xOD Capsule Newsletter – May 30, 2006

Studios throw book at Cablevision's 'RS-DVR'
The lawyers at Cablevision Systems Corp. may have thought the MSO was on sure legal footing when it came to the company's test of a network-based DVR in Long Island, but, as expected, several lawyers on the content side of the equation disagreed, and filed suit last week.

There's no surprise that the plaintiffs (in this case, Twentieth Century Fox, Universal Studios, Paramount Pictures, The Walk Disney Co., ABC, CBS, and NBCABC, CBS, and NBC. And, according to a report posted Tuesday at www.multichannel.com, you can add Cartoon Network and CNN to the list of plaintiffs.) came forward with the suit, but that they took as long as they did to get to this point.

That's because the implications of Cablevision's approach could be huge, especially if it holds up in court. If the court finds (if it even gets that far) that enabling consumers to record television on a hard drive on a network has the same legal protection as via a home-based DVR, that could affect the plans of networks and programmers have in motion to distribute their content (via download, streaming, ad-supported, for purchase, etc.) via the Internet and other delivery methods. Of course, those who thought Betamax machines and VHS tapes and recorders would destroy existing television were wrong. Despite that and the DVR today, television is still around and doing okay last I checked. Programmers and the companies that pipe in the content will certainly have to adapt to these new models.

Although many have privately applauded the gravitas of Cablevision's approach, I think there's a good likelihood that the Cablevision and the programmers that are suing Cablevision will end up finding common ground out of court.

Of course, getting programmers and studios to the deal table was one of the motives that came up when we first explored the VOD 'condo' concept last October.

— Jeff Baumgartner, Editor in Chief, CED magazine and xOD Capsule

More about VOD metadata
As you may recall, CableLabs recently released the 2.0 version of its video-on-demand content specifications. We covered the basics here last week, but the significance of the new specs deserves much more than a cursory glance.

Following up on benefits such as better searching capabilities, some companies and individuals involved in the creation and final assemblage of the 2.0 specs provided more detail on other enhancements it will provide over the previous version.

One of the most significant elements to be added in the 2.0 specs is the capability to separate the content assets from the actual files, said Rick Qualters, the SVP of Technology of IMAKE Software & Services Inc., which supplies VOD asset management tools and systems to Comcast Cable and other MSOs, and contributed to the new specs.

In the previous VOD metadata releases, he explained, the content file was part of the entire CableLabs VOD metadata package. Under the current way of doing things, for example, a double feature of "Men In Black" and "Men In Black II" would require both movies to be encoded, back-to-back, and pitched as a completely separate file. That file would be in addition to the discreet files for those two movies already on the server farm. With 2.0, both movies would only have to be encoded, pitched and stored once whether they were offered separately or as a double feature.

This capability will also allow the pitching of a movie poster and the movie preview prior to the opening of the movie. That, in turn, will allow operators a more efficient way to promote and pre-sell movies, explained Dave Bartolone, the vice president of technology at TVN Entertainment, another contributor to the 2.0 content specs.

These capabilities will conserve server storage as well as pitching and maintenance costs.Another key feature of 2.0 is the VOD "playlist." That feature will help the asset management system identify specific files to play back-to-back when a VOD title is ordered. This content sequence can play back and link together in the right order anything from targeted advertising and promotions and the movie itself.

The new specs will also ease the availability of standard-def and hi-def versions of the same movie, since both versions can in most cases use the same metadata information.

"There's no reason to re-pitch that metadata file. The metadata generally doesn't change if it's the HD or SD version," Qualters said.

The way VOD content is priced and marketed could also see benefits from the new specs. The "terms" metadata are also separated out in the new specs. The terms generally apply to the pricing of the title. The terms of an advertising-supported version of a TV show might cost less than one with the ads stripped out, for example. By the same token, the cost-to-consumer of the HD version will typically be higher than the SD title. Subscribers also could, if the terms called for it, be allowed to pay a premium to gain the ability to burn a particular movie or TV show to a DVD or another recording device.

To give VOD some capabilities traditionally relegated to DVDs, the new specs will also support chaptering, which will, in turn, help customers navigate movies and other on-demand content. Today, most VOD systems support only fast-forward and rewind and pause trick-modes.

The latest VOD content specs will also support more dynamic and flexible content exhibition windows. An operator will able to offer content in a more specific windows – perhaps a run on Friday night that offers a special price on a title from 6 p.m. to midnight.

Because there will be fewer instances that content will need to be re-pitched, the new specs will usher in much more flexibility and enable VOD to scale better as more and more on-demand content enters operator libraries, according to CableLabs Project Director Dr. Yasser Syed.

With 2.0, metadata can also be presented in a wider range of languages, he added.

Those familiar with the new specs note that the 2.0 version is far more complex than the earlier versions. The jump from 1.0 to 1.1, in comparison, "wasn't that great," since the basic structure was the same, save for some ID and field changes, said Chris Stasi, TVN's VP of network operations and development.

With 2.0, certain pieces of metadata reference other content on the servers and, therefore, require a larger structural change in order to enlist the higher level of tracking.

Although the spec was just issued, that doesn't mean operators and vendors will be deploying 2.0 right away. Instead, vendors and operators will spend more time absorbing the new specs and refining them over the next six months before tests start to ramp up. "From an industry adaptation perspective, ultimately the drivers will be the content providers and the MSOs," Qualters said, noting that both will need the necessary, upgraded pitching and catching gear and asset management systems to leverage the benefits of 2.0.

He suspects that initial deployments of 2.0 won't take advantage of the full feature set of the new specs, but will at least implement some of the new syntax.

Panel: Programmers, operators
must adapt to new age of video distribution
DENVER — Cable operators, networks and other programmers must learn to establish new business models in an age of video downloading and streaming services.

That was the common theme expressed by panelists who participated in the first annual Summit on Intellectual Property Digital Media, held this week here at The Cable Center.

HBO Chief Technology Officer Robert Zitter kicked things off Tuesday morning with a keynote that addressed some of the shifting tech trends and how they are impacting the traditional television business model.

The panel featured (L-R) Bob Zitter of HBO, Joe Cantwell of Starz Entertainment Group, Rich Fickle of Ascent Media Group, Ron Lamprecht of NBC Universal Cable, and Vince Groff of Cox. Susan Green (far right) of The Cable Center moderated the discussion.

Among those trends are the costs of hard disk, flash and RAM-based memory, which are falling faster then Moore's Law in the processing world. That, he said, is enabling consumers to buy devices that can store video, "and every year it can store more."

In connection with that, the speeds for consumer Internet access services are surging. While newer ADSL2+ technologies aim for speeds as high as 24 Mbps, most of today's HFC plant is built out to handle capacity of roughly 5,066 Mbps, while top-end fiber-to-the-home networks push the bar a smidge higher – about 5,166 Mbps.

Other trends include the emergence of digital home networks and their ability to connect PC-stored video to television screens.

Those trends are causing serious implications for today's TV business models.

Ron Lamprecht, the VP of new media for NBC Universal Cable, acknowledged that TV models, in the wake of time-shifting and portability, have changed and grown more complicated than they have been over the past three decades.

"We are really more of a content creator than a traditional packager and distributor of content," Lamprecht said, noting that a critical question today is how networks can protect their multi-billion business while also playing a key role in these new forms of distribution.

It's an easy question, "but the answer is so complicated," he said.

Programmers and networks have to address an audience that is quickly fragmenting. Although some shows still command a large audience, that audience is not as large at one time as it was 10 years ago.

A key challenge is how to "reassemble that audience," Lamprecht said. These days, networks have to ensure that their shows can get to all the places that consumers want to access them.

The new models are also affecting the content creators, which can't make enough revenue on traditional theatrical and TV channels, according to Rich Fickle, the EVP of strategic development for Ascent Media Group. Now, they have to account for global distribution on multiple platforms.

Starz Entertainment Group, meanwhile, is participating in these new distribution models, particularly with Vongo, the company's recently launched direct-to-consumer Internet video service. Vongo complements SEG's premium video services offered in partnership with cable operators and DBS firms.

"Where you are is where we'll try to get [content] to you," said Joe Cantwell, VP of marketing, advanced services for SEG.

Lamprecht added that "we want to be there," if there's an opportunity for his company to distribute content to cell phones or other devices. He also acknowledged that such content must also be protected thanks to growing digital piracy issues. He said "Battlestar Galactica," a popular series on SCI-FI, represents his company's most pirated piece of content.

Despite the potential threat Internet-delivered video services represent to cable operators, it's not necessarily viewed as a big concern in the short-term, noted Vince Groff, director of video product development for Cox Communications.

"If I were only in the video business, I might be more concerned," Gross said, noting that high-speed data represents Cox's largest growing business.

The panel also touched on the emergence of "place-shifting" devices and services such as Sling Media's Slingbox and Sony Corp.'s LocationFree TV.

Zitter reiterated HBO's position that place-shifting, despite its use of the so-called "analog hole," could infringe on network copyrights.

Time Warner synchs up with 'Last Comic Standing'
Time Warner Cable is offering interactive trivia and polling questions alongside the new season of NBC's"Last Comic Standing."

The new season, which kicks off today (May 30), is featuring applications that are synched with the linear broadcast.

The interactive applications, powered by Navic Networks, will allow digital cable subs to respond to trivia questions and express opinions about contestants via their remote controls. Synchronized trivia and polling questions will appear as pop-up screens during each one-hour broadcast.

Time Warner initially will offer the interactive elements in select markets, including New York, N.Y.; Los Angeles, Calif.; Cincinnati, Ohio; Milwaukee, Wis.; and Wilmington, Greensboro, and Charlotte, N.C.

Time Warner is already offering similar polling applications for Bravo's "Top Chef" series. For that show, the operator said it is averaging 30 percent viewer participation in markets that support interactivity.

"We expect continued success with the launch of a prime-time network show like "Last Comic Standing," as viewers become more familiar with interactive TV," said NBC Universal Cable SVP and CFO Jean-Briac Perrette.

TiVo revenues rise, while losses widen on litigation costs
TiVo Inc. posted Q1 revenue of $55.1 million, up 38 percent from $40 million in the year-ago period. Those revenues included $7.2 million in "development revenue" from its DVR relationship with Comcast Corp.

The boost in revenues was not enough to avoid a net loss of $10.7 million (13 cents per share), widened from a net loss of $857,000 (1 cent per share). TiVo attributed the wider loss to costs linked to litigation, "aggressive" price offerings, and the expensing of stock options.

The company said it added 91,000 gross "TiVo-owned" subs in the quarter, giving it a total of 4.4 million, up 33 percent from a year earlier. Subs acquired through its partnership with DirecTV, traditionally the lion's share source of new TiVo's customers, was just 2,000 for Q1.

Although DirecTV has introduced DVR technology from corporate cousin NDS Group, the DBS giant and TiVo did recently sign a three-year extension.

Looking ahead, TiVo expects to post Q2 service and technology revenues of $50 million to $53 million, and a net loss in the range of $12 million to $15 million.

Stream Theory goes after GoD rivals
Stream Theory has filed a lawsuit against three fellow games-on-demand (GoD) companies, claiming they have infringed a patent tied to on-demand software services and applications.

The suit, filed in the U.S. District Court for the Central District of California, cites Softricity, AppStream and Exent Technologies. Stream Theory is seeking damages and an injunction against those named in the suit.

Among that group, Exent has already secured deployments of its "EXEtender" games-on-demand platform with operators including Comcast Corp., Verizon and RCN Corp., among others.

Exent declined comment last week, noting it had yet to review the lawsuit.

Stream Theory's suit centers on U.S. patent number 6,453,334, which describes a "method and apparatus to allow remotely located computer programs and/or data to be accessed on a local computer in a secure, time-limited manner, with persistent caching."

Stream Theory said the patent was issued on Sept. 17, 2002, and originally filed on June 16, 1997. Some of its partners/customers include Broadband Nexus, which operates a games-on-demand site in the United Kingdom; StreamTech, a company that operates a gaming site in The Netherlands; Bizmatica of Italy; and Softbank BB Corp. of Japan.

C-COR, ARRIS to demo broadband-on-demand system
C-COR Inc. and ARRIS have integrated some technology that will enable broadband users to ratchet data speeds on the fly.

The bandwidth-on-demand system, which is based on the CableLabs PacketCable Multimedia (PCMM) architecture, teams C-COR's Policy Service Manager (PSM) with ARRIS' Cadant C3 cable modem termination system.

The companies will demonstrate the capability at this week's ANGA Cable Trade Fair in Cologne, Germany.

The demo will also show off how on-demand bandwidth can be allocated for specific applications, including video-on-demand.

We are making changes and additions (including international deployments) to our
Web-based "living" deployment chart. If you have a new deployment to report for the VOD Scorecard and the Web-based deployment chart, please contact CED Editor Jeff Baumgartner.