Packet Vision & Tandberg TV Solve MPEG-4 Ad Insertion Problem

Packet Vision ran into a problem with its targeted ad insertion project with the Inuk PC-based Internet IPTV service that serves about 150 thousand college and university students in the UK due to the use of MPEG-4 compression.

MPEG-4 has a latency of one or two seconds between I-frames that contain an entire screen. Between the I-frames only the incremental changes are transmitted. The ad insertions start with the I-frame but the ad being over written may have already run up to two seconds before the inserted ad starts. This creates a rather jarring experience where the viewer sees the ad to be over written for a bit before seeing the new ad.

This was not as significant a problem with MPEG-2 because the latency between I-frames is about 1/2 second, which does not create as bothersome an overlap with the over written ad.

Packet Vision worked with Tandberg TV, the company providing the encoders to Inuk, to carefully encode the broadcast streams from Channel 4 in the UK and to mark the insertion points. Tandberg TV made sure that ads started with an I frame so that a clean splice is made. This has provided a much better viewing experience.

This looks like a problem that is inherent in MPEG-4 that all encoder and ad insertion systems will need to solve. Packet Vision and Tandberg TV have done pioneering work to get targeted advertising to work in Telco IPTV services.

Three Screen Strategies

This week three interesting three screen were announced or shown at NXTcomm.

Verimatrix introduced its content security system for mobile applications. It now provides a single system that can support TVs, PCs, and mobile devices. Verimatrix has also added support for other security technologies into its system such as OMA DRM, Microsoft DRM, and Marlin DRM as well as its own VCAS DRM. This gives the service provider the ability to deploy a single system that can support a broad set of content security technologies.

Ericsson's Tandberg TV demonstrated a three screen metadata system that gives service providers to manage the metadata for their video assets including the ability to supplement the metadata delivered with the asset with additional metadata that is available from Internet sources. It also gives users the ability to browse and search this metadata with a very attractive interface from either the PC or a mobile device.

Alcatel-Lucent gave a demonstration at NXTcomm of three screen technology based on the Microsoft Mediaroom DVR capability. This system copies the content that the viewer records on the DVR to a network server and then provides access to these private network assets from both a PC and a mobile device. The network provides a catalog of what is available and the handles the format and compression conversion required to display on either the PC or the mobile device. A viewer can automatically record their favorite programs and then view them using either a PC or a mobile device while they are on the road.

Three screen TV is moving from hype to reality. Both Verimatrix and Tandberg TV now have products that add real value. The Alcatel-Lucent demonstration is quite interesting but raises a number of issues that need to be addressed. For example, the content providers may object to this use of their assets. There are also real privacy issues when you take private content and put it onto a network.

ZTE IPTV System

I was at the ZTE analyst meeting in Shenzhen, China on March 25 and 26. ZTE was quite serious about its telco IPTV system. It offers an open system that combines ZTE and third party components, including:

• Headends from Tut Systems (now part of Motorola), Optibase, Tandberg TV, envivio, and Thomson
• Video On Demand Servers from ZTE
• Middleware from ZTE
• Content Security from ZTE, Irdeto and Verimatrix
• Set-top boxes from ZTE, Sunniwell, and Yuxing

ZTE stated that its systems are in more than 20 deployments and trials and are currently supporting one million telco IPTV subscribers, including

• China (with 50 percent market share according to ZTE's numbers)
• Free Internet, Thailand
• VNPT Vietnam
• Belorussian Telecom
• Progroup, Estonia
• STC, Saudi Arabia
• Emcali, Columbia
• CanTV, Venezuela

ZTE's basic business strategy is to focus on developing countries, especially China and India. This is a good strategy, since this is where the new opportunities are coming from.

Ericsson Chases Tandberg

Ericsson has submitted an offer for Tandberg TV at $1.4 billion that is 10 percent higher than the recent offer from Arris. Ericsson already owns 11.7 percent of Tandberg.

This offer shows that after a late start, Ericsson is getting more serious about TelcoTV. The addition of Tandberg to Ericsson would put it in the same league as Alcatel-Lucent, Siemens, and Cisco in terms of their IPTV capabilities. If this merger goes through it will likely stimulate more M&A activity. Harmonic is certainly a choice candidate. It is also likely to stimulate activity in the Middleware and Video On Demand area. Minerva, Orca, Bitband, and Kasenna are likely candidates in these areas.

Arris and Tandberg to Merge

Arris will acquire Tandberg for $1.2 billion. Arris provides cable modem and VoIP systems to cable service providers. Tandberg is one of the leading IPTV video headend system providers.

This merger will put Arris into the video business and into the IPTV business. It did not seem that Tandberg's acquisition of Skystream last year would not inoculate it from acquisition. Given the pace of acquisition in IPTV today, it will be interesting to see if this merger inoculates Arris.