Global Insight Perspective | |
Significance | Microsoft has relaunched its IP TV platform under the Mediaroom brand, drawing a line under initial problems with its IP TV service. Motorola has also announced that its IP TV set-top boxes will utilise an open application platform to encourage third-party development. |
Implications | Both parties are making similar moves in the set-top box space as the focus moves towards providing an effective platform for application development that will differentiate their own products and facilitate the deployment of applications that differentiate service providers’ offerings. |
Outlook | The U.S. set-top box market is set to change significantly from 1 July 2007 as access control and security functions are separated. Fully open application platforms could alienate existing clients—the cable TV service providers—but help penetrate the retail market that will burgeon following the regulatory change. |
With the blame for delays to AT&T's U-Verse service deployments laid partially at the door of the Microsoft IP TV platform hopefully now in the past, Microsoft has announced the relaunch of its IP TV software platform—now re-branded as 'Mediaroom' (see United States: 8 May 2007: AT&T Bumps Up U-Verse Investments). The new name reflects the platform’s capabilities for multimedia storage and content-sharing from PCs around the home (music, videos and pictures), as well as advanced TV services, such as multiple picture-in-picture displays, integrated digital terrestrial TV support, and a multimedia application environment for interactive and advanced applications. The Microsoft Mediaroom Application Development toolkit was also released to provide third-party developers with the tools to create new services that can run over the platform, such as video-on-demand portals, casual gaming, and interactive TV services.
Sichuan Changhong Electric Co has also announced a deal with Microsoft, with the software powerhouse investing US$12 million to acquire just under a 1% stake in the company, reports the Associated Press. The strategic investment is part of a deal to explore "a wide range of scenarios for digital entertainment need". However, the focus is very much on the same area as elements of the Mediaroom platform—in home networking connecting PCs, TVs and the internet, according to Microsoft spokesman Roger Chen.
Motorola has also made a move in the IP TV set-top box space, announcing today (19 June) that it is launching an open internet protocol platform on the VIP 1200 series of high-definition capable set-top boxes. The KreaTV application platform utilises Linux OS to support entertainment and video service applications. This helps service providers and other third-party developers to customise the system and roll out new revenue-generating applications using development kits and toolsets for the platform. This will enable the creation of programming guides, voting tools and gaming services. The software platform will also support multi-room Digital Video Recording, video-on-demand and interactive teleconferencing. Motorola has made a number of acquisitions to enhance its moves into networked video and the set-top box market to develop the vision of seamless mobility (see World: 18 May 2007: Motorola Acquires Modulus Video).
Outlook and Implications
IP TV introduces a high degree of service flexibility to the television platform, blurring the lines between the PC and the TV as it is essentially reading and converting an IP data stream. The software embedded in hardware can be easily upgraded, and the applications and services running on the hardware become more significant differentiators. The issuing of software developer kits and open platforms will allow service providers to leverage this flexibility to produce differentiated services, while also opening up the ecosystem to third parties who can produce potentially innovative services.
Service providers have traditionally been the gatekeepers to the TV experience, but this is set to change in the United States, with the FCC due to enforce a ruling that TV service providers will be required to separate the access control/security functionality from the set-top box functions from 1 July 2007 (see United States: 1 December 2006: Delay Requested On FCC's Set-Top Ban). This has caused problems for a number of service providers’ plans, but the FCC has shown no signs of moving from its strict position, with Verizon still arguing that differences in its network design are problematic for the implementation of existing solutions targeting the cable TV industry (see United States: 11 January 2007: FCC Rejects Comcast Waiver on Freeing Set-Top Box Market and 8 February 2007: No STB Waiver from FCC Could Cause Problems for Verizon). Verizon currently uses a hybrid network with a cable-like QAM TV solution and IP TV-type services used for video-on-demand - for which Chief Technology Officer Mark Wegleitner announced yesterday that the service is ready to move to high definition.
The separation of security from STB functionality should make it easier for users to buy set-top boxes that have more open access functionality, allowing them to bypass the service providers' portals, potentially installing applications and accessing content through their TV that is not revenue generating for the provider. Open platforms and software development kits, as announced by Motorola and Microsoft, widen the gaps in the service providers’ defences as they attempt to maintain the differentiation between TV and internet services, a differentiation that becomes increasingly artificial as bandwidth increases (see United States: 10 May 2007: Cable Companies Move on VoD and 16 February 2007: Qwest Loses Colorado Statewide Franchising, Sees VoD Future). This functional separation is a mirror image of arguments currently circulating the mobile industry, though the more restricted capacity of mobile data networks is providing more validation for the wireless network operators to control available applications and services (see United States: 26 February 2007: Skype Petitions FCC for Access to Mobiles).