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Viodi View Newsletter - May 31st, 2006

Click here to learn more about the C-COR Global IP Summit

By Ken Pyle, ken.pyle@viodi.com, Managing Editor, Viodi View

• Standards Are Important, But Are They Enough?
• IP Differentiator for Bundled Services
• Ok, Maybe MPEG-4 Won’t Be a Myth……
• Home Network Developments
• Television over the Internet……A Few Mini-Reviews
• Flash Can Impact Everything…..
• A Few Snacks from Last Time…..
• The Korner - Psst – Pass It On…….

It seems like the deployment of technology is so often like the fable about the little boy who cried wolf. There are often grand pronouncements about a technology, but it takes seemingly forever before there are real customer deployments. In some cases, like ISDN, the technology never reaches the critical mass that early proponents suggest. From my perspective, MPEG-4 in the context of IPTV has reached the point where the only way I will believe its real and not a myth is to see significant numbers of subscribers using an end-to-end MPEG-4 solution. And I am not alone, as the other day an industry expert suggested to me that 2007 would finally be the year of MPEG-4 ( I think 2004, 2005, 2006 were also supposed to be the year of MPEG-4).

Standards Are Important, but Are They Enough?

MPEG-4 may simply be a symptom for the bigger challenge of deploying IPTV in a widespread fashion. It could be argued that the lack of an organization, like CableLabs, is hindering the rollout of IPTV. ATIS’s announcement last week regarding IPTV specifications is a good first step, but is it enough? Can the telcos learn anything from the cable industry and its success in rolling out new services? Click here to read some thoughts on this topic and an idea for independent telcos to band together to push the industry along.

IP Differentiator for Bundled Services

One of the key messages from Deepa Iyer of Parks Associates is that telcos have the opportunity to use the open nature of IP as a differentiator over cable and satellite competitors; to create customer-centric services instead of network-centric services. She delivered this message in last week’s webinar, The Business of Bundled Services. Iyer mentioned that operators have the opportunity to become, “the digital store manager for consumers.” In that sense, the digital pipeline provided by the telco and cable operators becomes much more than a triple or even quadruple play, as there are many new services, such as home monitoring, that will become integral parts of an offering.

Continuing to add new services that reduce churn and maintain Average Revenue Per User (ARPU) will be key moving forward. Iyer suggested that the typical triple play bundle provides subscribers with 16 to 20% cost savings, which provides is a major motivator for people to subscribe to bundled services (quality & customer service rounded out the top three, followed by integration on one bill). Iyer pointed out the importance of the wireless component to service providers’ offerings going forward. Parks Associates suggests that the ARPU for triple play services will be $167 and $213 per subscriber per month by the year 2010.

Ok, Maybe MPEG-4 Won’t Be a Myth……

Maybe the commercial introduction of MPEG-4 is closer than suggested in the introduction to this issue. Cavalier Telephone’s announcement last week that is had begun rollout of an MPEG-4 based television system is a good sign for the industry. According to their web site, they are taking orders for service that provides a bundle of telephony, long distance, high-speed Internet and television (to two television sets). Priced at $105.95 for the high-end bundle, it is very competitive with cable offerings. It still lacks the Personal Video Recording and High Definition options available from satellite and cable, but they do offer VOD as part of their base offering, which is another differentiator as it allows every subscriber to subscribe to VOD.

Home Network Developments

One of the long poles in the MPEG-4 tent has been the lack of set-tops MPEG-4, IPTV set-tops. I found the press release from Entone regarding their announcement of a new series of High Definition set-top boxes to be intriguing because their new boxes have the potential to support MPEG-4 in an IPTV environment, as well as MPEG-2 in HFC networks. The other challenge for operators has been distributing signals around the home. Both Entone and Zhone made announcements regarding Network Interface Devices designed to improve the on-going operations aspect of IPTV. Click here to read more about the latest offerings from these long-time proponents of reusing existing home wiring for IPTV deployments.

Television over the Internet……A Few Mini-Reviews

A few weeks ago, my wife discovered the importance of a dual tuner PVR, when she discovered that the next to last episode of Desperate Housewives (DH) had been a lower priority to VH-1’s Surreal Life and, consequently, DH had not been recorded. Desperate to see the episode prior to the season finale, I explained to her how we could download it from iTunes and pay $1.99 for the privilege. For whatever reason, iTunes didn't work on my PC and we were not able to download DH.

Fortunately, ABC.com has DH available as an Adobe Flash 8 streaming video. After 5 minutes of making Rube Goldberg-like connections between the lap-top and the living room television, we were able to start viewing D.H. Unfortunately, the warning that suggested that 500 kb/s minimum was required proved to be too true. We would receive maybe a minute of video followed by a frozen image. After hitting the refresh button, it would start after another minute or so. In the end, it probably took us about two hours to watch approximately 45 minutes of content.

What was interesting is that there were online-specific advertisements that ABC had embedded in the program. Overall, there were fewer advertisements than what would have normally been seen. I believe if we would have had a higher bit rate connection, the experience actually would have been comparable to television (the image quality was quite good). Even with the poor reliability of the link, the compelling nature of the content kept us watching.

With a download model, Starz’s Vongo provides another potential way to view television content on the PC or, with the right connections, on the television. I saw one of the best (maybe only) commercials for an Internet -delivered video service while watching the Donny Deutsch show a week or so ago. In clear and plain words, the spokesman explained the benefits and the ease of using Vongo. It offered some neat features such as download to multiple devices and a fixed price of $9.99 per month for a variety of major studio releases. The commercial hooked me.

The first bit of disappointment was the “free 14 day trial” required me to enter a credit card – never a good thing, as it is too easy to forget about the subscription. Reluctantly, I entered my credit card information as I felt obliged to do so for the benefit of the Viodi View readers. I downloaded the software and started to browse through the content. I tried downloading both old movies and new movies and every time I would receive a message suggesting that I sign up for the service, which I already had done.

The bottom line is that I never was able to download anything and, in the process, spent way too much time trying to make the service work. This is the sort of experience that frustrates consumers and makes them skeptical of new whiz-bang Internet offerings.

Flash Can Impact Everything…..

Flash, both the streaming video kind from Adobe, as well as the proliferation of low cost memory that is creeping into just about every device imaginable will have impacts on IPTV and VoIP in ways that no one expects. For instance, Marty Lafferty of the DCIA just reported on a new USB Skype phone that uses Flash memory and an embedded Skype client that allows it to be plugged into any computer without the need for downloading the Skype client to the computer, virtually allowing for free calling from anywhere. Alan Weissberger recently attended an IEEE Magnetics-Consumer Electronics seminar where Dr. Eli Harari, CEO of SanDisk, spoke about current trends and applications of Flash memories, which could have impacts on the devices that are used for all sorts of services over IP. Click here to read his report.

A Few Snacks from Last Time…..

Alan Weissberger updated his earlier article regarding the evolution of mobile networks to a wireless Next Generation Network. Click here to read Allan’s insight in this exclusive report on the presentation provided by Cisco’s Larry Lang on this important topic.

The Korner - Psst – Pass It On…….

The title of the email read, “Missing 13 year old girl..........”. Since it came from a friend, I instinctively opened the email. As I read through the email, something triggered my suspicion about the truthfulness of what I was reading. Not having the time or the brain cycles left to figure out what was wrong with this email, I went to www.snopes.com; also known as the “Urban Legends References Pages”. Sure enough, Snopes confirmed the story was a myth.

The Snopes web site, which has been around in some form since 1995, has become the definitive source for determining the validity of “urban legends”, both old and new. With a revenue stream that only comes from advertising and the occasional donation, snopes is clearly a passion of the two person team of Barbara and David Mikkelson. One thing that differentiates Snopes from the emails that it debunks is that it provides background on each story, as well as linked references to help a reader do their own research.

And there is a true cost to hoax emails, chain letters and spam. One web site, Hoax Busters, shows how chain letters can quickly turn into millions of useless messages and tens of millions of dollars in lost wage productivity, while serving as gateways to destructive viruses. Besides Snopes, there are a number of other resources that an individual can use to determine the validity of a particular email, which are highlighted at this page.

http://hoaxbusters.ciac.org/HBOtherHoaxPages.html

As society becomes more dependent on the Internet for information, web sites that provide unbiased and accurate information will be increasingly critical to prevent the Internet from crashing under the weight of a virtually infinite number of “news” sources. If they haven’t already, independent telcos should help their customers educate themselves by linking to these sites and informing their customers why they should not pass on bogus emails. Independent telcos that want to use portions of or this entire article for their newsletter or web site, please let us know and we will grant permission.

By the way, send this issue of the Viodi View on to 10 friends and it may not bring you good luck, but maybe it will bring Viodi good luck. :)

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