As the industry grapples with the business models around mobile broadcast TV, Roy Isacowitz, mobile marketing manager of digital TV software specialist NDS, gives Keith Dyer an insight into how the industry might develop, and where the key battles will be fought.
Mobile Europe:
Roy, as a company with activities across the pay and digital TV spectrum, and not just mobile, how would you portray the state of mobile broadcast TV development right now.
Roy Isacowitz:
We are a big player in TV in general, providing DRM, EPGs and a range of other software for TV on different platforms. I think our approach to mobile TV is that, in time, stand alone services are not going to be where the real money is. I believe that customers will not put up with separate subscriptions for television at home, and on the mobile. Eventually consumers will want to pay once, and get an entertainment service wherever they are or whichever device they are using. So this means service delivery will really become about cross platform TV, and you can already see this happening if you look at the partnership in the USA between Sprint and the cable operators. So that’s the focus for NDS, but more importantly I think our focus represents where the industry is heading
ME:
You’re talking about breaking down the commercial barriers between the different platforms, then.
RI:
Well, of course, one subscription that allows me to access the same channels wherever I am on whatever device sounds simple, but from a technical viewpoint it is very difficult to achieve. TV markets have developed around vertical markets, and are still developing along those lines. Even within mobile broadcast there are vertical markets developing around the different standards. Making these things horizontal? Well, clearly you have the obvious technical issues, for example you have to encode the video differently for a widescreen plasma TV than for a small handset. But the bigger picture is arriving at a common commercial and business model across the platforms.
ME:
And how might those models start to develop?
RI:
In many different ways. I’ll give you an example: A user subscribes to a TV operator, which manages that user’s rights. That operator will also have partnerships and systems
in place to enable place and device shifting and so on, within that one subscription. So, the other partners act as carriers for the one holding the subscription. Let’s say you get your satellite TV from X, and you have a mobile subscription to Y. X will manage your TV subscription and will have the partnership and systems in place to enable you to receive your mobile TV via Y, which is just a carrier for X. If you look at what’s happening in the USA right now it’s fascinating.
Sprint is a cellular operator, but it is also making a huge investment in WiMAX and is partnering with several of the largest cable operators, in the Pivot partnership. I think that’s a really exciting series of relationships, which has the potential to provide real Quad-play.
ME:
Do you think the industry is necessarily going the most direct route to this cross platform approach?
RI:
Well, I think one issue is that mobile TV so far has followed a very linear TV model, which is exactly the model that the 18-34 age group, the very people that the mobile operators are trying to reach with these services, are starting to reject in the fixed world. There’s a weird irony there. There’s a danger that the mobile world is not learning the lessons of the fixed line world. I’m a great believer in the future of mobile broadband and I’m not sure that operators beginning to do mobile broadcast today are taking it into account sufficiently. There’s also huge pressure on prices. I was told recently by an operator that the current price point that the market can bear is five, that’s five dollars, pounds or Euros, a month for mobile TV. I don’t think operators can provide even a basic service at that price. So this pressure on prices will lead to free-to-air and ad-supported models. And that price pressure point is where converged services, leveraging content acquisition costs and providing a greater number of services, begin to make sense.
Of course, right now the flavour in mobile is broadcast. FLO and DVB-H, particularly OMAS BCAST smartcard profile, are likely to be the dominant technologies over the next few years. It’s pretty clear that we will see significant increases in the number of operators launching mobile broadcast services in the next few years, and the cross platform approach I describe is some way off.
ME:
What do you think might serve as the catalyst for this transition to a cross-platform approach?
RI:
I’m a huge believer that WiMAX and LTE will be transformative here. I think if you look at what is currently called mobile broadband, most of what is available is a walled garden in one way or another, and the networks usually aren’t built for massive amounts of concurrent broadband users. WiMAX and LTE will provide real broadband, which, like current fixed line networks, can carry live video and IPTV. So broadband will start to give broadcast a real run for its money.
Clearly, mobile broadcast will have the momentum for the next few years, and broadcast, of course, is very good for what it does. But I see a future market for hybrid devices in which broadcast and broadband will complement each other. Converged platforms will provide economies of scale, which is why I think that price pressure, even within a vertical mobile broadcast market, will drive cross-platform take-up. And, of course. companies that have the wherewithal to provide cross-platform solutions will have a strong differentiator in the market.
ME:
Where will NDS play in this move – first to roll out mobile broadcast, but also the cross platform trend?
RI:
Well, first, there are very, very few companies that can afford to develop and maintain all the broadcast standards out there, never mind provide the range of products that NDS supplies, from DRM to interactive applications. So you have to try to forecast where things are going. With FLO, our Simulcrypt synchronizer product is being used to allow different conditional access systems to work side by side across the network, forming the basis for their open CAS platform.
In Europe we are a strong supporter of the OSF (Open Security Framework), one of the DVB-H flavours, and will be offering OMA BCAST gtowards the end of this year. In China we are very active in CMMB, with handset and SIM integrations now underway in order to provide a full end-to-end platform. And in Korea we are working with a consortium of six broadcasters on a planned TDMB project.
For operators that have a convergence strategy, and most leading telcos and broadcasters do have convergence on their roadmap, our experience adds great value. If you look at Vodafone, and its recent purchases of fixed line providers, Verizon and its IPTV play, as well as Bharti in India and Sistema in Russia, clearly these operators are committed to convergence. TV will be a crucial part of that strategy. That’s not to say, though, that we aren’t looking at doing business with smaller, or predominantly mobile operators as well.
ME:
OMA BCAST is intended to increase interoperability between headend and handsets, is it not?
RI:
Certainly it makes things a lot easier and more flexible at the device level, as it does not demand integration at the level of individual SIMs and handsets. In another sense, though, it’s a very broad standard, which provides little leeway for the vendor to distinguish itself, to provide unique points of differentiation to its customers. There are a couple of options for us, as a conditional access company.. One is that providers of OMA BCAST solutions will compete on price, which means none of us will ever make any money. There is the possible scenario, when OMA BCAST handsets are widespread, that there’s a big OMA BCAST hack, at which point operators will realize that the standard does not provide sufficient security and will be looking to the vendors to provide non standard security solutions to deal with the hack. I stress that this is no way a business strategy! It’s more a point about where increasing standardisation and commoditisation could lead.
The other approach, our approach, is to offer a wider and better range of products and services, which NDS has in its ESGs, interactive services and applications. The third thing, again, is that we certainly believe there will be a significant shift to convergence. Most major operators already have convergence on their roadmaps and it is an important part of our roadmap.
ME:
You mention the ESG there. It brings to mind the question of whether the software on the devices themselves, the UI and the EPGs will also become increasingly crucial.
RI:
That’s an area that’s wide open. Nothing I’ve seen to date in that space has wowed me, I mean there’s been no EPG that’s amazed me. Where UIs are concerned, I still think all UIs are too linear, dominated by traditional TV, without making enough use of new technologies such as Flash and touch screen manipulation. But also there is potential around location based services, and interactivity. So there’s a lot of work to be done in that area. We’ve got years of experience on TV EPGs, and are transferring that to mobile, where the industry is still just scratching the surface of the potential.
On interactivity we have an advantage because we have been working in this area a long time, with broadcasters such as Sky, for instance, and that’s without a return path, which makes it a lot more difficult.
I also think that the phones or devices themselves are going to change. Partly, again, as a result of the WiMAX influence, I think we’ll see wider screens and larger devices, especially when operators see the quality of experience improve along with those devices.
ME:
So given your role within the IPTV world, how would you characterize your presence within mobile broadcast itself, in Europe?
RI:
NDS comes from the TV space, so when working in areas which aren’t our natural milieu, such as mobile and fixed line telco, we find it beneficial to work with partners which have been in the space for a long time. That was the case with IPTV, where we have partnered very successfully with Alcatel-Lucent, and we intend following that model in mobile as well. We are currently beginning the process of assessing and establishing mobile partnerships. Of course, many of the large players are also very active on other networks, so we anticipate that at least some of these partnerships will be pretty wide-ranging.
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