180Squared Introduces Microsoft Mediaroom for Small Telcos

180Squared has introduced "Mediaroom in a box" that prepackages Microsoft Mediaroom for small telcos. Previously, Mediaroom was targeted to large carriers who wanted to integrate it themselves. The 180Squared bundle includes:

• Services
  o Full Architecture and Deployment Services for Mediaroom
  o B/OSS Integration Service
• Software
  o 180SQUARED Framework B/OSS Package
   Global Operations Manager
   B/OSS Interfaces and Work Flow Engine
   Basic STB Management
  o Caller ID
  o Remote (Web) PVR

This looks like a useful adjunct to Microsoft's Mediaroom strategy that addresses the needs of smaller operators. It will be interesting to see how it does compared to software packages built specifically for this market such as Nokia Siemens/Myrio, Minerva, and Dreampark.

Microsoft Adds NPVR to Mediaroom

Microsoft introduced the NPVR Mediaroom Anytime feature set, which provides the ability to:

• Restart Anytime offers the ability for viewers to rewind or restart the currently airing program from any point.
• Live Anytime allows viewers to scroll backward in the Interactive Program Guide to watch previously aired programs. These previously aired programs also can be made accessible through the service provider's video on demand library.
• Download Anytime extends Microsoft Mediaroom-powered services to more consumers by enabling viewers to download on-demand movies and programs to their set-top boxes so they can watch them anytime regardless of bandwidth constraints. For example, viewers could watch high-definition programs on low-bandwidth networks.

In addition, Microsoft announced that the Mediaroom platform has reached nearly 2.5 million subscriber homes worldwide, an increase of more than 1.5 million new connections in the past year.

These NPVR functions are important IPTV services. They are very popular where they have been introduced in Europe and China. The U.S. providers are waiting to see the final results of the battle between Cablevision and the studios over this service.

Belgacom Considering New IPTV Middleware

Light Reading published an article saying that Belgacom is considering replacing its Nokia Siemens middleware. Light Reading thinks that Microsoft is the leading contender. The other major vendors supporting Microsoft are Arris/C-Cor for video on demand, Amino for set-top boxes, and Verimatrix for content security.

The Nokia Siemens middleware came from its acquisition of Myrio. Myrio's middleware was originally designed for the small U.S. independent telcos.

This is an interesting situation. It does not appear that Nokia Siemens has made the investment in the Myrio middleware to allow it to scale to meet Belgacom's needs and to support the next generation of interactive applications.

Microsoft's Mediaroom is an obvious candidate. I expect that Alcatel-Lucent will use its strong relationship with Belgacom to push the MyView middleware that it acquired from Telefonica. Thomson's middleware that is used by France Telecom should be another strong candidate.

It will be bad news for Arris/C-Cor, Amino, and Verimatrix if Belgacom its replaces Nokia Siemens middleware.

Microsoft Cable DOCSIS Deployment in China

The Guangzhou Digital Media Group will use Microsoft's Mediaroom IPTV software to provide IPTV service over its cable system using DOCSIS cable modems. At the launch of the service, Guangzhou will provide HD content for broadcast, recorded, and on demand viewing along with NPVR services. It will also offer a range of interactive services:

• Access to local news with information from government web sites displayed on TV.
• Local sports and entertainment news lets viewers watch video clips, view pictures, vote on favorite shows and check text messages via the TV.
• Local government e-mail service enables subscribers to view e-mails sent out by local government.
• Information service allows subscribers to check their local social security information.
• TV commerce permits customers to pay their phone bill or traffic tickets through the TV.

Guangzhou Digital Media Group, formerly Guangzhou Radio and Television Network Limited, is the largest cable TV operator in Guangzhou City. Guangzhou Digital Media has about 2.5 million cable TV subscribers, with about 1 million broadcasting digital TV subscribers.

This deployment shows another tool that the cable companies have to combat Telco IPTV services. The cable companies can offer IPTV services using cable modem technology. This approach makes a lot of sense with DOCSIS 3.0, which can offer 100 Mbps services.

Microsoft Mediaroom Advances

Microsoft has announced that it has added NPVR features and new applications to Mediaroom. It also stated that there are now 2.5 million IPTV subscribers served by Mediaroom.

Microsoft's NPVR feature called Mediaroom Anytime include:

• Restart Anytime offers the ability to rewind or restart the currently airing program from any point.
• Live Anytime allows viewers to scroll backward in the Interactive Program Guide to watch previously aired programs. These previously aired programs also can be made accessible through the service provider’s video on demand library.
• Download Anytime enables viewers to download on-demand movies and programs to their set-top boxes so they can watch them anytime regardless of bandwidth constraints. For example, viewers could watch high-definition programs on low-bandwidth networks.

It also announced the following applications:

• BBC Worldwide TopGear.com is demonstration application that allows fans to access and interact with content found on http://www.topgear.com.
• Turner Sports and the PGA of America, together with ES3™, built an application that allows viewers to switch dynamically between camera feeds, watch golfing instructional videos and click from static to video advertisements.
• The Associated Press red carpet events, built by ES3 and the AP, is a celebrity news application which features up-to-the-minute information, photos and video clips at the carpet events.
• Live Capture of Photos and Video lets viewers upload photos and videos to the Microsoft Live Mesh cloud storage Web site and view their personal content via the TV.
• Visual Voicemail lets TV users check their voice mail and play back messages, even at pitch-controlled, fast-forward speeds.
• TV Dashboard, designed and created by ES3, shows local news and information that Mediaroom subscribers can access while watching TV.

These are all good features that move Mediaroom beyond the stage where it was duplicating cable TV services. They will provide good differentiation for service providers using Mediaroom.

Motorola Launches IPTV Store Front

Motorola introduce an IPTV store front system for Microsoft's Mediaroom. Its Storefront 1.0 software enable to offer IPTV and Internet services along with physical goods. The system could support the sale of a video on film, the DVD of the same film, and ring tones associated with the movie.

This is the kind of capability that IPTV providers need to distinguish their services. The more these services become integrated with the Internet, the better.

Microsoft Mediaroom Supporting 2M Subscribers

The Microsoft Mediaroom IPTV software now supports 2 million subscriber homes, doubling in less than one year. There are nearly 4 million set-top boxes worldwide in these homes. In the past quarter , 500,000 new Mediaroom subscribers globally. ATT is one of Microsoft’s fastest-growing Mediaroom customers with 781,000 AT&T U-verse IPTV subscribers.

Microsoft is reaping the rewards of its Tier 1 carrier wins. It moving into the number one position with merchant software packages.

Chunghwa Backing Off Microsoft Mediaroom

It has been reported that Chunghwa Telecom of Taiwan plans to shift more than 3,000 users currently trialing Microsoft Mediatoom to the Alcatel-Lucent-developed OMP. Chunghwa originally planned to switch its user base to MSTV in place of OMP but has not yet committed to the decision. Currently there are more than 80 channels available on CHTs OMP system but fewer than 40 channels through Microsoft's Mediaroom.

It has also been reported that Chunghwa has has further reduced the target number of its IPTV subscribers for the end of 2008 from 800,000 to 700,000. In July, Chunghwa lowered the target number from one million to 800,000. The company currently claims about 603,000 subscribers.

It is not clear what backing off of the Microsoft Mediaroom trial means. It could be that this is part of a long term transition plan or it could mean that Chunghwa is backing away from Mediaroom. Time will tell.

Harmonic Ad Splicer Passes Microsoft Testing

The Harmonic ProStream™ 2000 digital video splicer has successfully completed conformance testing for real-time splicing of national MPEG-4 AVC (H.264) video streams of the Microsoft Mediaroom IPTV system. The test for the ProStream 2000 platform was administered by Microsoft as part of the Microsoft Mediaroom Interoperability and Qualification Lab (IQ Lab) program.

The Harmonic splicer can be used to replace national ads and can be used to provide different ads to specific zones or to support unique ads to a limited number of demographic groups.

The Harmonic splicer supports the advertising strategy that Microsoft announced at IBC. Microsoft’s strategy also includes more highly targeted ads that are different using other techniques, including through the set-top box.

Jungo Fast Channel Change

Jungo has jumped into the fast channel change arena with a home gateway-based solution. Jungo's approach reduces channel switching overheads by employing using an enhancement of the regular IGMP Leave and Fast- Leave operations - otherwise known as 'Aggressive Leave' and the monitoring of available resources such as bandwidth and virtual circuits.

Jungo's software will identify when the viewer is channel zapping, that is quickly sending a sequence of channel up or down selections. In this case the channel changes can stack up because they come more quickly that the channel changes can be accomplished. In this case the Jungo software will skip to the last channel selected and skip the others in the stack.

For example, if the viewer is watching channel 43 and quickly presses the channel up button, a channel change to channel 44 will initiate. By the time channel 44 appears on the TV, four more channel change requests will have been received for channels 45, 46, 47, and 48. The Jungo software will discard the channel change requests to channels 45, 46, and 47 and jump to channel 48.

This illustrates how complex fast channel change is. The Microsoft and the Alcatel-Lucent approaches minimize the channel change time when the user selects a new channel from the electronic profile guide, say switching from channel 43 directly to channel 65. I don't think their approaches address the sequential channel change issue that Jungo is addressing. Maybe a fully optimized fast channel change will have to be implemented an multiple places in the network.

Alcatel-Lucent TPSDA 2.0 Steals Microsoft's Thunder

Alcatel-Lucent has introduced IPTV application awareness into its Triple Play Services Delivery Architecture (TPSDA) 2.0. It will add flash storage to its edge routers, its switches, and its access nodes that will support fast channel change, packet retransmission, and targeted ad insertion.

• For fast channel change the last few minutes of every multicast channel will be stored in the network and the new channel will be started immediately, eliminating the latency that typically occurs today. Alcatel-Lucent said that HD channel change time will be reduced from several seconds to well under a second.
• For packet retransmission the network will store enough packets to immediately service the packet retransmission request.
• For ad insertion targeted ads will be stored and inserted in the network.

If the service provider uses Alcatel-Lucent access nodes, these functions can be provided in the access network. These functions can also be provided in the Alcatel-Lucent switches or edge routers for service providers using Alcatel-Lucent's TPSDA 2.0 architecture.

Alcatel-Lucent has also discussed plans to increase the amount of storage in these network elements in order to support rewind TV and video on demand delivery.

TPSDA 2.0 can support these functions for service providers using access nodes from other manufacturers by implementing them in the switches and edge routers.

Microsoft has not announced any support for these network capabilities.

This is an interesting announcement. It enables middleware companies other than Microsoft to support fast channel change. This includes both the Alcatel-Lucent MiView and OMP middleware as well as other middleware from companies such as Thomson and Orca. This approach to fast channel change will eliminate one of Microsoft's most competitive features.

This approach will give service providers new flexibility in managing the bandwidth demands from an IPTV service, especially as more and more on demand and personalized services are provided. I think the flexibility that it gives in placing storage in the network will improve the ability of service providers to optimize their networks.

ATT Introduces Whole Home DVR

ATT has introduced the whole home DVR feature provided by its Microsoft Mediaroom software. Viewers will be able to record up to four programs simultaneously and will also be able to play back up to four recorded programs at once. It will store up to 37 hours of HD content or 133 hours of SD content. It will also be possible to schedule recording on the DVR from a remote PC or a mobile phone.

The demonstrations of this feature that I have seen were quite attractive. I would certainly be happy to have it myself. The only caveat is that its ability to record four HD streams simultaneously will be limited by the amount of bandwidth available.

Netflix to Make Videos Available to the Microsoft Xbox 360

Netflix will make a library of more than 10 thousand movies and TV episodes available when it launches on Xbox Live toward the end of 2008. This is an extension of the Netflix Live service that provides the ability to watch videos on a PC today. The Xbox Live service will provide the ability to watch the Netflix videos on TVs.

This is an interesting announcement because it brings over the top Internet TV to the TV set rather than the PC. I think that this is where commercial video content needs to go to really capture a significance audience.

The key will be the quality of experience. It is likely that most U.S. broadband users will get a good SD experience on their TV but will not be able to stream HD. This will show up the bandwidth limitations of most U.S. broadband services.

Microsoft adds Mediaroom Partners

Microsoft announced that it added three new system integration partners, HP, Tech Mahindra, and 180Squared. These companies are in addition to Alcatel-Lucent, which is Microsoft's only end-to-end system integrator as well as its only reseller.

Microsoft also stated that Mediaroom is not supporting more than 2 million TV sets worldwide.

This is interesting because it may indicate some weakening of the Microsoft/Alcatel-Lucent arrangement. Alcatel-Lucent offers two middleware software systems as well as Mediaroom. Whether or not this is true, Microsoft's service provider customers can benefit from the incremental skills that these three new partners bring. HP has a strong server hardware base. Tech Mahindra has strong back office skills, and 180Squared provides applications and the ability to support smaller deployments.

The 2 million TV sets does not mean 2 million subscribers. AT&T in the U.S. provides multiple set-top boxes per home. In any case, Microsoft is experiencing strong growth in homes served.

Microsoft Releases Beta ADK for Mediaroom

Microsoft has released the beta version of its Microsoft Mediaroom Presentation Framework Application Development Kit (ADK) to nearly 150 companies globally. These companies included content providers, applications developers, as well as its service provider customers including ATT and BT.

This ADK is intended to provide service providers, content providers, and applications developers with the ability to create interactive programming and applications that enhance the basic capabilities of Mediaroom.

I met with Microsoft in Mountain View yesterday to get an idea of what this meant. They demonstrated three demos that were created for CES in January that were based on this ADK:

• NASCAR application that gives the viewer the ability to select the specific in car camera displayed in a window on the screen and the driver audio that he or she would like to view or hear. It also provides access to information about the race, previous races, and the drivers that can also be displayed on the TV. These displays brings content that is already available on the web to the TV screen.
• A boxing application that permits the user to select the microphone audio to be played on the TV. It provides audio from four microphones. All four audio tracks are recorded on the DVR when the program is broadcast and may be selected during later playback.
• A TV based social networking application that permits to set up and join groups. Group members can communicate with each other using text entered via the remote control. It is possible to find out who in a group is watching the show you are watching in order to chat about it.

Microsoft stated that it is working closely with the companies in the beta program and are using ideas that come back from this group to decide how to enhance this ADK. It has found that this group often comes up with good ideas that it had not thought of itself.

This kind of application capability is a good answer to what IPTV does better than cable (or satellite). Of course Microsoft and its service provider customers will have to work hard to stay ahead of the U.S. cable companies. It could also be used to enhance the advertising experience as well as the programming itself.

Corbina in Russia Goes with Microsoft

VimpelCom in Russia has signed an agreement to use Microsoft's Mediaroom IPTV software for its Corbina TV IPTV service. The service will also use Motorola set-top boxes with or without a 160 GB hard disk. The service will support both SD and HD programming and will be launched in the middle of 2008. It will have 100 broadcast channels and 1,000 films, cartoons, and series available on demand. Corbina provides fiber based services to almost every apartment building in Moscow and many other cities in Russia.

This is another strong win for Microsoft. The Russian market is becoming a strong telecom market and it looks like IPTV will do well there.

Chunghwa Telecom Starting Microsoft Deployment

According to an article in the Taiwan Economic News, Chungwha Telecom now has 10 thousand IPTV subscribers on its Microsoft Mediaroom platform. Microsoft and Taiwan's Chunghwa Telecom will launch the IPTV Ecosystem Development Center in Taiwan to focus on the IPTV market. This operation will work with Taiwan`s set-top box makers and content providers to tap markets overseas.

Chunghwa is using Tatung set-top boxes to support its 10 thousand Mediaroom subscribers. It is using Asustek and Hon Hai set-top boxes for its 480 thousand Alcatel-Lucent's OMP middleware, giving it a current total of 490 thousand IPTV subscribers.

This is the start of the insertion of Microsoft's Mediaroom into Chunghwa's IPTV service. It took Chunghwa several years to convert 40 thousand Orca subscribers to Alcatel-Lucent's OMP. It will be interesting to see how this process will work for Mediaroom.

180Squared Launches

The IPTV start up company 180Squared has officially launched itself. It was formed by Microsoft Mediaroom alumni to support and extend Microsoft's Mediaroom IPTV system. Its key technology is a framework that encapsulates Mediaroom and promises to provide a set of higher level interface functions that will remain stable as Mediaroom evolves underneath it. 180Squared states that this framework will allow applications based on Mediaroom to continue to operate without change as new versions of Mediaroom are deployed underneath it.

180Squared stated that its framework will provide interfaces to both OSS/BSS systems and to applications that provide additional features to Mediaroom. The company is using the framework to support its own TV caller ID display feature and its own 911 features as well its own device activation module and billing module. It also uses the framework to support its services business which assists operators deploy Mediaroom based IPTV services.

180Squared has assisted NTELOS with its Mediaroom implementation. NTELOS operates as a rural telco and as a CLEC in Virginia and West Virginia. 180Squared stated that tier 1 Mediaroom customers have also expressed interest in its framework.

Microsoft's Mediaroom has been well accepted by tier 1 operators globally. This will provide a large potential market for 180Squareds products and services. Large operators have shown strong interest in developing and customizing their IPTV software. 180Squared should do well if it can tap into this.

Microsoft Mediaroom Application Environment

Light Reading published an article describing a new version of the Microsoft IPTV software called Milwaukee. Microsoft calls Milwaukee the Multimedia Applications Environment (MAE). the MAE facilitates the development of new IPTV applications and the ability to pull in existing data feeds, including real-time updates, from websites to run concurrently on-screen with video streams; and the ability to build recommendation and personalization tools.

Microsoft gave demonstration of the streamed TV/Website data at the IPTV World Forum, using feeds and relevant background data from Nascar's Website, alongside and/or overlaid with video footage of a NASCAR race.

BT has expressed strong interest in using the capabilities of the NAE. The NAE is planned for a beta release in May 2008 and general release in August.

This is the kind of capability that Microsoft will need to takes its service provider customers to the next level of IPTV capability. It is certainly the kind of thing that they were banking on when they selected Mediaroom.

Telecom Italia Rejects Microsoft Mediaroom

Apparently Telecom Italia made a decision not to use the Microsoft Mediaroom IPTV software system that it had been testing its its labs for the last several years. The reports are that Telefonica preferred that that Telecom Italia use the MyView middleware software that it developed. Alcatel-Lucent took over the development and marketing of this package in 2006.

Telecom Italia has been using Alcatel-Lucent's OMP system since its IPTV service was introduced.

While this is a significant blow, Microsoft still has a large number of tier 1 service providers using its Mediaroom software. This loss does not threaten the eventual market dominance that we projected for Microsoft in our report Global Opportunities in Wireline Broadband Networks.

It is clear that Telecom Italia will need to move from OMP to another middleware package. Moving to My View will at least keep it within the Alcatel-Lucent orbit.