. With IPTV, it is part of the service, so every TV from a $3000 plasma to a $300 standard TV has multiple picture in picture.
This means that the leading content providers – the broadcasters and the studios – can create new kinds of programming because every single TV will have that capability. Take the Olympics for instance. I want to watch only parts of it and only parts of it live. This multiview capability enables all of the TVs to have a mosaic of six recorded Olympics events, while at the same time, you do not miss the competition that is going on live. So it’s kind of the concept of networked PVRs, if you will. Clearly, IPTV will redefine television.
Another example of how compelling IPTV is, is news. As you know people will glue themselves to the TV for late breaking news. With an IPTV multiview you can have three or four of the news channels you trust, and when you finally see something that is relevant to you, you click on the remote and you’re getting it right now.
Let’s take a look at another example. “Lost” is a unique show, and is the No. 1 downloaded show because the plot is a puzzle that makes you watch the show on multiple levels.
You can watch “Lost” and just sit back and be entertained by the storyline, or you can freeze frames and look at the name of the book on the top of the piano, because the name of the book is going to give you another clue. If you didn’t have a PVR and didn’t have the ability to freeze a frame, you would not get that clue. With IPTV, you create an environment where you not only watch “Lost,” but you can also have your own community. You and your buddies can freeze it and say, “What do you think is happening right now?” We’re talking to each other in the same way that you do with X-box Live today. The content provider now has the ability to build buzz and generate more viral marketing.
As far as impediments are concerned, we are technically ready to roll with AT&T, British Telecom and Deutsche Telekom. We have solved the technical hurdles that every new technology and market must overcome. The really hard part is behind us.
Once the AT&Ts and British Telecoms and Deutsche Telekoms get to 3 million subscribers, we need to be ready to reach the next level of scalability. To that end, we have expanded our ecosystem. We are working with leading server providers like HP and IBM, who are working with us to drive the performance and configuration for carrier-grade servers, for instance. Once we deploy here in the next short period of time, our focus will be on making sure we’re ahead of the scalability requirements.
IPTVU: From a user’s quality of experience point of view, can TV over DSL lines in an IPTV scenario deliver the response today’s television viewers expect? If so, what steps have been or are being taken to make the experience of channel changing – for example - the same as with a terrestrial broadcast or cable systems where all the channels are there and retuning is nearly instantaneous?
PC: Instant channel changing can be done on the bandwidth service providers are allocating today, which is approximately 25Mb/s and greater. With modern compression, standard definition takes a little over 2Mb/s, while high definition before the end of the year will be down to six. If you do the math, 25Mb/s is enough to support four high-definition streams or some combination of a lot of SD and HD. All subscribers will have instant channel change. That’s important. You’ll never see an hour glass between channels ever.
Microsoft is also enabling instant channel changing when you go from a live broadcast to a PVR show or to video on demand. That’s important too when you think of advertising. When you flip over to an ad, you also want it to be instant. You can’t have a black screen or a blue screen for a second. This is TV; it’s not a PC. IPTV is a very different experience than broadband video, which is a best effort service. You’re not necessarily going to get the stream instantly. You’re not going to be promised that you’ll not be interrupted. You might have to even download it and watch it. That’s not what we’re about.
IPTV is a real television service. It’s also about integrating other devices into the experience. Once IPTV is deployed you would be able to engage other devices in the home for a seamless connected entertainment experience.
Another future scenario or vision is to have IPTV-enabled devices, without set top boxes. It would be possible to put that system on a chip that is currently in boxes in any device. If a college kid had a game platform, he or she could take advantage of IPTV in addition to enjoying what a gaming platform can do. You also reach the demographic that may be harder to attract with traditional “uncool” TV. IPTV is about embedding the experience and making it a lifestyle thing.
IPTVU: How would you envision the relationship between telcos and local broadcasters developing in the coming months and years to maximize the benefit to both?
PC: Obviously, IPTV enables them to expand the local news, weather and sports they provide because you do have a virtually unlimited number of channels.
You could offer more local sports. In Texas, high school football is big, but right now it’s not economical to put it onto a cable system or satellite system. With IPTV, it makes all of the sense in the world because the cost is incremental.
The local government channel is typically incredibly boring. But now if you could bring local government and local politics not only into the home but enable everybody who’s at home to participate live, ask questions of the city council, vote in real-time, you suddenly have citizen participation.
There are also new advertising opportunities. Unlike satellite, IPTV is two-way. We have the ability in real time to provide two-way experiences. It could be something as simple as voting in the town meeting you’re watching if you’re in the audience. It could be something where a more complex thing is sent to you via broadcast, you complete it and respond. It ultimately actually could be two-way video. You could imagine where you simply turn on your camera in such a way that when you talk now at this public forum, your picture is broadcast. This unlocks a whole area of television experiences that I think the local broadcasters could begin to take advantage of.
Omens that PVR and IPTV mean the death of advertising and that IPTV is the death of local broadcasting are untrue. IPTV opens up the opportunity for unlimited programming for things that didn’t make economic sense that now do. People could either buy to view this niche content or select advertising-sponsored options that allow them to get the content for free.
IPTVU: IPTV holds out the promise of tremendous interactivity with viewers. Could you describe how Microsoft envisions marketers taking maximum advantage of this new interactivity – especially in a time when PVR/DVRs make it easy to zap commercials? What sorts of software tools will be required to bring this type of interactivity from a point where it’s really a one-off event and place it into the mainstream?
PC: IPTV brings a lot if interactivity, but we need to be careful here. TV is a “lean back” experience, and we need to make sure that the vast majority of viewers can sit back and watch TV. They don’t have to interact with their TV, but if they want to they have the option.
You can set up your own parameters. For example, on sports you can watch multiple games, or time shift. You can set up notifications. “Hey, I’m not watching the Barry Bonds game, but if he comes up, automatically pop up another window because I don’t want to miss him break Babe Ruth’s record.” You don’t have to keep surfing.
Enhanced TV is where you are interacting with the live broadcast, where you might be playing along with the game, where you might be clicking on for supplemental information or background on what you’re watching. Or you might want to buy something.
IPTVU: You’re alluding to hot spots on advertising.
PC: Absolutely. I can only make this a personal experience. I was watching “Scrubs” a few weeks ago, and I heard a song on the show. I hated that they didn’t tell me who the artist was, so I listened to some of the lyrics, and when it was over, I got on the Net, did an MSN search, found it, and downloaded it. That’s baloney. In IPTV, you should be able to hit the “red button” and up comes “The song playing is X by artist Y. The shirt that this guy’s wearing is made by X and sold by Y.” You click on that and you have another form of interactivity. It’s television commerce.
Advertising is even more exciting. You want to buy a car. The truck ad comes on and if you look at truck ads they’re always about a bunch of guys looking at throwing lots of junk in the back and driving over big rocks and through mud. Wouldn’t you love to be able to say, “That truck looks really interesting to me. I’d like more information?” You automatically pause the program you are watching and have the ability to go a little bit deeper on that Ford or that Toyota truck commercial.
You see the engine options, the suspension options and at the end of that have a $2000 coupon for a Toyota dealer 3.7 miles away from where you live. With your permission, IPTV can send it to that Toyota dealer. And if you go in the next seven days you’re going to get $2000 off the truck.
The best part is that when you were done doing that long form ad, you can go back to your programming, and you haven’t missed anything because it was PVR-ed for you. Advertisers are looking for impulsive buys, and IPTV makes impulsive buying decisions a little bit easier.
IPTVU: Do the tools exist to do this?
PC: We are working on those tools right now. Fundamentally, the platform supports it today. The thing we need to do is first deploy the software. Every single IPTV client has these multiple pictures in pictures, every single client has PVR built in.
Ultimately, IPTV enables everything to be on demand. I can’t really tell you where we’ll go, but in an on demand world, the whole concept of channels becomes a little fuzzier. It moves the writers and producers potentially closer to the viewer, and it’s already starting to happen. Today “Lost” sends you the Web site to get three extra minutes of some more clues. A lot of viewers go to the Web site to get it. With IPTV you will not have to go to the Web site. You’ve got all of your friends there, you’re already in the community. You should be able to pop it up and view it. Interactivity is built in. Or, you can just turn the TV on and find what you want to watch and watch it now.
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