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.

Nokia Siemens Introduces Middleware SDK

Nokia Siemens introduced a software development kit (SDK) as part of its latest IPTV middleware software release. This SDK allows for third party customizable user interface development on HTML and Java platforms. Operators and third party developers can customize and enhance IPTV offerings.

This SDK has been used by both Belgacom in Belgium and KPN in The Netherlands to customize their IPTV offerings for the last couple of years. Nokia Siemens in December will make this capability available to its other middleware customers and its small U.S. telco customers, in particular.

Belgacom has used the SDK to give the broadcasters the ability to provide a customized interactive interface along with its programs. The Belgian Idol program uses this capability to give viewers the ability to vote through their TVs for a price of one euro per vote. It shows the real time results of the voting, which creates an auction environment that encourages viewers to vote multiple times to support their favorites.

Belgacom also uses the SDK to provide a mosaic based electronic program guide (EPG). When using this mosaic EPG, the program is viewed using 65 percent of the screen. A mosaic of picture in picture windows of 16 channels around the TV window in the remaining space on the screen. The user then can request the next group of 16 channels or select one of the channels being displayed.

Nokia Siemens is taking the right approach. What it is trying to do is difficult and there are often limitations in these SDKs that limit their applicability. The proof of the pudding will be to see how successfully its customers are in using it to customize and enhance their services and to add applications.

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.

ORCA and BCC to Wholesale IPTV in in Russia

Orca Interactive has partnered with BCC, a system integrator to deliver a wholesale IPTV service across Russia. North-West Telecom, Sibir Telecom, and Southern Telecommunications are incumbent carriers that will market this service to smaller local companies.

I spoke to Orca about this announcement. Orca said that BCC will deliver broadcast content over fiber to the local carriers that sign up to this service. Orca said that broadband penetration is growing across Russia but is still at a relatively low level. This wholesale approach will lower the cost of introducing an IPTV service by providing a shared headend service. This will improve the business case for IPTV in Russia, where the rate of growth is likely to be low compared to Western Europe and North America.

Orca is smart to emphasize less developed markets such as Russia. Less developed countries such as Russia, the Middle East, and Latin America are likely to present the best new IPTV opportunities.

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.

Ericsson Gets Sonaecom Middleware Order

Sonaecom, the competitive provider in Portugal, has selected Ericsson's new IMS-based middleware software for its IPTV service. Sonaecom will also use video encoder from Ericsson's Tandberg subsidiary. Trials and deployments have already started.

Ericsson has been using Orca's middleware at Sonaecom. In this case Ericsson is replacing a smaller middleware vendor at a smaller deployment. Ericsson's challenge will be to do the same thing with a Tier 1 carrier.

ERicsson IMS IPTV Demo

At the CTIA conference in San Francisco this week Ericsson demonstrated capabilities that its new IMS-enabled middleware provides to integrate the TV experience with the PC and the mobile phone. It showed the ability to use presence, messaging, and both audio and video calling to communicate with other family members.

Ericsson said that IMS made these features much easier to implement and that it would be delivering these capabilities with its new IMS-enabled middleware.

The demonstration was impressive and included an attractive and simple user interface. It showed some nice ways that IPTV services can distinguish themselves.

Orca and Ruwido Create Fingerprint Personalization

Orca Interactive and Ruwido have created the ability to use fingerprints to personalize the IPTV viewing experience. Orca is the Israeli middleware company that is now a subsidiary of Viaccess. Ruwido is an Austrian manufacturer of remote control devices that has been used by several European IPTV providers.

The Orca middleware will be able to distinguish user by reading their fingerprint using a Ruwido remote control. Orca stated that this will be used to personalize viewing including defining favorite channels, video on demand content, and PVR content. It can also change skins and set parental controls. It can also facilitate targeting advertising to each specific viewer.

This is an interesting approach that is simpler and more direct than requiring some kind of sign in process. It will be interesting to see how this works in a real deployment.

Ericsson Introduces IMS-based Middleware

Ericsson has introduced an IPTV middleware package that is aligned with the Open IPTV Forum specifications and will be pre-integrated with IMS. It will interoperate with third-party products from IPTV companies such as Accedo Broadband, Agama Technologies, Amino, HP, SecureMedia, Sun Microsystem, Tilgin, Verimatrix, and ZyXEL.

This is a major push by Ericsson to increase its dominance in IPTV. It has a tough task in front of it to displace incumbent middleware suppliers, especially with the Tier 1 carriers. Most of the Tier 1 providers are using either Microsoft, Thomson, or middleware packages that they developed themselves.

Espial Agrees to Acquire Kasenna

Espial agreed to acquire Kasenna. Espial is based in Ottawa, Canada and provides IPTV middleware and applications software. Kasenna is California based and provides video on demand systems as well as its own middleware software. The transaction is expected to close about July 9, 2008.

Espial has been working to move up the chain and become a prominent IPTV systems provider. Kasenna was an SGI spin off that has been providing video on demand systems for many years. While this acquisition will increase Espial's presence in the IPTV market, it still has a lot of work to do. Kasenna does have good market presence, other companies have more momentum now.

BNS White Paper on Selecting IPTV Middleware

BNS, the IPTV consultancy headquartered in Hong Kong, has published a white paper that provides guidance on how to select middleware.

This white paper provides some practical advice and is worth reading by those starting to think about these issues.

Viaccess Acquires Orca Interactive

Viaccess, the French content security company, acquire Israeli middleware provider Orca Interactive for $21.4 million. Ordca stated that its middleware supports 1.2 million active subscribers globally.

Viacess acquired Orca for a low price and now has the ability to provide middleware as well as content security. This acquisition should help Viaccess in tier 2 and tier 3 markets in particular. It will not be much help in competing with Microsoft for Tier 1s

Quative IPTV SDP Interview

Deutsche Telekom is starting a pilot Dual Play TV service that will provide interactive TV, digital terrestrial broadcast TV, and on demand TV delivered over the Internet. This pilot will use an ADB hybrid set-top box and the Quative IPTV Service Delivery Platform (SDP). The following link will take you to German language website for this pilot service.

I spoke with Sebastian Kramer, Quative's CEO. He was formerly head of Alcatel's OMP IPTV middleware project, so he has extensive experience in the IPTV industry. Quative is a subsidiary of the Kudelski group, which also owns IPTV and digital TV content security, Nagravision.

Sebastian said that the Deutsche Telekom Dual Play TV service is separate from the company's T-Home IPTV service that is based on Microsoft's software platform. The Quative SDP was used to build a middleware system that integrates the Internet delivered on demand content with the over the air digital terrestrial service. He said that it offers a superior electronic program guide that includes both services.

He believes that Quative's SDP approach will facilitate B-to-B partnerships that will permit companies to reach consumers through their TVs. He cited an example where BMW might be able to address the 10 percent of the market that is likely to buy its products. BMW would be able to offer videos that feature is autos as well as interactive features such as configurators for each of its models.

Sebastian settled on an SDP approach to middleware because he found at Alcatel that most sales turned what was supposed to be a standard product into a project. Service providers wanted a level of competition that required a significant amount of unique development. He concluded from this experience that an SDP architecture that provides the building blocks that the service provider can use to build a custom middleware system would allow Quative to offer a standard product that service providers can use to create the IPTV system that they really want.

He expects that Quative's SDP will be applied in a variety of hybrid scenarios that include digital terrestrial and IPTV, satellite and IPTV, as well as even cable and IPTV. He also expects that Quative's systems will be used by pure TelcoTV services.

Sebastian and Quative have a smart strategy. They have learned from long experience as an IPTV subscriber. It is likely that they will be successful with Tier 2 and Tier 3 carriers along with hybrid applications. These emerging hybrid services are likely to become Quative's most interesting market.

Kasenna Tested at 1 Million Subscribers

HP and Intel ran IPTV scaling tests using Kasenna's LivingRoom middleware and Kasenna's PortalTV video on demand systems. These test showed that this software set can support 1 million subscribers using 9 servers. Five of the servers were used to support the middleware, 3 servers to support video on demand, and one server to support the backend database.

This simulation was run at HPs IPTV lab in Grenoble, France. It assumes that 60 percent of the set-top boxes were active and 40 percent inactive. The 60 percent active set-top boxes break down into:

• 18% watching or channel surfing broadcast TVs (180 thousand)
• 34% watching VOD and NPVR services (350 thousand)
• 1% browsing video on demand content (10 thousand)
• 4% browsing the electronic program guide (40 thousand)
• 3% viewing other applications (30 thousand)

Kasenna and HP are planning to release a white paper that gives the details of this test next week. You can download a summary of this test and register for the white paper at:

http://www1.kasenna.com/1m/

Kasenna promised to give me an early release of the white paper along with an interview with one of their technical people who worked on this project. I will post a summary after that.

This result is impressive. Kasenna uses a thin client approach, so it is quite dependent on the servers. Earlier middleware systems such as Nokia Siemens Myrio is set-top box based and puts a much lighter load on the network. Two years ago Myrio told me that their software could support 1 million subscribers with 4 servers. The primary function of these servers is to download software into the set-top boxes.

At that same time, Microsoft told me that their software would require 600 servers to support 1 million subscribers.

Minerva Moves Forward

Minerva reports that it added 45 new U.S. small telco customers in the past 12 months, which increased its customer base by more than 80 percent. 20 of these customers switched from other middleware systems.

Minerva has emerged as a very important supplier of middleware software to the small U.S. telcos. Minerva picked up the slack as Myrio turned its attention to larger global opportunities after its acquisition by Siemens. Kasenna also supplies middleware software to this market.

Nortel Getting Serious About IPTV

Nortel announced an IPTV partnerships today with NDS that provides access to the NDS MediaHighway middleware. It also announced that it will offer its own set-top box using a unit manufactured by the LG-Nortel joint venture.

Neither of these appear to be strategic relationships. Nortel has already partnered with Minerva with its niddleware software and Amino for set-top boxes. Nortel has not declared that it is abandoning either of these relationships.

Espial Serious About Middleware

Espial, a firm located in Ottawa, Canada, has been providing browser software for IPTV set-top boxes for several years now. Its browser is used by the Siemens/Myrio middleware platform and by service providers in Japan. More than 30 IPTV service providers and 1 million IPTV subscribers are using its browser in their set-top boxes, according to the company. Its software is also used in hospitality video systems and in consumer products.

Espial's states that its new server based IPTV middleware package was designed to provide fast response. It was also designed for easy porting to new set-top boxes through the use of a portability layer through that isolates the specifics of the hardware. Espial quotes the following performance improvements for its software compared to browser based software:

• EPG Load Time 0.1 secs (Espial) 4.5 secs (Browser)
• Navigating between visible programs in EPG 0.1 secs (Espial) 0.2 secs (Browser)
• Navigating to a non-visible program in EPG 0.2 secs (Espial) 1.9 secs (Browser)
• Scrolling 100 channels in EPG Guide 12 secs (Espial) 181 secs (Browser)

Espial has also designed its server based middleware to have a adaptable and customizable user interface. The service provider can create its own look and feel. This system gives flexibility in creating graphics and combining graphics with video.

Espial states that this server based middleware software is quite scalable and would require about 35 servers to support 1 million subscribers. Microsoft told us that its software would require 600 servers to support 1 million subscribers. Espial's current middleware deployments are to two small providers today, so it does not support any large deployments with its server based middleware package today.

Espial also provides a middleware package that operates completely in the set-top box without a requirement for servers support. NTT with more than 200 thousand IPTV subscribers is using this software.

Espial is selling its middleware software to tier 1 service providers globally.

Espial appears to have a good system. Its scalability, performance, and customizability are all important to both large and small IPTV service providers. It still has to prove itself in a large deployment. Today, only Cascade at PCCW, Thomson at France Telecom, Lucent at Telefonica, and Siemens at Belgacom are selling packages that are actually supporting more than 100 thousand subscribers. Swisscom is Microsoft's largest deployment which has recently reached 20 thousand subscribers, so Microsoft has to prove that it can support a large deployment as well.

Espial's Tier 1 strategy is a tough one for a small company. Microsoft has received most of the orders from these carriers recently. Microsoft will be difficult to beat assuming when it proves its ability to scale.