Microsoft TV enjoying Tier-1 deployments

Interview highlights:

* Company claims end-to-end responsibility, total cost of ownership and focus on ‘Better TV’ are behind its success among some of the world’s major telecoms carriers

* Highly integrated video System on Chips will reduce cost of high-end IPTV set-top boxes dramatically; could also put IPTV direct into television sets

* Vendor now putting resources into network PVR, having previously ignored this feature set due to “lack of demand”

* TV platform approach, as opposed to best-of-breed, is not an attempt to dominate supply chain - just a business necessity

Microsoft TV -- accused by critics of delivering Powerpointware rather than working products over the last couple of years -- finally has some commercial deployments of its IPTV Edition middleware to point to in the form of AT&T (U-verse TV) in the US and now T-Online France (Club Internet) in Europe.

The company is in confident mood after a succession of Tier-1 telecoms carriers have backed their vision of 'Better TV' and opted for what was, until recently, an unproven television platform. Germany's Deutsche Telekom and the UK incumbent BT have both signed up with Microsoft TV for their pending IPTV roll-outs, while Telecom Italia is another high profile customer.

END-TO-END SOLUTION

According to Hemang Mehta, product management director at Microsoft TV, these Tier-1 operators chose the company for a number of reasons, one of which was the fact that they were offering an end-to-end solution where one vendor was ready to take full responsibility for the delivery of television services.

"When we entered the market it was pretty fragmented and with Company X providing the video server and Company Y providing the middleware, and Company Z offering client software, and for most broadband service providers building an IPTV system, it was like solving a jigsaw puzzle. The approach we have taken is to offer a TV platform. 

"Ours is a business-centric approach. If you have multiple vendors and there is a problem at any stage, who would someone like AT&T call to fix it? It would be like calling a joint session of Parliament. The biggest stake we put in the ground was that this is a television platform, and if the television goes wrong we will be right there."

BUSINESS ASSURANCE

In an age where open, best-of-breed solutions are the favoured strategy in the cable and satellite industry, Microsoft TV is bucking the trend with its IPTV solution. Some view this as another example of Microsoft attempting to dominate an industry but Mehta says it provides the business assurance Tier-1 telcos are looking for.

"We did not begin with a notion that Microsoft is going to do it all," states Mehta. "Clearly we have to integrate with encoders and with middleware components, metadata and ingest technologies, Digital Asset Management systems, and we need to work with different set-top box vendors. But if something goes wrong, the operator has to call one person."

This, says Mehta, had a substantial impact on Tier-1 operators.

BETTER TV

Microsoft TV says another major factor behind the company's success with Tier-1 carriers is the focus on delivering better TV. "We decided in 2003 that we would ensure a better television experience for the user," Mehta adds. "The television services we support had to be such that most consumers will subscribe to that television service because it is better television - not because it is IP or because you can throw a gambling application on top.

"Part of the reason for our success with Tier-1s is that we are strongly focused on the user experience, on how the television services are presented to subscribers. The biggest challenge most broadband service providers often face is how to ensure theirs is not 'me-too' television; how to differentiate themselves in the market.

"The TV experience has to distinguish itself. The best application for television is television. We spent an inordinate amount of time researching the issues involved."

INSTANT CHANNEL CHANGE

As a result of that research, Microsoft TV has pumped resources into developing instant channel change, picture-in-picture (PiP) and enhanced user guides, including an EPG where screens expand (very quickly) outwards from a focal point in the centre of the screen, which gives the graphics depth.

In demonstrations, Microsoft TV is able to show very impressive channel change times (almost instant) and, if replicated in the field, these would be noticeably better than digital cable and satellite. Ironically, instant channel change has been highlighted by some IPTV providers as a key requirement in markets where they are competing not against advanced digital TV platforms, but against analogue television, which has always had instant channel change.

PICTURE-IN-PICTURE

Picture-in-picture (PiP) is also an interesting application, allowing consumers to browse channels on a smaller, overlaid 'screen' while continuing to watch their main channel. The ability to create PiP versions of a channel - basically a low-resolution, smaller mimic of the main channel that is broadcast - is now a key feature of advanced encoders. These encoders are working on the basis of one channel feed in and a full-resolution and PiP version out. It is fair to say that the current emphasis on PiP among encoder vendors is being driven by the needs of IPTV providers wishing to use IPTV Edition.

These two features, together with video mosaics in the programme guide (thumbnails showing live feeds of the channels available), will give IPTV operators a window of opportunity during which they may be able to market these as unique features, although PiP and mosaics are possible on cable and satellite too.

TOTAL COST OF OWNERSHIP

Another significant factor that drew Tier-1 operators to Microsoft, according to Mehta, was the total cost of ownership. "Major IPTV providers are interested in how they deploy these services and how many servers are required, whether the system is scalable and whether it meets their business model," he declares.

This is actually an area where critics have been kicking Microsoft TV, claiming that they employ too many servers in the network per user, but Elena Branet, senior marketing manager for the company, claims they have missed the bigger picture and focused on particular parts of the network, like VOD, when they should be taking into account the cost of running an end-to-end platform that manages everything from content acquisition and metadata to rights management, subscriber management, service management and client (i.e. set-top box) middleware.

"You have to look at the total cost of ownership. AT&T and companies like them don't make these decisions lightly," she states.

As always, customer orders and deployments make all the difference in a marketing campaign, especially for a technology that, to most people, represents a black art.

NETWORK PVR
One significant piece of work Microsoft TV must now tackle is network PVR. Their software platform does not support this application today, meaning operators using IPTV Edition have no choice but to deploy set-top box based PVRs if they want to offer time-shift, PVR services. 

Mehta says the exclusion of network PVR was a design decision, taken in 2003 when the product roadmap was defined, that reflected the fact that operators then were not expecting network PVR to be realistic by the likely date of their planned launches. The complex rights issues involved in network storage mean this has turned out to be largely true.

However, rights issues for network PVR are starting to be addressed, with an increasing degree of pragmatism on the part of content producers, channel owners and network operators alike. And Shanghai Media Group (SMG) in China provides an example of what is possible when rights issues are cast aside, running a 50-channel network PVR system in Shanghai, China, today.

SMG owns around half the content on its TV-over-DSL system (BestTV) with most of the rest supplied by China's national broadcaster CCTV. So consumers have access to all 50 broadcast TV channels via a backwards facing EPG (Electronic Programme Guide).

Microsoft TV says it was aware of the desire for network PVR in China, in particular, and says it has just "signed up" some Chinese operators knowing that nPVR will be important to them. "We shared our plans for this feature with them," states Mehta.

There is no design or architectural reason why IPTV Edition does not support network PVR and, according to Mehta, it can be added as a software upgrade. "We are dedicating some of our development resources into this feature," he adds. However, the company was not willing to discuss timeframes for the introduction of this solution.

Network PVR can include a number of services that Microsoft TV views as distinct. These include: all broadcast TV content recorded in the network all the time, and made available for a set period afterwards [what we would define as true network PVR]; the operator picks and chooses which programmes from the schedule to make available after the event [what we would call Replay TV]; and the ability for users to rewind to the start of a programme [what is being referred to as 'Start-over TV' and is really a limited version of network PVR].

The fourth sub-category recognised by Microsoft is where physical network storage is set aside for each subscriber, so that, in effect, an in-home PVR hard drive is replicated in the network. This differs to the usual architecture (which is likely to be applied in most cases above) where centralised servers record content that is then shared by many. This last sub-category was proposed by the US cable operator Cablevision but is being held up by rights disputes with content owners.

Microsoft TV says it will treat these as separate features since they have very different impacts in terms of capital and operational costs. "We are looking at them as four different things," confirms Mehta.

PROVING SCALABILITY

With commercial deployments of IPTV Edition now underway, the pressure on Microsoft TV to prove it can deliver has eased - for the time being. The company still has to prove that the system is scalable, and scalable in a cost-effective way, but that is something that is also true of most other IPTV middleware/software/platform providers.

Two of the largest IPTV systems in the world today - PCCW with over half a million subscribers in Hong Kong, and Spain's Telefonica with over 200,000 subscribers - used middleware platforms that were developed in-house. These have been shown to scale but most third-party vendors still have to prove their ready-made solutions can do the same.

Thomson/Thales is one exception thanks to its involvement in France Telecom's Orange TV (formerly MaLigne TV) service in France, which had 306,000 subscribers as of June this year.

TIME TO MARKET

Other Microsoft TV customers should benefit from the experience that is learned during the process of commercial roll-outs. Time-to-market on big projects may improve - an area where the company has also faced questions.

On this subject, Microsoft TV  claims that the sheer ambition of the projects it works on (like AT&T deploying a national network) makes it understandable that things move slowly. "These companies are serious about rolling out their services to almost everyone and there is a certain amount of infrastructure testing," says Mehta.

"You could say it has taken two years to get to this stage [i.e. commercial roll-out with some Tier-1s] but when you look at it in terms of what people are trying to achieve, in transforming their business, that is fast for most broadband service providers."

Microsoft TV says it has also put a lot of effort into developing an ecosystem of encoder vendors, silicon vendors and others who can support the IPTV Edition platform, with new and advanced video System on Chip (SoC) processors being among the technologies that have been worth waiting for.

ADVANCED VIDEO SYSTEM-ON-CHIPS

Microsoft TV has worked closely with Sigma and STMicrosystems in particular to help bring a new range of SoCs to market that combine CPU, memory, decoding, and network functions, providing advanced functionality with a reduced bill of materials. Once set-top boxes are deployed widely using this technology, the SoCs are expected to reduce receiver costs dramatically.

Mehta estimates that advanced set-top boxes (like those with hard disk drives, advanced decoding {i.e. AVC or VC-1} and HDTV support) will eventually be two-thirds of the cost (or less) using the new generation SoCs compared to traditional set-top box designs.

These SoCs are not exclusive to Microsoft TV and do not have a 'Microsoft-ready' stamp on them, but do match the ambitions the company has for deliverable services using the IPTV Edition platform. Operators deploying today with the current generation of set-top boxes or PVRs can introduce these SoC based devices seamlessly, the company says.

Importantly, Microsoft TV seems to see the SoC as the foundation stone for IPTV on multiple client devices, and not just set-top boxes. Mehta points to the fact that this SoC could be included in television sets themselves, for example.

INTERESTED IN SMALLER OPERATORS

Microsoft TV's success among Tier-1 operators, and its obvious focus on this segment of the IPTV market, has left an impression that the company is not chasing Tier-2 or Tier-3 business. The company says this is not true and that it has time to take new, smaller operators onboard today.

Microsoft TV says IPTV Edition can be used for small networks without adjustment (there is no need for an 'IPTV Edition-lite').

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