Cisco, Nortel, Rovi, TDG & Verimatrix at STB 2009

Turner, AccuWeather and Sky Angel in Attendance

Last week's STB 2009 in San Jose was a well received, quality event in the heart of Silicon Valley.  Greg Fawson and his X Media Research staff put on this 3rd annual conference which attracts a select, albeit, small crowd for the 2 day event.  The 300 or so attendees were exposed to a wide cross section of the Digital TV and entertainment eco-system with trends and predictions explained by key insiders.

Notable Attendees:  Aside from the speakers, key players from the entertainment and technology sectors were there to hear from their competitors and collaborators about the state of the industry and the predictions for near term changes.  Magnum Semi and NXP Semi were rubbing shoulders with their SoC customers and prospects while AccuWeather and Turner Network were looking for clues to which areas of distribution represent the best bet for content licensing.

Hybrid TV Is Hear To Stay:  Several speakers including Cisco’s Ken Morse, CTO for Video, and TDG’s Colin Dixon, Practice Manager for Broadband Media, extolled the virtues and increased adoption rates of hybrid TV.  Set Top Boxes which connect to the net for OTT (Over The Top) video content along with Free to Air ( in EU) and ATSC in the US, give consumers an opportunity to cut their cable or satellite bill and subscribe to only the premium OTT channels they really want.  Though no one is predicting a complete cutting of the cable or satellite cord just yet, these MSOs may see a significant number of their subs going to a lower tier of service.  Why purchase a premium package with HBO and Showtime in a large bundle with 200 channels you never watch when you can purchase basic service and buy a Roku box for Netflix movies at less than $10/month extra?

Sky Angel Soars:  The darling of the OTT business model in the US seems to be the “Family Friendly” content provided by Sky Angel.  Using the IPTV distribution services of NeuLion, Sky Angle was cited by speakers as  a prime example of the OTT threat to cable, satellite and telco subscription services.  And sitting in the audience at the conference to hear the accolades first hand was Sky Angle’s Sr. VP of Engineering, Sherrod Munday.  Sherrod enlightened me with some of the details of their very serious investment in infrastructure and content licensing that is not just a ‘flash in the pan.”  With their headquarters located in Florida,  the satellite downlink site, encoding and distribution center is in Cleveland, Tennessee.  Sherrod explained that their family subscribers are also looking for mainstream entertainment, though nothing approaching an R rating.  Sports, weather, and news channels are already included in their lineup.  And there may be plans to add other channels of general interest to the home improvement, travel and cooking audiences.  (See my previous postings on “Godcasts” to get more information on the religious OTT services.) 

Widgets, Widgets and More Widgets:  This Will Be A Blu-ray Christmas” -  TDGs Colin Dixon delivered that quote to drive home the fact that net connected Blu-ray players will introduce even more consumers to the growing OTT market.  He also noted the significance of Intel’s newly announced Atom CE4100 processor enabling Flash 10 playback of widget launched, videos on non-PC devices.  Netflix, Amazon and CinemaNow are increasing their stable of widgets supplied to CE device manufactures to be used as part of their on-screen UI.  These simple buttons showing up on the screen of a net connected TV can instantly transport a viewer to more entertainment purchasing portals than they ever dreamed were available.

More Blu-ray Features to Come:  Glenn Algie, Video Solutions Architect for Nortel (no they are not dead), filled me in on some forward progress being made on the Blu-ray coding front.  According to Glenn, a significant number of out of work Java programmers have been busy at the major movie studios writing BD-J code for Blu-ray DVDs.  BD-J allows bonus content on Blu-ray Disc titles including network access, picture-in-picture and access to expanded local storage.  These "Bonus View" and "BD Live" programs allow DVDs to take over the runtime of the box and present a unique set of menus, widgets, and net links once the DVD is loaded.   Glenn also mentioned the work being done by RCDb to deploy networked applications on Internet connected Blu-ray players.  A player can now dynamically load and unload applications and connect to third party services and content offerings controlled by the player manufacturers and their retail partners.

The Integrated TV May Be The Next Trojan Horse”:  Richard Bullwinkle, Chief Evangelist for Rovi presented their market findings on how consumers interact with their various devices for entertainment.  [He also explained that “Rovi”, the new name for Macrovision, was created by taking the 4 middle letters of the old company name.]  Again, the network connected TV with an array of widgets may be a powerful device to lead viewers into the ever expanding video marketplace.   It may lead to cable and satellite disconnects – that is if there is another outlet for time sensitive programs such as Idol, awards shows and sports.

Verimatrix “Multi-Rights” and Watermarking:  With this move toward non-traditional distribution of content, license holders have employed a variety of competing, and non-compatible, security solutions.   Steve Christian, VP of Marketing at Verimatrix, explained their recently introduced “Multi-Rights” system during his presentation.  By combining several DRM licenses into one bundled package, Verimatrix can detect, decode and transmit secure video files from a variety purchasing sources to either PC, TV or Mobile output devices for the consumer.  This technology is absolutely required to give consumers the choice of purchasing methods and playback devices.

For lower value paid content protection, the Verimatrix hidden video watermark provides a degree of deterrence.   Steve explained that the main value of the watermark is to make the casual illegal copier think twice about their actions if they know the content they downloaded and posted for others to copy can be traced back to them.  It also gives license holders a tool to track down serious pirates once they locate illegal copies of their product on the net.  Verimatrix will decode the watermark and provide customer information to the license holder for potential legal action.

Odds & Ends – Ads and Search:  There were actually too many topics covered at this show to report in one post.  However it is worth noting that Targeted Advertising and Simple Content Search remain hot topics of conversation.  Monetizing the viewer experience may more and more depend on specific ads which, hopefully,  keep viewers tuned into the message.  And the need for a viewer friendly search and recommendation engine for the growing amount of content has never been more evident.

One Last Thought on Cisco’s Home Video Conferencing:  With their recent purchase of Tandberg, Cisco’s Ken Morse did say they were definitely expanding their video conferencing offerings to include the average consumer.  This blogger is still not convinced that there is a business there.  As stated in previous posts regarding the Verizon / Cisco collaboration on this product offering, everyone who has tried to crack this nut has failed.  From the “Picture Phone” to the most recent offering by Telmex, network video conferencing has not been made appealing to the everyday consumer.  For business, yes; the expense can be justified by a reduction in travel and carbon footprint associated with trips to clients and remote offices.   Instead of attaching a camera to the living room TV, why not use the video camera in almost every cell phone?  Or, maybe a “cell phone dock” for the TV would do the trick?  Perhaps it will be unveiled at STB 2010.  I can’t wait.

Keep pushing forward


Jeff Vinson

[You may contact Jeff directly for consulting or full time employment opportunities.]