IPTV and Internet Video

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2 Broadcast is dying. Viewer choice is the future. Read this book by Greenfied and Simpson, two industry insiders, and get a jump-start on the technoogies and business trends that wi be mainstream before you know it. Patrick Barry, VP Connected TV, Yahoo! Greenfied and Simpson s new version of IPTV and Internet Video is a must-read for anyone working in onine video services to get an understanding of the subject from Viewer, Advertiser & Pubisher perspectives. Keva Desai, Director, Product Management, Googe TV Every teevision executive needs to have a strategy for deaing with the growth of the Internet for media deivery. Greenfied and Simpson wi not ony hep you get your pan started, they wi hep you truy understand the seismic shifts that are going on today. Shey Pamer, President, Nationa Academy of Teevision Arts & Sciences, NY This book is an outstanding resource for convergence professionas who are racing to further monetize the ever-expanding word of broadband internet media. Greg Dougass, Accenture Goba Managing Director, Media and Entertainment Practice Taking your content to the Web? It s Broadcasting, but not as we know it. If you re having troube keeping up with the changing word, reax! In this book, Howard and Wes take us through a we need to know, painy and simpy. John Varney, former BBC CTO This is the right book at the right time. Greenfied and Simpson offer a cear and compeing overview of the emerging IPTV space that is at once an accessibe introduction to the basics and a guide to thinking through issues of impementation and strategy. Pau Saffo, Siicon Vaey Forecaster and Consuting Associate Professor of Engineering, Stanford University Like DBS before it, IPTV is coming, ike it or not. It s proiferating gobay, thus broadcasters must understand the impact of this technoogy. IPTV & Internet Video provides a comprehensive view to this critica, emerging industry deveopment in a singe, we-conceived voume. Technoogy and media professionas beware: this wi change your business. Authors Greenfied and Simpson get it done here, from micro to macro. Jimmy Schaeffer, Chairman, Senior Research Anayst, The Carme Group From video content creators, aggregators, and distributors to IT professionas and media executives, everyone can take something from this book. The straightforward yet detaied approach arms you with the information you need to make highy informed technoogy and business decisions on IPTV and Internet video. A vauabe too for making sense of this rapidy evoving industry. Sandy Macom, Executive Producer, CNN.com

3 Driven by advances in digita technoogy, the media industry is experiencing a transformative shift in IPTV and Internet video that wi change our business modes, deivery patforms, and the consumer experience. It is imperative that those of us working in this rapidy evoving fied have a variety of resources to hep educate and guide us as we forge ahead. Abert Cheng, Executive Vice President, Digita Media, Disney-ABC Teevision Group This new edition of IPTV and Internet Video brings the reader up to speed on what he needs to know. It is destined to inform and infuence those responsibe for navigating the next generation of video services to financia growth. It reveas the keys to how a new personaized, sociaized medium wi grow beyond recognition. The insight this book provides wi be very usefu to any executive who needs to oversee an IPTV network upgrade. In this singe voume, a of the key terminoogy is defined, and the key economic drivers and pitfas are identified and ceary expained. Matt Bross, BT Group Chief Technoogy Officer (British Teecom)

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6 IPTV and Internet Video: Expanding the Reach of Teevision Broadcasting 2nd edition Wes Simpson and Howard Greenfied

7 Foca Press is an imprint of Esevier 30 Corporate Drive, Suite 400, Burington, MA 01803, USA Linacre House, Jordan Hi, Oxford OX2 8DP, UK Copyright # 2009, Esevier Inc. A rights reserved. No part of this pubication may be reproduced, stored in a retrieva system, or transmitted in any form or by any means, eectronic, mechanica, photocopying, recording, or otherwise, without the prior written permission of the pubisher. Permissions may be sought directy from Esevier s Science & Technoogy Rights Department in Oxford, UK: phone: (þ44) , fax: (þ44) , E-mai: permissions@esevier.com. You may aso compete your request on-ine via the Esevier homepage ( by seecting Support & Contact then Copyright and Permission and then Obtaining Permissions. Library of Congress Cataoging-in-Pubication Data Greenfied, Howard (Howard Aan) IPTV and Internet video : expanding the reach of teevision broadcasting / Howard Greenfied and Wes Simpson. 2nd ed. p. cm. Rev. ed. of IPTV and Internet video : new markets in teevision broadcasting / Wes Simpson & Howard Greenfied ISBN Internet teevision. 2. Teevision broadcasting. 3. Digita video. I. Simpson, Wes. II. Tite. TK S dc British Library Cataoguing in Pubication Data A cataogue record for this book is avaiabe from the British Library ISBN: For information on a Foca Press pubications visit our website at Printed in the United States of America

8 Contents Dedication Acknowedgments About the Authors Introduction Who Shoud Read This Book Features of This Book The Corner Office View Reaity Checks Gossary Chapter Topics (Organization of this Book) Summary Foreword xi xiii xv xvii xix xix xix xx xx xx xxii xxiii Chapter 1 What is Internet Protoco, and Why Use it for Video? 1 The Internet Protoco 2 The Market for IP Video 2 Arguments in Favor of IP Video 5 Arguments Against IP Video 8 Reaity Check 11 Summary 14 Chapter 2 Types of IP Video 15 Two New Categories 16 Comparing the Networks 17 Reaity Check 27 Summary 28 Chapter 3 Business Modes 31 IPTV 33 Internet Video 40 Reaity Check 43 Summary 45 Chapter 4 Network Overviews 47 Constructing an IPTV Network 48 Constructing an Internet Video System 57 Reaity Check 63 Summary 66

9 viii Contents Chapter 5 IP The Internet Protoco 67 A Simpe Anaogy 67 What Is a Packet? 68 How IP Fits In 69 Types of IP Networks 70 Internet Protoco Addresses 73 Key Parts of an IP Network 74 Transport Protocos 75 Muticasting 76 Reaity Check 80 Summary 81 Chapter 6 Video Compression 83 Why Compress? 84 Groups of Pictures and Why They Matter 85 Moving Pictures Experts Group 88 Audio Compression 90 Microsoft Windows Media and VC-1 91 Other Compression Technoogies 92 Digita Turnaround 94 Reaity Check 94 Summary 96 Chapter 7 Maintaining Video Quaity and Security 97 Factors that Affect Video Quaity 97 Conditiona Access 103 Digita Rights Management 106 Reaity Check 107 Summary 108 Chapter 8 Sizing Up Servers 111 Video Servers 112 Video-on-Demand Servers 114 Advertising Servers 116 Live Streaming Servers 117 Encryption and Rights Management 118 Reaity Check 119 Summary 121 Chapter 9 The Importance of Bandwidth 123 Digita Subscriber Line Technoogies 124 Digita Subscriber Line Access Mutipexer 129 Home Gateway 129 Mutipe Teevisions 131 How to Cacuate Bandwidth 131

10 Contents ix Channe Changing 133 Bandwidth for a Tripe-Pay, HD Future 135 Reaity Check 136 Summary 137 Chapter 10 Set-Top Boxes 139 Basic Functions 140 Middeware 147 Set-Top Box Seection Issues 150 The STB of the Future 150 Reaity Check 151 Summary 152 Chapter 11 Internet Video Technoogies 153 Types of Internet Streaming 154 Commercia Payers for PCs 161 Content Creation Workfows 165 Reaity Check 169 Summary 171 Chapter 12 The Future of IP Video 173 Great Expectations 178 Portabe Media: IPTV to Mobie Devices 181 Voices from the Industry 184 Summary 190 Gossary 193 Index 209

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12 Dedication Thanks to my oving wife, Laurie, and our fantastic chidren, Tayor and Cameron, for giving me your support and gente encouragement to embark on this fascinating journey. Wes Simpson Dedicated to my parents, Sam and Rose Greenfied, for ifting me on their shouders and keeping me in their great hearts. Howard Greenfied

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14 Acknowedgments The authors acknowedge the many industry experts and thought eaders whose open, generous diaogues and vision have provided insights that contribute so significanty to our work. This book benefits from their ideas and from the infuence of their efforts upon tomorrow s technoogy, business, and cuture. We aso saute a great many other kind individuas cose to our work and dreams for their hep and support in puing it a together to accompish this awesome task: Angeina Ward, Beth Miett, Joanne Tracy, Mark Weiss, Oaf Niesen, Keith Gaitz, Gene de Vore, Justin Radke, Pierre Costa, John Trimper, Pau Atwe, Graeme Packman, Cesar Bacheet, Jon Haass, Dan Gimor, John Markoff, Françoise Groben, Barbara Bouchet, Ephraim Schwartz, Susan Daffron, Jean Anderson, Bi Vetrop, Steve Schneider, Care Henjum, Keva Desai, Mark Vaahovic, and Dan Oakey.

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16 About the Authors Wes Simpson is president and founder of Teecom Product Consuting, an independent consuting firm that focuses on heping companies deveop and market video and teecommunications products. He is a frequent speaker and anayst for the video transport marketpace. In the past five years he has spoken at IBC, NAB, BroadcastAsia, SMPTE, VidTrans, and a number of other conferences. Wes is author of the we-received book Video Over IP: A Practica User s Guide to Technoogies and Appications, 2nd edition pubished by Foca Press in Wes has more than 28 years experience in the design, deveopment, and marketing of products for teecommunication appications. Before founding Teecom Product Consuting, he was COO of VBrick Systems, Inc., a manufacturer of MPEG video equipment. Earier, at ADC Teecommunications, Wes was the director of product management for the DV6000, a market eading video transport system. He previousy hed a variety of marketing and engineering positions in the teecommunications industry. Wes was a founding member of the Video Services Forum and a member of its board of directors from 1997 to He hods a BSEE from Carkson University and an MBA from the University of Rochester. Howard Greenfied is president of Go Associates, a goba consuting firm that heps companies bring technoogy to the marketpace. He is a digita media and business deveopment strategist, as we as an accompished coumnist pubished around the word. Howard has hed senior management and consuting positions with Sun Microsystems, Informix Software, British Teecom, and Appe, Inc. and was responsibe for creating and eading Sun s first Media Lab. For the ast twenty-five years, Howard has been a successfu technoogy deveoper, manager, educator, and writer. In addition to front-ine coaborative deveopment engagements with arge organizations ike Xerox PARC, Ericsson, and the American Fim Institute, he has hed eadership roes in numerous eary stage companies. These incude positions with start-ups in onine video editing, streaming, content management, and ad insertion. Three of these were subsequenty acquired by Ariba, IBM, and Microsoft. Howard has presented and moderated at conferences throughout Siicon Vaey, Europe, and Asia. He has served on government and cutura advisory boards that incude the State of Caifornia, UK Trade & Invest, CNET, and others. His writing

17 xvi About the Authors covers the convergence of the Internet, Broadcast, and Teecommunications industries. Howard hods a graduate degree in Interactive Technoogy from Stanford University. The authors wecome any comments, questions, or insights from readers. Pease fee free to send e-mai to Wes at wes.simpson@gmai.com and to Howard at howard@go-associates.com.

18 Introduction The word is changing very fast. Big wi not beat sma anymore. It wi be the fast beating the sow. Rupert Murdoch The traditiona business mode for broadcasters, which has worked reasonaby we for the past few decades, is starting to break down. Increasingy, consumers are demanding (and starting to receive) their video content in ways that were impractica even a few years ago. Today, biions of videos are streamed every month and miions of subscribers have signed up for IPTV services around the word. Consider the foowing. Teevision Has Moved to the Web. Viewers around the word tuned in to watch the 2008 Oympics in record numbers using their PCs and other Internet-connected devices (There were 2.3 miion views for Michae Pheps s second god meda win.) In the United States, the number of stream views and cip downoads increased by a huge factor between 2002 and YouTube served 5.4 biion streams to 89 miion unique viewers in March 2009 whie Huu deivered 348 miion primetime and movie programming streams. 1 DVR Time Shifting and Ad-Zapping. The use of digita video recorders in the United States has skyrocketed over the past few years, with a variety of stand-aone soutions as we as those integrated into set top boxes from sateite and cabe teevision providers. In 2008, 20 miion DVRs were expected to be added to homes around the word. The 56 miion DVR homes tota that year are forecast to grow to over 208 miion by Broadcast advertisers have grown increasingy upset by the practice of commercia skipping and the oss of their abiity to contro the timing when viewers watch ads for specific events, such as movie openings or store saes. Media Has Gone Mobie. With more than a biion mobie phones sod each year, they are becoming ever more video capabe. So-caed smart phones wi, in fact, comprise more than haf the mobie phones sod in the next few years. The iphone 3G is in 70 countries, outseing the Backberry Q with 200 miion mobie App Store appication purchases/downoads through the same period. Aso, new standards for mobie fie and stream deivery are often based on IP technoogy, indicating an increase in market penetration in coming years. 1 Niesen Onine, Apri Informa Teecoms and Media,

19 xviii Introduction Everyone Wants to Be a Producer. Meanwhie, a wide range of user-generated video content continues to drive viewers to sites ike youtube.com, which generated more than 176 miion stream views per day in March Increasingy, various audiences are perfecty happy to watch certain types of video content on norma PC dispays. Podcasting Is Officia. When Adam Caroa eft mainstream radio in eary 2009 for a podcast-ony presence, his podcast was downoaded over 1 miion times in the first week it was avaiabe, which greaty exceeded origina expectations. 3 By 2013 there is expected to be a podcast audience of neary 38 miion in the United States aone. 4 You Are Now Free to Paceshift. Devices from Sing Media, Appe, Vudu, Roku, and many others are now aowing consumers to move content among severa different viewing devices, such as PCs, home teevision sets, and portabe media payers. What had been ony whisperings about the promise of new digita media networks for the ast 25 years has become an audibe roar and a commercia revoution is buiding. How wi traditiona broadcasters compete with the surge of disruptive technoogy ahead? One way is by understanding and harnessing some of the key technoogies that support these competitive video outets. Both IPTV and Internet video depend on IP technoogy, something not competey foreign to the broadcasting industry. Teevision broadcasters have ong been intensive IP technoogy users. A wak around any modern video production faciity wi revea a types of devices that use IP technoogy, from digita editing stations to fie servers to payout contro systems. It is aso highy unusua nowadays to find a broadcast executive who doesn t use some type of IP-enabed device, such as a aptop computer, portabe e-mai device, or voice over IP teephone. However, unti recenty, it has not been feasibe to deiver broadcast-quaity video to consumers over IP networks. Today, with the growth of high-speed networks and the adoption of IP technoogy by carriers around the word, video deivery over IP networks is not ony feasibe, it is becoming the ony way to reach some categories of viewers. The key for both estabished and aspiring video content distributors wi be to understand how IP technoogy wi affect the ways viewers watch and pay for video content. This book expores both the technoogies of video deivery and the business aspects, as IP increasingy permeates through production, deivery, and business practices. IP technoogy creates a wide array of new ways to deiver content to consumers, particuary when compared to traditiona inear broadcasting supported by advertising. From a business perspective, IP video opens up many avenues for generating revenue, incuding customer payments in many forms and opportunities for sponsorships and advertising. The ease of impementing new technoogies on an IP patform means that different business modes can be supported. It s a combined creative chaenge and window of opportunity

20 Introduction xix Who Shoud Read This Book This book is focused on providing readers a soid understanding of the technoogies and business issues surrounding IPTV and Internet video. Care is taken to present major concepts ceary whie staying above the specific detais of individua impementations. Case studies are used to provide rea-word exampes of this technoogy being used to deiver actua services to paying customers. Executives, managers, and technoogists wi benefit from the information in this book. Executives wi find a guide to many different technoogy and business options that can be used to attain strategic goas for many kinds of organizations, ranging from arge estabished media and teecommunications providers to sma start-ups. Managers wi find a variety of technoogies and business modes that can be used to achieve their organizations strategic video deivery business goas. Technoogists wi find overviews of a number of different toos and techniques that can be used to construct video deivery systems, aowing them to quicky identify areas for further research and paths to impementation. Many different industry segments are being substantiay affected by the current wave of IPTV and Internet video deivery systems. Existing broadcasters wi be introduced to a variety of techniques that can be used to deiver content and new ways to enhance viewer experiences. Teecommunications network operators wi discover a range of services and deivery modes that wi enabe their companies to benefit from existing pant and infrastructure investments, as we as providing a guide to new possibiities for network migration. Media providers and content owners wi see a range of choices that can be used to deiver content to viewers in both oca markets and around the gobe and wi see different business modes for maximizing the vaue of their assets. IT architects and software deveopers wi get a high-eve view of ways that appications, middeware, and server systems are being integrated into media deivery, creating new, hybrid network operations. Investors wi gain a deeper understanding of the technoogies and business practices that impact this widy diverse marketpace and generate new investment modes. The increased abiity to identify specific sectors that warrant their support wi drive cearer investment decisions. Features of This Book This book has been designed to make it easy for readers to find a wide variety of information quicky and efficienty. The foowing three features compement the main focus of each chapter to provide even more insight for decision makers. The Corner Office View Paced near the beginning of each chapter is a brief Corner Office View section. Each of these sidebars offers direct quotations from infuentia industry executives pioneering the future who offer meaningfu perspective on the industry and its current direction.

21 xx Introduction Reaity Checks Because this book is aimed at decision makers who need to understand both the benefits and the drawbacks of this new technoogy, we have added a section at the end of each chapter to serve as a Reaity Check. Sometimes, this section is devoted to appication studies or market data that pertain to the subject of the chapter. Other times it is focused on issues or concerns that may serve to imit the widespread depoyment of a technoogy. Either way, we hope to highight issues that wi hep readers get a better understanding of the wid and wonderfu word of IP video. Gossary Understanding the jargon used in this industry is essentia to gaining a good appreciation of the important issues facing executives. This book incudes an extended gossary, with more than 180 technica terms defined in crisp, cear anguage. Chapter Topics (Organization of This Book) Tweve chapters cover key IPTV and Internet video technica depoyment and business monetization topics. Each chapter is designed to address an important issue for broadcasters and service providers. Readers are encouraged to choose whatever chapters interest them in any order, with the caveat that some of the more fundamenta topics are described in the eary chapters. In some cases, the atter chapters wi refer to information presented in eary chapters. Chapter 1: What Is Internet Protoco, and Why Use It for Video? This chapter anayzes the basic motivations for using IP networks to deiver video services. We aso take a ook at the market trends driving the rapid growth in this market. Chapter 2: Types of IP Video This chapter focuses on four types of video service that are commony deivered over IP networks: IPTV (Internet Protoco Teevision), IPVoD (Internet Protoco Video on Demand), Internet TV (Internet Teevision), and Internet video. Each category is expained, and various system attributes are compared across the various deivery methods. Chapter 3: Business Modes Many different business modes are being tried for both IPTV and Internet video. We cover equipment costs, programming costs, and viewer payment methods. The chapter concudes with an in-depth ook at a rea IPTV system that met its financia goas ahead of pan.

22 Introduction xxi Chapter 4: Network Overviews This chapter covers the basic architecture of both IPTV and Internet video systems. A of the key eements of both types of systems are described, incuding hardware and software functions. Chapter 5: IP The Internet Protoco IP is essentia for IPTV and Internet video. We provide a good introduction to IP and some popuar types of devices that support it. Muticasting, a key concept for IPTV, is aso expained. Chapter 6: Video Compression Video compression is a requirement for essentiay a IPTV and Internet video systems. We begin with a discussion of the basics and then describe the most popuar compression systems the MPEG famiy, Microsoft Windows Media, and others. Chapter 7: Maintaining Video Quaity and Security This chapter focuses on video quaity and security. Video and network impairments are described, aong with the techniques system designers have used to minimize or compensate for those errors. Severa techniques for both conditiona access and digita rights management are described. Chapter 8: Sizing up Servers Servers are widey used for IPTV and Internet video systems. Severa technoogies are described, incuding a focus on servers used for VOD, advertising, and ive streaming, which are a key for IPTV and Internet video systems. Chapter 9: The Importance of Bandwidth Many different services compete for a imited amount of IP bandwidth. We examine the ecosystem of DSL technoogy and home networks and give an exampe of network bandwidth cacuation. Chapter 10: Set-Top Boxes The set top box is a crucia component of any IPTV network. It must receive video packets, decompress them, and dispay images in rea time. The STB and middeware systems must aso hande a of the user interaction for an IPTV system. Chapter 11: Internet Video Technoogies A variety of different technoogies can be used for Internet video services, incuding true streaming, downoad, and progressive downoad and pay. We ook at each of these technoogies and the associated protocos and media payers.

23 xxii Introduction Chapter 12: The Future of IP Video This chapter ooks at a range of possibe futures for both IPTV and Internet video. Business drivers, advanced technoogy, and mobie media devices are a discussed. We wrap up with a ook through the eyes of business eaders, soothsayers, and technica wizards as they try to discern the future from a variety of perspectives. Summary Throughout this book, you wi find discussions about the future and about some of the forces reshaping video as a medium. Incuding this perspective has been intentiona. IP has neary unimited creative potentia for reinventing the way common tasks are accompished and how entire goba architectures are impemented. Without a constanty improving Internet functionaity, this book coud never have been written. It s cear that the future is going to be different from the broadcast and communications environment of today. It is hoped that the reader wi enjoy the insights and benefit from the expertise we ve strived to provide. Moreover, we trust this book wi provide a key to understanding the vast range of opportunities that wi invove us a as technoogy and business deveopers and as an audience in a new word of media.

24 Foreword In 1999, my objective at Broadcast.com was to turn the Internet into a medium that woud perform much ike DirecTV of the Web. We were on a mission to reinvent broadcast communications. Today, a decade ater ooking ahead to 2010 and beyond, the industry mission sti seems to be the same: finish the bridge between on-air and onine programming. I ve aways beieved that the evoution of video woud create opportunity, but the paying fied has changed and the stakes have gone way up. Broadcast-quaity SD and HD video, combined with the reach of the Internet, are beginning to offer remarkabe new interactivity, personaization, and on-demand access for the viewer. As an industry, we ve worked part way through the basic chaenges of IP networks, bandwidth, compression, three-screen access, and a series of devices from set top box, PC, and smart phone to new business, ad, and service modes. What we re going to see in the next phase is break-away performance in new features, service offerings, and resuting revenues. In this book, Greenfied and Simpson expore both the technoogies of IP video deivery and the business impacts of these new deveopments. IP video presents a wide range of new ways to deiver content to consumers. From a business perspective, it opens up many avenues for generating ROI, incuding customer payments in many forms, and opportunities for sponsorships and advertising. The ease of impementing new technoogies on an IP patform wi spawn a combined creative chaenge and window of opportunity. We are witnessing breathtaking change in the way that video is deivered. A medium that once primariy provided one-size-fits-a entertainment for the masses has become a versatie data type easiy integrated over your set top box or browser for news, sports, and entertainment, as we as within-text documents, emai, socia networking, commercia transactions, and IT enterprise appications. But any potentia deivery system needs to make scae and make good business sense to content providers if it is to monetize to its fu potentia. The seismic shift in the market is driving the search for cear, concise information that can be used to make better-informed decisions. This market transformation and new direction is exacty where IPTV and Internet Video focuses its attention for the reader. As one chapter header begins: In five years, says Bi Gates, peope wi augh at the TV we ve had up to now. But how wi traditiona broadcasters compete with the surge of disruptive technoogy ahead? Changes that pose an upheava for many content producers, advertisers, and business managers wi

25 xxiv Foreword provide a once-in-a-ifetime opportunity for others to gain advantage and benefits in the media word on the horizon. What wi make the new TV great are more viewer choices and more content avaiabe wherever the viewers are at home or away, fixed or mobie, oca or remote. More content diversity, affordabe, and often free to the viewer wi be supported by new ways to find content and new socia aspects of watching content. We are now just scratching the surface. IPTV and Internet Video is a thorough executive briefing that provides soid descriptions of the key technoogies from a manufacturer-independent view. The authors, Howard Greenfied and Wes Simpson, interpret the state of the pay with the hep of front-ine industry eaders deivering vauabe insights and trend anayses. The bottom ine is consumers want the biggest seection of TV networks and on-demand content that we can get. We watch it aone. We watch it with friends. We watch it on our schedue from our DVR, our IPTV program guide, or our PC. We watch it when schedued so we can tak about it with our friends whie we watch or after we watch. Why? Because we know they are watching too. We want to watch whie we are on the couch and surf the entire universe of hundreds of channes offering thousands of hours of programming. TV is enmeshed in our ives. As John Varney, former BBC CTO, says in this book: We are starting to see the first signs of a coming together of socia networks, user creation and video distribution. If this is sustained, then the democratizing effects wi make this the most fascinating phase in broadcasting history. Being chief Maverick cheereader is exciting and fufiing. But my roots in today s TV revoution have provided a perspective on a new era of interactive visua communication. The momentum is reshaping our ives and deepy affecting goba business sectors. Broadcasting, entertainment, Internet, and teecommunications wi never be the same as video becomes ubiquitous. As we move ahead into a new decade, the time has never been better to expore the forces at work in the growth of this new industry. The best is yet to come, and this is the message provided and backed up by the authors of IPTV and Internet Video. We ve come a ong way since 1999, and video deivery innovation is ony continuing to acceerate. The adventure ahead wi hep us a earn and grow and hopefuy, prosper as our imagination is chaenged. Mark Cuban Founder Broadcast.com, HDNet, owner Daas Mavericks

26 1 What Is Internet Protoco, and Why Use It for Video? Nothing is reay rea uness it happens on teevision. Danie J. Boorstin, American socia historian and educator Before we try to define Internet Protoco (IP) and why it is a good soution for video, it s appropriate to consider what may be obvious that video transport over IP networks is not ony here today, but is poised to further dominate video service deivery for many years to come. As this occurs, new media communications services that can ony be imagined wi continue to arise aong with it. We are at the dawn of what may be the most fascinating phase in broadcasting history. We wi discuss the reasons more in this chapter, and the spread of IP wi form a subtext throughout the rest of this book. However, there is itte doubt that a arge and vigorous market continues to deveop though a confuence of improved compression, faster data inks, more sophisticated software, and evoving viewer habits. So, et s expore these trends then see how they impact network, technoogy, and business decisions today. Later, in the fina chapter, we ook at where these trends are ikey to ead us in the decades ahead. Digita video is a precisey timed, continuous stream of constant bit rate information, which commony works on networks where each signa is carried over a channe that is purpose-buit for video. In contrast, IP networks carry many different kinds of data from a huge variety of sources on a common channe, incuding e-mai, Web pages, instant messaging, voice over IP (VoIP), and many other types of data. With a of these data fowing together, the Internet is, at best, a oosey timed coection of information that is broken up into discrete packets. Ceary, IP and video don t make an idea marriage of technoogies. Despite this fundamenta incompatibiity, the market for IPTV and Internet video is expoding. Why? We, the answer to that question bois down to five basic arguments. Because broadband IP networks reach so many househods in deveoped countries, video service providers can use these networks to deiver video services without having to buid their own networks. IP can simpify the task of aunching new video services, such as interactive programming, video on demand (VOD), and targeted, viewer-specific advertising. The cost of IP networking continues to decine due to the massive voume of equipment produced each year and the existence of wordwide standards. IP networks can be found in every country in the word, and the number of users with high-speed Internet connections continues to grow at a rapid pace.

27 2 IPTV and Internet Video IP is a perfect technoogy for many other appications, incuding data transactions (such as e-mai or banking), oca area networking, fie sharing, Web surfing, and many others. The Corner Office View IPTV is a huge growth initiative. It s huge for us, it s huge for our partners. Count the number of TVs, and you don t have to get a ot of money per TV per year to start feeing kind of excited about the size of the opportunity. Steve Bamer, CEO, Microsoft 1 This chapter begins with a brief summary of the market trends for IPTV and Internet video. It then discusses in greater depth the five forces mentioned earier that are driving the migration of video into IP, foowed by a ook at some issues that need to be addressed by any system or organization trying to send video over an IP network. The chapter concudes with a case study of a successfu IPTV network instaation. The Internet Protoco Internet Protoco provides a mechanism for directing packet fows between devices connected on a network. IP is a common protoco used throughout the Internet and any of the miions of other networks that use IP. Without IP, chaos woud reign because there woud be no way for one device to send data specificay to another. At its heart, IP is a standard method for formatting and addressing data packets in a arge, mutifunction network such as the Internet. A packet is a unit of information (a coection of bytes) in a we-defined format that can be sent across an IP network. Typicay, a message such as e-mai or a video signa wi be broken up into mutipe IP packets. IP can be used on many different network technoogies, such as Ethernet LANs, ong-hau fiber optic and teephony networks, and wireess Wi-Fi inks. A number of different video services operate on IP networks. Appications range a the way from ow-resoution, ow frame rate appications such as Web cams to high-definition (HD) teevision and medica images. IP technoogy is incrediby widespread, and a huge variety of video technoogies can use IP networks. The Market for IP Video Because so many different video appications can be impemented over IP networks, it can be hard to quantify them, and any attempt to do so wi be outdated quicky. Nevertheess, a few facts and figures may be interesting: 1 IPTV Internationa, Voume 2, Issue 2.

28 What Is Internet Protoco, and Why Use It for Video? 3 AT&T originay roed out its U-verse SM IPTV offering in 2004 under the code name Project Lightspeed with the intention of making it avaiabe to 19 miion homes in the company s service area by the end of After panning an investment of $4.6 biion to make this a reaity, they reached a miion customers by the beginning of In November 2008, China s IPTV systems reached a miion viewers. China Teecom is investing 100 miion yuan per year to impement the IPTV network and wi set up a nationa IPTV business operating center to deveop and innovate new products and content offerings. Of the 1 miion Chinese IPTV customers, 700,000 are in Shanghai, where China Teecom pans to focus their deveopment efforts before bringing them to other parts of the country. 3 By September 2006, France Teecom aready had 421,000 ADSL Digita Teevision (IPTV) subscribers (an increase of 38% over the 306,000 IPTV subscribers reported June 30, 2006). 4 By the end of 2008, this number had increased dramaticay to 1,899,000. Figure 1.1 shows the subscriber growth over four years, with a cumuative annua growth rate of 120%. In October, 2006, Googe agreed to acquire YouTube, a eading Web site that aows users to view and upoad origina videos, for $1.65 biion. At the time, YouTube was deivering more than 100 miion video views every day and receiving 65,000 video upoads daiy. 5 By 2008, in September aone, 12.6 biion onine videos were 2,000,000 France Teecom IPTV Subscribers 1,800,000 1,600,000 1,400,000 CAGR > 120% 1,200,000 1,000, , , , ,000 0 Dec 04 Mar 05 Jun 05 Sep 05 Dec 05 Mar 06 Jun 06 Sep 06 Dec 06 2 AT&T Corporate press reease, May 8, France Teecom press reeases, Juy 27 and October 26, Googe/ YouTube joint press reease, October 9, Mar 07 Jun 07 Sep 07 Dec 07 Mar 08 Jun 08 Sep 08 Dec 08 Source: Teecom France Financia Reports and Coverage Network Digest Figure 1.1 France Teecom s IPTV subscriber growth,

29 4 IPTV and Internet Video streamed over U.S. broadband connections. Huu.com, an Internet video porta deveoped and supported by NBC and Fox and aunched in 2007, hosted more than 145 miion of those views. The 2008 Beijing Oympics were a goba onine video success story. NBC offered 2200 ive hours to Internet users with 75.5 miion streams served, doubing the streams offered and unique users for the 2004 Athens and 2006 Torino games combined. The 1.24 biion page views for the Beijing games were aso up over 100% from the miion views for Athens and Torino combined. 6 Market research firm MRG predicts that the number of goba IPTV subscribers wi grow from 24.4 miion in 2008 to 92.8 miion by 2012 (with service revenue totaing over $37 biion by that time). 7 See the Reaity Check section at the end of this chapter for more detaied IPTV and broadband subscriber growth trends. The number of appications for video transport over IP networks is arge and constanty growing. This book focuses on IPTV and Internet video, which are defined in detai in Chapter 2. However, a number of other appications that use video transport over IP networks deserve to be mentioned. Videoconferencing has moved out of the ream of dedicated rooms with speciaized teecom data circuits into the word of desktop PCs interfacing with IP networks. New initiatives by HP, Cisco, and others are deivering high-performance teepresence functionaity, giving users the iusion of being in the same room, whereas systems ony a few years ago were characterized by ow bit-rate depoyments suitabe for ow-resoution taking head video but not much ese. Web cams have become widespread, particuary for ow-cost, rea-time communication. Appications incude everything from security surveiance and business teeconferencing, to weather watching to socia networking. These systems previousy ran at ow frame rates (10 or fewer frames per second) but now have very impressive 30 frames per second specifications that make Internet communications very effective. Most video surveiance devices intended for use in security appications have migrated to IP technoogy. There are a number of reasons for this transition, but one of the most compeing is the abiity to use existing or easy-to-insta Ethernet data cabing in pace of coaxia video cabes. In these networks, IP protocos and Ethernet cabing are simpy used as means to provide point-to-point connectivity between cameras, video recorders, and dispays. In the word of professiona video production, IP networks are used for a variety of purposes (as is the case in many other modern businesses). IP networks are used to provide connections between video editing workstations and fie servers in a production studio. IP networks are used to transmit high-quaity video fies and ive feeds from remote venues back to production faciities. They are aso used to move video fies containing raw footage, finished programming, and advertisements to and from virtuay every studio, posthouse, and broadcaster in business today. Limeight Networks aone, for exampe, store over 4 petabytes of content on their network. 6 ¼262a7f83cc5b8c72&ei¼ IPTV Goba Forecast 2008 to 2012, Bi-Annua Goba IPTV Forecast, Apri Pubished by Mutimedia Research Group, Inc., A ist of these ports was ocated at in August 2006.

30 What Is Internet Protoco, and Why Use It for Video? 5 Not a of the aforementioned appications reate directy to the broadband focus of this book, but a of them contribute to a mutibiion-doar market momentum with IP as the video network protoco of choice. Arguments in Favor of IP Video There are a number of reasons companies and individuas decide to transport video signas over IP networks. Three of the most popuar revove around the fexibiity of IP networks, their ow cost, and the incredibe coverage that IP networks provide within an organization and around the word. Let s examine each of these arguments in more detai. Internet Protoco Network Fexibiity The number of appications of IP networks is truy staggering. One way to estimate this is to ook at the number of appications that have been assigned IP port numbers managed by the Internet Assigned Numbers Authority (IANA). Among the severa thousand registered ports are port 80 for the HyperText Transfer Protoco (http), port 25 for the Simpe Mai Transfer Protoco (smtp), and port 110 for the Post Office Protoco Version 3 (pop3), which are used for e-mai. Counting the number of IP ports is just measuring the tip of the iceberg of IP appications, as many other programs use the protocos that have these port assignments. For exampe, there are iteray dozens of e-mai programs that work on a variety of operating systems (Windows, Mac-OS, Linux, etc.), which a communicate by means of the ports defined for smtp and pop3. Many different devices support IP. In addition to desktop and aptop PCs, servers and mainframes with a variety of different software operating systems can be configured to use IP. In addition, many other devices in the video word have Ethernet ports to enabe a sorts of functions, ranging from simpe status monitoring and contro a the way up to HD video transport. Internet Protoco is aso very fexibe because it is not tied to a specific physica communication technoogy. IP inks have been successfuy estabished over a wide variety of different physica inks. One very popuar technoogy for IP transport is Ethernet, which is the dominant network technoogy in oca area networks. Many other technoogies can support IP, incuding wireess inks (such as Wi-Fi) and SONET and ATM teecom inks. IP wi even work across connections where severa network technoogies are combined, such as a wireess home access ink that connects to a cabe TV system offering cabe modem services, which in turn sends customer data to the Internet by means of a fiber optic backbone. For broadcasters, this fexibiity is important, but it is aso a chaenge. It is important because it gives broadcasters a choice among a arge number of technoogies and business modes that can be used to deiver content in new formats. It is a

31 6 IPTV and Internet Video chaenge because it is impossibe to choose a singe soution for deivering video over IP networks that wi suit a potentia viewers. Internet Protoco Cost Advantages Economics is where things start to get interesting, as IP technoogy has a very ow hardware cost. Virtuay a new PCs and aptops come equipped with Ethernet ports. A quick scan of the Web shows that Gigabit Ethernet interface cards (which operate at 1000 Mbps) can be purchased for as itte as $15. Other infrastructure, such as Ethernet switches, can be purchased for as itte as $10 per port. For other networking technoogies, such as ATM, SONET, or even SDI video routers, costs are typicay 5 to 20 times more expensive. Basic IP software is aso very inexpensive or often free. A major computer operating systems incude buit-in IP software stacks that support many different IP services without added cost to the user. This is important not ony in commercia appications, but aso for home users who might want to access Internet video services whie retrieving their e-mai. This is not to say that a IP video software is inexpensive far from it. The software necessary to put together a functioning IPTV deivery patform that is scaabe to hundreds of video channes and thousands of viewers can easiy cost miions of doars. The ow costs of IP networks are of great benefit to broadcasters for two reasons. First, ow cost means that much of the network infrastructure needed to connect a video source to a viewer has aready been purchased and instaed by potentia viewers; that which hasn t can be purchased affordaby by the broadcaster. Second, as viewer expectations for quaity and avaiabiity of content grow, putting upward pressure on network bandwidths, broadcasters can safey assume that the IP networks wi continue to expand in capacity (which has proven to be a safe assumption for every year over the past three decades). Internet Protoco Ubiquity Internet Protoco networks are truy pervasive in the postmiennia word. Both Antarctica and Greenand have more than 7500 Internet hosts each; the United States has 315 miion. 8 Private IP networks exist in hundreds of miions of homes and businesses around the word IP is the defaut technoogy today when peope want to connect two computers together in order to share a printer or an Internet connection. For the traveer, wireess Internet connectivity is increasingy avaiabe in hotes, airports, coffee shops, and via 3G mobie phone data networks in towns and cities around the gobe. High-speed data access ines are continuing to be instaed at a rapid rate in most deveoped countries. In the United States, data coected by the Federa Communications Commission s Wireine Competition Bureau show that by the end of 8

32 What Is Internet Protoco, and Why Use It for Video? 7 80,000,000 U.S. Residentia High Speed Lines 70,000,000 60,000,000 50,000,000 40,000,000 30,000,000 20,000,000 10,000,000 0 Jun 2002 Dec 2002 Jun 2003 Dec 2003 Jun 2004 Dec 2004 Jun 2005 Dec 2005 Figure 1.2 U.S. broadband growth trends, Source: Data provided for the Broadband Forum by Point Topic. Jun 2006 Dec 2006 Jun 2007 Dec , 74 miion househods had high-speed ines, which is an increase of more than 50% from the end of The United States is adding neary 1 miion broadband subscribers per month, and subscribers are expected to grow wordwide from 452 miion in 2008 to 876 miion by Figure 1.2 shows the trend in the United States for the past five years. For broadcasters, the goba reach of the Internet is both good and bad. It s good in the sense that anyone in the word with a suitabe network connection is part of the potentia audience for the broadcaster. (For exampe, it is perfecty possibe to see the oca weather radar for Connecticut from a hote room in Tokyo.) It s bad in the sense that the roe of the oca broadcaster can be fiscay undermined by the disintermediation capabiity of the Internet. (Viewers in a ocaity have no need to watch a Hoywood movie by way of their oca broadcaster s Web site when they can just as easiy get the content directy from the studio s fim ibrary.) Most teevision studios aso now offer their most popuar programs on their own and syndicated Web sites such as Huu, Veoh, and the Roku patform used by both Netfix and Amazon. The BBC ipayer is another exampe of this phenomenon. If you miss the origina broadcast, you can aways watch it ater. Appointmentbased viewing is dead. Moreover, many content providers are inventing new ways 9 In-Stat, October 16, 2008.

33 8 IPTV and Internet Video to monetize their media assets with various onine advertising formats, which is discussed ater. For many, the easiest way to get into a competitive U.S. or goba market is onine. The broadcast era is over, content is not king anymore...distribution is king, says MMAX Enterprises sports channe executive Chuck Vaughn. Maybe that s a temporary situation, says Vaughn, but the fragmentation has shifted everything on its head which is why everyone in Hoywood is nervous. Is Roku Reay IPTV? Purists formay consider IPTV a fuy managed broadband network service deivered through a set-top box. By that definition, the Roku box is not officiay IPTV, but after you ve used one for a month, it definitey provides a great TV experience. My understanding of IPTV, says Roku VP of Consumer Products Timothy Twerdah, is that they are managed and therefore imited to what they can monetize. But our box is about an open patform and getting whatever you want to. We don t beieve in disk drives, Twerdah tod me this month. They fai, they re noisy, and peope don t want them in their iving room. Weighing ess than a pound, the Roku supports composite, S-Video, component, and HDMI, as we as standard and high-definition modes at 16:9 720p and 480p (anamorphic). Providers digitize four different bit rates for each piece of content and Roku seects which to deiver based on the customer s broadband speed rate, ensuring no deays from rebuffering. A 1 Mbps Internet connection is a that s needed to watch over the Roku, which ooked to us the same as if it were a reguar broadcast being deivered over the teevision. The requirement for HD, however, is a minimum of 4 Mbps. 10 Arguments against IP Video Whie there are powerfu forces driving the use of IP networks for video transport, it is important to understand some of the potentia drawbacks of this new technoogy. The first argument is primariy economic and revoves around the history of many things on the Internet being free of charge. The second is technica and centers on the difficuty of taking smooth, constant bit rate video signas and adapting them for transmission over IP networks. The third argument focuses on the diemma of combining video signas that have very high demands for network resources on inks that must carry other traffic and determining which uses wi get priority. Let s ook at each one of these in more detai. 10 Meet the Roku, Howard Greenfied, IPTVi magazine, Apri 2009.

34 What Is Internet Protoco, and Why Use It for Video? 9 The Difficuty of Competing with Free In some ways, the Internet is sti deaing with some bad habits that were estabished in the eary days, when content was avaiabe for free to anyone who was abe to connect. This spirit ives on today in a variety of ways, particuary in the widespread use of iega fie sharing for vauabe music and video content. Any broadcaster hoping to se content over the Internet needs to be aware of these traditions and expectations and deveop a poicy to dea with them. One popuar method is to deiver the content for free, but to incude advertising on the Web site or inserted into the content itsef. Another method is to charge fees on a subscription or pay-per-view basis. Both of these options are discussed more in Chapter 3. Obtaining ega access to content can aso be a chaenge. Many content owners have separate icensing terms for different forms of distribution. For exampe, a movie studio wi have different terms and different icensees for each type of reease: theatrica, pay-per-view, subscription teevision, DVD, commercia teevision, and others. Creating a functiona team inside a network-based carrier s organization to obtain these icenses can be an expensive and time-consuming process. The difficuty of competing with free is no better represented than in the demise of recording industry revenues. One anecdote about the eary days of Napster conveys this we. 11 The conversation was with a father who had just surprised his teenage daughter with three music CDs that, through cose famiy research, he knew she woud ove to have. Her response on receiving the gift was, Dad! You bought these for me? Why didn t you te me? We coud have just downoaded them off the Internet! The power of free seems to have prevaied over the rush to itigate when content stakehoders such as RIAA and Viacom sought and sometimes won high-profie convictions against iega fie sharing. Theft of services has not become ess of an issue, but inevitaby some content wi be stoen by some users some of the time. Aso, as technoogy advances, the skis of encryption crackers wi increase, forcing improvements to be made to encryption agorithms that modern digita rights management (DRM) is based on. It is incumbent upon content owners to ensure that a of their vauabe content is protected with the atest avaiabe DRM technoogy. Accommodating Viewing Preferences Introducing new viewing habits into arge popuations of viewers can be difficut and time-consuming. Basic IPTV services cosey mirror broadcast teevision and cabe TV, but so do viewer expectations about these services. Viewers wi expect (and righty so) that these basic services on IPTV offer a simiar eve of video quaity and system performance to pre-existing forms of deivery. More advanced services, such as videoon-demand and interactive programming, may require viewers to deveop new patterns. 11 From

35 10 IPTV and Internet Video These habits aren t impossibe to change. For exampe, viewers have earned new habits and embraced digita video recorders where the 56 miion DVRs instaed gobay are expected to neary quadrupe to 208 miion by However, introducing new interactive services can be a ong and expensive earning curve. Pus, IP system operators must be conscious about competitors who create services that can work over their existing broadcast and cabe TV faciities. New service providers need to take these factors into account, particuary when creating business pans for exciting new services that may be highy profitabe but aso require a change in viewing habits. In other words, for IPTV to succeed, many fee that it either has to be a perfect but ess expensive TV option to what peope have now, as Broadcasting & Cabe Onine says, to offer the same variety of programming deivered by Comcast or DirecTV. It must either be offered for ess or it has to be a perfect compement to what peope have now. It can t just offer an aternative way of deivering content that peope aready have. 13 Network Jitters Whenever continuous signas such as video are siced into packets for transport over an IP network, difficuties can arise. These mainy stem from the need for the packets to arrive in a timey manner, and in the same order they were sent. When this doesn t happen, it paces a tremendous burden on the receiving device to reaign the packets propery, whie at the same time doing a of the processing necessary to produce the decoded video output. Some of these variations can be accommodated through the use of memory buffers in the receiving device, but these add a deay to the end-to-end video connection and engthen the time required to change channes. Broadcasters need to reaize that these potentia impairments exist and that there are methods for deaing with probems as they occur. Some of these soutions (such as increasing network bandwidth or repacing network routers) may not ony be expensive but aso impractica for networks that rey on the Internet. A Matter of Priority One of the great benefits of IP networks is the number of different appications that are supported. However, one of the burdens this fexibiity paces on network administrators is the need to prioritize the appications. Without a priority system, time-critica packets can run into deays caused by the congestion of packets from many different fows, which can happen surprisingy often on IP networks. Unfortunatey, the existing mechanisms for handing priority packets on private networks are imited at best. These schemes are aso useess on the pubic Internet, as priority routing is not impemented there. To understand why, consider the diemma of deciding which packets in the pubic Internet shoud receive priority. 12 Informa Teecoms & Media Goba DVR Forecasts report, 10/08, news/consumer/informa-teecoms-media-dvr-pvr-saes 13 Broadcasting & Cabe, This ink seems to not work though it appears the same as the one that *does* work which is: why_i_m_skeptica_about_ziion_tv.php March 4, 2009.

36 What Is Internet Protoco, and Why Use It for Video? 11 Each user wi naturay consider their packets to be more important than those of other users. Without some type of goba prioritizing or pricing scheme for different casses of packet services, efforts to add priority fitering to the Internet wi be impossibe. Inside private networks, priority systems can be used, but difficuties sti exist. Again, the probem arises from determining which types of signas wi get priority. The argument for giving video signas priority over other signas is cear, as video signas do not perform we if their packets are deayed or dropped. However, video signas are one of the argest users of bandwidth on most networks and can take up a significant portion of the avaiabe capacity. Hence, the diemma about choosing suitabe priority eves can occur on amost any type of IP network. Reaity Check For this chapter s Reaity Checks, we first expore an impressivey arge forecast that has been pubished for this market. Whie the amount of growth projected in this forecast is quite extensive it certainy isn t the highest growth projection that we have seen. In the second Reaity Check, we take a ook at the IPTV market in France, which must be caed a success by any measure. Market Forecast By any standard, the market for IPTV services has grown rapidy for the past few years, and industry observers generay expect that trend to continue. As can be ceary seen on the foowing charts, the pace of IPTV subscriber growth continues to acceerate. It is projected that there wi be 93 miion IPTV subscribers wordwide by 2011 and revenues wi approach $14B by Growth in 2008 broadband subscribers for the top 10 countries (Figure 1.3) and IPTV subscribers (Figure 1.4) refect this forecast. 14 IPTV in France At industry conferences everywhere, IPTV is a hot topic, and for good reason: service providers are rapidy roing out IPTV services to consumers a over the panet. Not every venture produces a winner, but there have been a number of successfu depoyments, and more are on the way From a presentation entited IPTV Overview and Keys to Success, September 10, 2006, at IBC, Amsterdam, and subsequent interviews. For more information, pease visit Graeme Packman, of Understanding & Soutions, a U.K.-based consuting firm, gave a very interesting presentation on IPTV during IBC and provided additiona data used here.

37 Top Ten Broadband Countries (by Subscriber Lines) 90,000,000 80,000,000 70,000,000 60,000,000 Q Q ,000,000 40,000,000 30,000,000 20,000,000 10,000,000 0 China USA Japan Germany France UK South Korea Figure 1.3 Top 10 broadband countries, by subscribers, Q Q Source: Data provided for the Broadband Forum by Point Topic. Itay Brazi Canada IPTV Subscribers per Region 12,000,000 10,000,000 8,000,000 Q Q ,000,000 4,000,000 2,000,000 0 Western Europe North America South & East Asia Asia- Pacific Eastern Europe Figure 1.4 IPTV Subscribers, Q Q Source: Data provided for the Broadband Forum by Point Topic. Latin America Midde East & Africa

38 What Is Internet Protoco, and Why Use It for Video? 13 One country where IPTV took hod eary was France. Between 2004 and 2006, more than 400,000 subscribers signed up for IPTV service from Orange (France Teecom). Aternative ISP Free provided an IPTV service with more than 80 channes in a package that incuded Internet access and teephony. About two-thirds of Free s 1.9 miion broadband subscribers were eigibe for this package. Other IPTV providers in France incuded aternative operator Neuf Cegete, which had recenty acquired AOL France, Teecom Itaia subsidiary Aice, and T-Onine (Deutsche Teekom) subsidiary Cub Internet. The success of IPTV in France occurred for a number of reasons, some of which were specific to the French market and some that may aso have been true for other ocations. Pricing. Due to a competitive market, the prices for IPTV services were very ow. Orange/France Teecom s basic IPTV service with more than 40 channes cost 16 Euros per month. Free s basic tripe-pay package, which incuded high-speed ADSL2þ Internet access and free voice cas to fixed ines in more than 20 countries and IPTV, cost 30 Euros per month. At this ow price, many Free customers were happy purchasing the package just to get Internet and teephone service and didn t utiize the teevision services. Incumbent Orange started to bunde its basic IPTV service, which incudes more than 30 channes, free of charge with some of its broadband access offerings. Weak competition. As mentioned earier, the main aternatives to IPTV were cabe TV and sateite, both of which achieved penetration far beow eves in other countries. In the case of cabe TV, up unti 2005 there were severa cabe operators who had not converted the anaog base to digita as rapidy as in the United Kingdom, and most of these systems were without VOD capabiity. In the case of sateite TV, penetration was hurt by strict oca panning rues that make it impossibe for many potentia subscribers to mount antennas on their homes. As a resut, for many potentia viewers, IPTV was possiby the ony way to get digita TV services. Wide range of content. The channe offerings of the two argest IPTV suppiers were quite extensive. In addition to channes from a over France, both services offered basic-tier internationa programming from a number of other countries in Europe and the Midde East. In addition, Orange/France Teecom offered more than 200 premium channes. Both operators aso partnered with media group Canaþ to offer premium content. New services (HD and VOD). Whie not as important as the reasons mentioned previousy, both HD content and VOD services may have acted to drive subscribers to IPTV. The HD broadcast market in France was much ess deveoped than the U.S. market at the time. IPTV service providers were positioning themseves to capture HD business by depoying HD-capabe set, top boxes (STBs) eary on. In France, VOD services were aso not common, and IPTV providers were, in practicaity, the first providers to offer VOD. Other countries in Europe presented a different picture for IPTV. For exampe, the United Kingdom, a country with roughy the same number of teevision househods as France, had twice as many digita sateite subscribers (more than 7 miion). NTL/ Teewest operated digita cabe TV systems that passed haf the homes in the United Kingdom and had 3.3 miion subscribers. Overa, the penetration of digita TV

39 14 IPTV and Internet Video services in the United Kingdom was amost 70% of viewers, a much higher ratio than in France or many other countries in Europe. As a resut of these and other factors, the penetration of IPTV in the United Kingdom has been ower. However, recent services, such as BT Vision s IPTV service, which had 376,000 subscribers by the end of 2008, have somewhat atered this trend. 16 Summary IPTV remains a force to be reckoned with today and for the foreseeabe future, as powerfu market drivers push companies and consumers to adopt this technoogy. Even though a number of issues must be addressed before IPTV can reach its fu potentia, these issues are surmountabe and are not very different in scope or magnitude from the difficuties that face any new technoogy. This chapter covered the basic motivations for using IP networks to deiver video services, incuding the fexibiity, ubiquity, and cost advantages that have persuaded many carriers to begin offering these services. It took a ook at the market trends that are driving the rapid growth in this market. It then examined severa factors pushing the spread of this technoogy. The chapter concuded with a ook at some issues that work against IPTV athough none of these appears to be anything more than the teething pains of a new technoogy. 16 TeecomView, February 12, 2009.

40 2 Types of IP Video This is definitey the Wid West in some ways; it s in the very eary stages, and peope are sti earning. Adam Berrey, vice-president of marketing and strategy, Brightcove There are many different ways that IP networks are currenty being used to deiver video programming, ranging from professiona contribution networks connected between sports stadiums and broadcasters a the way to Web cameras that enabe peope to have face-to-face video chats across continents. This chapter focuses on four of the major types of networks being used to deiver video content to (home) viewers. When someone uses the term IPTV it can be very difficut to understand the intended meaning. Did the speaker mean to indicate the highy structured teevision deivery systems being buit by teephone companies around the word, or was the discussion about the wid and wooy word of user-generated video content portas on the Internet? With the present terminoogy, it s hard to te. In any rapidy changing technoogy, the terms used to define the fied wi tend to change over time. Witness the rapid evoution of persona computing and communication devices aptops used to be quite distinct from mobie phones, but these categories are starting to bur with the introduction of smart phones and netbooks. This transformation is aso happening in the word of IP video, where the boundaries between IPTV and Internet video are starting to break down. Originay, two categories appeared to be enough, when there seemed to be a cear difference between the terms IPTV and Internet video. This difference sti exists, but there have been a arge number of new services introduced since 2006 that don t reay fit into either category. For exampe, how do you cassify a service that is deivered as a continuous stream over the Internet, is funded by advertising, and pays on a computer screen or a mobie device? How about a subscription-based service that enabes viewers to watch movies and network programs on a teevision connected to a set-top box that pays content ondemand from the Internet? Neither of these exampes can easiy be paced into either of the two origina categories.

41 16 IPTV and Internet Video The Corner Office View Let s start with what IPTV is not. Specificay, it is not TV that is broadcast over the Internet. Whie the IP in its name stands for Internet Protoco, that doesn t mean peope wi og onto their favorite Web page to access teevision programming. The IP refers to a method of sending information over a secure, tighty managed network that resuts in a superior entertainment experience. In particuar, IPTV aows the service provider to deiver ony those channes that the consumer wants at any given time unike traditiona teevision broadcasting, where every channe is deivered to every home on the network. For the first time, it wi be economica to deiver a coege basketba game to everyone who wants to see it, for exampe, rather than just a particuar oca community. Mike Quigey, president and chief operating officer of Acate 1 Two New Categories To hep cear up some of this confusion, it makes sense to come up with two new categories that fit in between IPTV and Internet video. The first, Internet TV, is simiar in many respects to Internet video, with a significant difference: viewers watch channes of streamed content rather than seecting from a coection of video fies that can be payed on-demand. A good exampe of this is NASA TV, 2 which provides hours of ive and prerecorded programming each day (incuding ive coverage of a the space shutte aunches and andings); viewers can simpy tune in whenever they want. Simiary, with CNN.com Live ( ive/) and Boomberg Live TV ( when viewers tune in they are simpy connected to the rea-time stream at whatever point it happens to be; perhaps midsong or midsentence. To watch different content than what is currenty paying, viewers need to switch to another channe. The second new category is IPVOD for professionay produced video-ondemand content that can be payed over a PC or an appiance (STB) connected to a teevision and the Internet. Many of these services are branded by a provider and carry advertising or are avaiabe through a subscription program. Some popuar exampes incude Huu.com and the Watch Instanty feature of Netfix.com, which can be viewed onine with a PC/Web browser or on a teevision using a Roku STB. To protect this vauabe content from unauthorized use, it is often transmitted using strong digita rights management (DRM) protection, which is not the case for much of the avaiabe Internet video content. 1 Business Week, May 20,

42 Types of IP Video 17 The buk of this chapter is devoted to comparing these four deivery cassifications using a variety of criteria. For this chapter s Reaity Check, we take a ook at MobiTV, a service that offers programming using severa of these video deivery approaches. Comparing the Networks Each video deivery system can be compared using a variety of characteristics, as shown in Tabe 2.2. Each of these characteristics is expained in the sections that foow. Network Type Networks for IP video transport can be categorized into two types: pubic and private as shown in Tabe 2.1. The most important pubic network is the Internet, where viewers from many different ocations can get access to a range of video sources. These sources may have pubic or private URLs, but they a share the same deivery network. The three deivery mechanisms used over pubic networks (IPVOD, Internet TV, and Internet video) must be capabe of working in a besteffort environment, meaning that video sources and receivers must accommodate packet osses and deays. Private networks exist in many different configurations, ranging from sma pointto-point inks to arge systems covering miions of viewers. Each viewer must be connected directy to the network in order to have visibiity of the sources and to receive services. IPTV is unique in requiring private networks, as that is the ony way to give carriers the abiity to contro the critica network parameters that affect how video is deivered. Aso, from a practica standpoint, a private network is the ony economicay viabe way to deiver the 60 or so hours of teevision consumed by an average U.S. househod each week; most ISPs woud be unwiing or incapabe of deivering that much content to a or most of their subscriber base. Quaity of Service In IP networking, the term quaity of service (QoS) is typicay used to describe a mechanism where different services are assigned different priorities. This can be indicated right inside the standard IP packet header, aowing routers to give priority to specific packets. This mechanism can, for exampe, be used to give video traffic a high priority Tabe 2.1 Network Type Service Attributes IPTV IPVOD Internet TV Internet Video Network Type Private Network Pubic Network Pubic Network Pubic Network

43 Tabe 2.2 Cassifications of IP Video Deivery Systems Service Attributes IPTV IPVOD Internet TV Internet Video Network Type Private Network Pubic Network Pubic Network Pubic Network Quaity of Service Managed QoS Unmanaged QoS Unmanaged QoS Unmanaged QoS Mutipoint Method True Muticasting Unicasting Repicated Unicasting Unicasting Key Protocos True Streaming RTP over UDP Progressive DownoadþPay Viewing Devices STB with Teevision STB with Teevision or PC Program Choices User Experience Channe Change Time Rewind/Fast Forward Production Vaues Hundreds of Channes of Continuous TV Simiar to Broadcast or Cabe TV Thousands of Discrete Video Fies HTTP Streaming; Progressive DþP PC, Mobie or Network Appiance Thousands of Channes of Continuous TV HTTP Streaming; Progressive DþP PC, Mobie or Network Appiance Miions of Discrete Video Fies Simiar to DVR or VoD Simiar to Web Surfing Simiar to Web Surfing Quick: 1-2 seconds Reasonabe: 5-10 seconds Sow: seconds Sow: seconds (incuding search time) No Yes No Yes Professionay Produced Professionay Produced Professionay Produced User Generated Content Types Live or Prerecorded Prerecorded Ony Live or Prerecorded Prerecorded Ony Program Library Waed Content Garden Waed Content Garden Wordwide Reach; Viewer Beware Quaity Varies Ownership Rights Strong, with Digita Rights Management Revenue Modes Paid by Subscription Subscription, Fee per Episode or Ads Exampe Providers Loca Tecos, AT&T U-Verse Strong, Often with DRM Fairy Strong Weak or Nonexistent; Frequent Copyright Vioations Netfix, Huu, CBS.com, ABC.com, Cartoon Network Often Free or with Advertising NASA.tv, Loca TV Broadcasters, Moguus, mobitv Often Free or with Advertising YouTube, FaceBook 18 IPTV and Internet Video

44 Types of IP Video 19 Tabe 2.3 Quaity of Service Service Attributes IPTV IPVOD Internet TV Internet Video Quaity of Service Managed QoS Unmanaged QoS Unmanaged QoS Unmanaged QoS to ensure that packets are not discarded and experience minima deays instead of waiting for ower priority, nonvideo traffic to pass through an overcrowded ink. Quaity of service is reativey easy to impement on a private network, assuming that there are some consistent rues that can be appied to a of the devices, whether or not they are transporting video signas. This function is essentiay useess on the pubic Internet because there is no mechanism to enforce a poicy consistenty across a of the different sources of video and other content. Without suitabe priority enforcement, a users woud be abe to set high priorities for their traffic, rendering the prioritization scheme meaningess. As shown in Tabe 2.3, IPTV services are virtuay aways impemented over QoS-controed networks, whether these are carrier-based networks connected to homes or corporate in-house networks. QoS contro heps ensure that a continuous, good-quaity stream is deivered to each viewer, which is essentia for high-quaity video with rea-time deivery. IPVOD, Internet TV, and Internet video don t require as much of a focus on QoS and can be configured to work on a non- QoS-controed network. Mutipoint Method Internet Protoco video deivery is a about transmitting video content from a source to mutipe destinations. Depending on the type of service being deivered, the methods used for achieving this point-to-mutipoint arrangement can vary consideraby. A simpe definition of unicasting is that each packet is transmitted from a singe source to a singe destination. Muticasting uses specia processing controed by speciaized protocos to make copies of streams in rea time as they fow through the network. As shown in Tabe 2.4, for both IPVOD and Internet video, unicasting is the ony practica approach, as it is the ony way to aow viewers to have random access to Tabe 2.4 Mutipoint Method Service Attributes IPTV IPVOD Internet TV Internet Video Mutipoint Method True Muticasting Unicasting Repicated Unicasting Unicasting

45 20 IPTV and Internet Video content (fast-forward, rewind, etc.) and to aow them to seect whatever content they want and begin immediate payback. For Internet TV, repicated unicasting is used, where each viewer gets a dedicated unicast stream (because muticasting is not supported on the Internet). Because a these streams are roughy synchronized, they can either be repicated at the video source or be repicated by speciaized servers (caed refecting servers) that are provided by a number of service providers at ocations around the Internet. For IPTV, true muticasting can be used, as most modern networking equipment can be configured to support muticasting when instaed on a private network. As expained in Chapter 4, muticasting uses a specia protoco caed an Internet group management protoco (IGMP) to make copies of packet streams when they are cose to their destination, which heps improve bandwidth efficiency throughout the network. Key Protocos Many different protocos can be used for deivering video over IP circuits, as iustrated in Tabe 2.5. The most common ones, such as HTTP, which is used every day in standard Web surfing, can be used, as we as protocos that are designed specificay for deivering rea-time information. The main differences between the protocos reate to the way that contros are appied to the packet streams as they fow across the various networks. Progressive downoad and pay can be used for IPVOD, Internet TV, and Internet video. This protoco divides the video information up into bocks of data that may represent anything from a few seconds to a few minutes of video or audio data (typicay 30 to 60 seconds). The viewer s Web browser downoads each bock of data before it is needed and makes data avaiabe to a media-specific browser pug-in. One advantage of this approach is the abiity to work with a variety of firewa architectures, as each bock of downoaded data has most of the same attributes as a norma Web page that woud be downoaded by any browser. One downside to progressive DþP is that the cient typicay waits for the first bock of data (which may consist of numerous IP packets) to be downoaded before payout begins; this buffering can occur each time the viewer uses fast-forward or rewind or whenever a new video program is seected. HTTP streaming is often used by Internet TV and Internet video distribution and can sometimes be used for IPVOD appications. It uses the standard HyperText Tabe 2.5 Key Protocos Service Attributes IPTV IPVOD Internet TV Internet Video Key Protocos True Streaming RTP over UDP Progressive DownoadþPay HTTP Streaming; Progressive DþP HTTP Streaming; Progressive DþP

46 Types of IP Video 21 Transfer Protoco famiiar to Web surfers everywhere with a sight twist: instead of waiting for the browser to request successive packets of video data, the server continues to push data packets to the browser whether or not a request has been received. This heps improve Web video operation, as it aows video packets to be sent at a rate that is determined by the video and audio content, not by the viewer s browser, aowing for more natura timing. True streaming rea-time protoco (RTP) over user datagram protoco (UDP) is normay used for IPTV and can aso be used for other types of video deivery. It is a one-way protoco, which means that the source contros a of the packet fow, whether or not a specific cient device is receiving it. This means that RTP/UDP can be used over one-way networks such as a sateite or an over-the-air broadcast, and it aso means that the stream can be repicated in the network, making it suitabe for muticasting. The big benefit of RTP/UDP for high-quaity video deivery is timing contro it aows high bandwidth streams to be deivered with very sma receiver buffers, aowing video streams to start payback very quicky after they have been requested. RTP/UDP is not used commony for video signas deivered over the Internet because of the difficuties in maintaining consistent end-to-end timing and because of difficuties that may be encountered in traversing some firewas. Viewing Devices A variety of viewing devices are avaiabe for IP video appications as isted in Tabe 2.6, and the range is constanty increasing. Nevertheess, certain tendencies are apparent. IPTV systems for home viewers are amost aways based on STBs, due to the goa of many IPTV providers to directy repace cabe TV, sateite, and broadcast services that are aso avaiabe to viewers in most markets and so that teevisions can be used for dispay. When IPTV is deivered in a corporate environment, PCs are often used for desktop viewing; however, STBs can aso be used in these networks for nondesktop dispays. IPVOD is often deivered over STBs when these services are offered aongside IPTV services for home viewers. IPVOD can aso be deivered to specia-purpose STBs, such as the Roku payer, which is designed to connect directy to both a home data network and a teevision. Another choice for IPVOD viewing is a standard PC, equipped with a suitabe browser/pug-in software combination. Internet TV and Internet video are designed primariy for PC-based viewing, athough some providers aso make aowances for viewing video on mobie Tabe 2.6 Viewing Devices Service Attributes IPTV IPVOD Internet TV Internet Video Viewing Devices STB with Teevision STB with Teevision or PC PC, Mobie or Network Appiance PC, Mobie or Network Appiance

47 22 IPTV and Internet Video devices. Increasingy, speciaized network appiances are aso being deveoped; these units can take video streams that have been received by PCs and pay them on a teevision or, in some cases, connect directy to the Internet (see, for exampe, the Appe TV product at Program Choices Across the board, content providers are increasing the range of program choices avaiabe to viewers. However, certain common trends are apparent, as shown in Tabe 2.7. IPTV systems typicay offer hundreds of channes to subscribers, many of which are supported by the subscription fees that viewers pay. As a practica matter, adding too many channes is not expedient, as viewership for some of the obscure channes is very ow, provider costs per channe are not insignificant, and program guide tabes can become unwiedy for providers and viewers aike when too many channes are provided. The number of Internet TV channes avaiabe at any time is a moving target, as these channes can come and go with itte fanfare. As of this writing, there appear to be a few thousand channes avaiabe on the Internet, many of them copies of broadcasts provided through other mediums. Because of the costs associated with acquiring, producing, and distributing the content required for a 24/7 operation, there is a imit to the number of companies wiing to make the investment to produce a channe. In some cases, Internet TV channes are being repaced with Internet video downoad sites as a way to give viewers fexibiity. IPVOD content choices depend on the amount of content that can be obtained from content owners; this varies widey by company and by the type of content. Sites that se or rent video content, either for downoading or for VoD typicay have thousands of choices avaiabe. There simpy isn t enough professiona content produced to fi a ibrary with a miion choices. With user-produced Internet video, there are iteray hundreds of miions of videos avaiabe onine, with new seections being upoaded constanty (and other ones removed). In fact, every minute, twenty hours of new video content is upoaded to YouTube according to the site s bog. That s enough to equa 60,000 feature fims a week. The difficuty with this quantity, of course, is finding something worth watching. Tabe 2.7 Program Choices Service Attributes IPTV IPVOD Internet TV Internet Video Program Choices Hundreds of Channes of Continuous TV Thousands of Discrete Video Fies Thousands of Channes of Continuous TV Miions of Discrete Video Fies

48 Types of IP Video 23 User Experience The best way to describe the user experience of these four categories isted in Tabe 2.8 is by anaogy to existing services. IPTV is designed to be a direct repacement for cabe TV and sateite TV and offers an identica user experience when used with an STB, incuding an interactive program guide used to seect channes. IPVOD offers a simiar experience that viewers woud have when viewing an ondemand movie ordered from cabe TV or when paying back an item recorded on their persona digita video recorder (DVR). Both Internet TV and Internet video offer a simiar experience to Web surfing, due both to the viewing device (typicay a PC) and to the method used to seect content (Web searching and cicking on hot inks and preview graphics). Channe Change Time Channe change time is the amount of time required for an IP video system to begin payback of a new channe or fie of content after the user has made a request (by pressing a button on a remote contro or by cicking on a Web page). The amount of time required is a major difference between the various IP video deivery technoogies, as shown in Tabe 2.9. Because a of the major IP video deivery methods are oriented around sending a singe stream to each viewer, when the viewer changes channes, the deivery network must react by sending new data to that viewer. This is different from the methods used for channe changing in mutichanne deivery systems such as sateite, cabe TV, and over-the-air broadcasts, where the viewer s device is constanty receiving mutipe streams and simpy needs to tune from one stream to another. Tabe 2.8 User Experience Service Attributes IPTV IPVOD Internet TV Internet Video User Experience Simiar to Broadcast or Cabe TV Simiar to DVR or VoD Simiar to Web Surfing Simiar to Web Surfing Tabe 2.9 Channe Change Time Service Attributes IPTV IPVOD Internet TV Internet Video Channe Change Time Quick: 1 2 seconds Reasonabe: 5 10 seconds Sow: seconds Sow: seconds (incuding search time)

49 24 IPTV and Internet Video IPTV systems are designed specificay to mimic the behavior of mutichanne systems by keeping the channe change time very ow, on the order of 1 to 2 seconds. This takes carefu system design and requires technoogies such as RTP/UDP to impement. IPTV deivery patforms are speciay adapted to achieve this by, for exampe, transmitting extra frames of video to a viewer immediatey after a channe change request has been made. IPVOD systems have a sower channe change time, due in part to the greater number of content choices provided to viewers. Aso, because many of these systems use progressive downoad and pay, the channe change time is increased by the amount of time required for the first bock of data to be downoaded. The use of STBs and remote contros in many IPVOD systems heps speed up channe change time, as viewer actions are easy to process. Internet TV and Internet video systems can require even onger channe change times, due in part to the reaction time of the browser-based user interface and aso in part to the arger buffers used in many appications. These buffers need to be emptied and then reoaded with new data each time the viewer changes from one content seection to another. Rewind/Fast-Forward Neither of the inear programming options (IPTV and Internet TV) described in Tabe 2.10 offers viewer contro over payback users simpy joins whatever program is paying at the time that they join. (Some viewing devices offer the abiity to record the video as it is being payed so that viewers can rewind to something that has aready been deivered, but this functionaity has imitations and wi not work after a channe change.) Because the content is prerecorded and deivered individuay to each viewer, both IPVOD and Internet video are abe to offer rewind and fast-forward. Production Vaues Production vaues are cosey reated to the costs of preparing video content higher costs are typicay correated with higher production vaues. As a resut, paid services offer more professionay produced content than free services. In genera, Tabe 2.10 Rewind/Fast-Forward Service Attributes IPTV IPVOD Internet TV Internet Video Rewind/Fast-Forward No Yes No Yes

50 Types of IP Video 25 Tabe 2.11 Production Vaues Service Attributes IPTV IPVOD Internet TV Internet Video Production Vaues Professionay Produced Professionay Produced Professionay Produced User Generated some trends are apparent in Tabe IPTV and IPVOD amost excusivey provide professionay produced content; viewers wi not be happy if they end up paying for poor-quaity video. Internet TV production vaues tend to be more variabe the meaning of professionay produced is different in the United States than in other countries around the word. In genera, providers of Internet TV channes suppy a reasonaby high grade of production; athough the content may not aways be compeing, at east the video is in focus and the sound is reasonaby we-recorded. For Internet video, production vaues are up to the individua user who upoads their video as a resut, the variation in quaity is enormous. Content Types Prerecorded content is avaiabe from a forms of IP video deivery systems it is by far the dominant type of video avaiabe, as shown in Tabe Even though many of the streams deivered by IPTV and Internet TV are streamed in rea time, the vast majority of this programming is made up of prerecorded content. Ony IPTV and Internet TV are capabe of deivering actua ive coverage, such as a sporting event or a ive news program. Of course, the term ive is reated to the tota amount of deay across the deivery system deays of up to 30 seconds are common in many Internet TV appications and in some IPTV systems; deays of a few minutes are not unheard of. Program Library The term waed garden refers to a coection of content that has been preseected by a service provider and indicates that choices outside of this coection are not avaiabe to viewers. This is virtuay aways the case for IPTV providers, as shown in Tabe 2.13, because each channe made avaiabe to viewers needs to be under the Tabe 2.12 Content Types Service Attributes IPTV IPVOD Internet TV Internet Video Content Types Live or Prerecorded Prerecorded Ony Live or Prerecorded Prerecorded Ony

51 26 IPTV and Internet Video Tabe 2.13 Program Library Service Attributes IPTV IPVOD Internet TV Internet Video Program Library Waed Content Garden Waed Content Garden Wordwide Reach; Quaity Varies Viewer Beware contro of the service provider, for both functiona and financia reasons. Simiary, IPVOD services tend to be imited to the content seections that the service provider has been abe to obtain from owners. For both Internet TV and Internet video, content can be obtained from anywhere in the word, with wide variations in quaity. In particuar, Internet video sites that offer user-contributed content have every type of video conceivabe, from the subime to the ridicuous... (Let the viewer beware). Ownership Rights Ownership rights need to be enforced as a prerequisite for obtaining content from many suppiers. Enforcement often takes two forms: scrambing or encryption of content before it is deivered to viewers and DRM technoogies that hep contro what viewers are aowed to do with the content once they have received it as isted in Tabe Both IPTV and IPVOD tend to have strong ownership rights both systems wi normay use encryption (at east for certain types of content) and both wi frequenty use DRM. Internet TV varies widey in the amount of encryption and DRM that is used; for exampe, viewer-paid channes tend to use both technoogies, whereas free channes may use neither. Internet video is even ess controed, with reativey itte encryption or DRM empoyed on most sites, especiay on sites that primariy offer viewer-generated content. Revenue Modes Of course, because any revenue mode can appy to any type of network, any genera cassification ike this one is subject to exceptions and revisions. Nevertheess, it is iustrative to ook at the predominant revenue modes used by each of the network types, as isted in Tabe Tabe 2.14 Ownership Rights Service Attributes IPTV IPVOD Internet TV Internet Video Ownership Rights Strong, with Digita Rights Management Strong, Often with DRM Fairy Strong Weak or Nonexistent; Frequent Copyright Vioations

52 Types of IP Video 27 Tabe 2.15 Revenue Modes Service Attributes IPTV IPVOD Internet TV Internet Video Revenue Modes Paid by Subscription Subscription, Fee per Episode or Ads Often Free or with Advertising Often Free or with Advertising For IPTV, subscription modes are the rue, both for the private network used to deiver the video and for the content fowing over that network. Many IPTV providers offer a ow-cost (but not competey free) subscription option for free over-the-air channes in part to cover the costs of buiding and operating the network. In corporate appications, the costs are borne by the company rather than by each individua viewer. For IPVOD, severa different revenue modes are used. Subscription is one popuar choice, particuary when these services accompany IPTV services or when they are offered as a-you-can-eat renta options. Per-episode fees, either for renta or for purchase, are often used for recent Hoywood reeases. Advertising support is aso commony used for teevision episodes, particuary for catch-up TV. Many Internet TV channes are offered for free, particuary ones that are simpe repeats of teevision broadcasts or are sponsored through government funding. Others are subscription based, mainy those intended for mobie teevision viewers. A few Internet TV channes are sponsored with advertising, but with reativey few advertisements. The argest sources of Internet video offer free viewing, particuary for viewercreated content. Advertising is often used for revenue generation, athough this tends to gravitate toward content that is produced professionay. Many different forms of advertising are possibe, incuding pre-ro (fu-screen ads that pay before the content pays) mid-ro (during the content), graphics that overie the bottom of the portion of the video that appear and then disappear part way through payout, and banner or other advertising on the Web site that contains the video. Exampe Providers For each of the four isted deivery methods, some exampe providers are isted in Tabe 2.2. This is certainy not by any means an exhaustive ist; it is merey an attempt to further iustrate the different categories by providing some tangibe exampes. More information about each of these can be found easiy through a simpe Web search. Reaity Check For this chapter s Reaity Check, we discuss a service that combines aspects of a the categories defined earier.

53 28 IPTV and Internet Video MobiTV Burring the Lines Since its formation in 1999, MobiTV has aunched a variety of rea-time and ondemand programming to viewers via severa different user devices, incuding both PCs and mobie phones. The service is named MobiTV because of the substantia depoyment for mobie teephone users, with more than 6 miion reported users in February It is impossibe to cassify MobiTV into any singe category isted previousy. Here are some of the services currenty being offered. Continuous, ive broadcast channes deivered to mobie subscribers using a variety of smart phones, with downoaded appications. Avaiabe content incudes a number of news channes, sports channes, entertainment, and speciaty programming such as music videos. A version of MobiTV is aso avaiabe to PC users and is marketed in conjunction with AT&T Broadband. On-demand programming, deivered over carrier s data networks. As of this writing, the content ibrary incudes a variety of teevision series episodes, which are typicay made avaiabe the day after they are broadcast by major networks. For a demonstration at the NAB 2009 show, MobiTV featured mobie DTV service from PBS (KLVX) and the CW (KVCW), which is free, over-the-air teevision deivered using IP technoogy from a portion of each teevision station s DTV channe bandwidth. 4 In addition, the demonstration incuded a service caed MixTV that offers a seven-day ibrary of a previousy broadcast content avaiabe on-demand over Mobie WiMAX. Interestingy, the PBS DTV broadcasts wi be free to any viewer with a propery equipped mobie phone and suitabe software (which may or may not be free), whereas the video-on-demand component wi require a subscription. The mobie/smart teephone versions require a monthy subscription fee for the programming on the order of $10 per month as of this writing in addition to a wireess data pan. The PC version has a fee on the order of $20 per month; PC users must suppy their own broadband network connections to the Internet. As this exampe shows, there is no singe, universa definition for IPTV. What s important is to remember that whenever IPTV comes up in a conversation, one shoud be carefu to quaify what the speaker is taking about before making any concusions. Summary This chapter focused on the differences among four different systems used for deivering video over IP networks. These terms are often used in very simiar contexts by experts, and care shoud be taken to carify which version is being discussed. In the baance of this book, we wi tak about IPTV as a video service that offers mutipe channes of programming distributed on a rea-time basis over a 3 MobiTV press reease, February 17,

54 Types of IP Video 29 private network to viewers who typicay use an STB to watch the content on a teevision or other dispay device. We tak about Internet video, which consists of thousands or miions of discrete content eements (fies) viewed over a pubic networkonamonitorforapc. These differences are important because they affect the viewer s abiity to contro when and where specific content is viewed. Aso, as we sha soon see, the business modes and the technoogies for these services can vary as we. As innovation continues, we are sure to see a variety of new and interesting IP video deivery technoogies.

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56 3 Business Modes Information technoogy and business are becoming inextricaby interwoven. I don t think anybody can tak meaningfuy about one without taking about the other. Bi Gates Regardess of the technoogy, the key to success in deivering video services to consumers is a profitabe business mode. A wide variety of modes are being used in the market today for deivering video content over IP networks. Many different pans for user fees are being tried, ranging from competey free service to services that charge for each viewing of each piece of content. Whether revenues come from subscriptions, pay as you go, or pre-ro and interactive overay ads, expect to see new monetization forms that go for the new [onine video] entertainment form, according to Googe CEO Eric Schmidt. 1 That s what we re seeking, says Schmidt. That is the Hoy Grai. With the advances of behaviora anaytics and direct consumer reationships, it is forecast that ad-supported onine video streaming wi increase from $1.4 biion in 2007 to neary $6.4 biion in In the ong run, it is ikey that a few seected approaches wi dominate, but for now, it is smart to get an understanding of the many different modes being used. This chapter is divided into two main sections. The first section ooks at business modes that are being used primariy for IPTV networks. The second section ooks at modes that are often used for Internet video businesses. The ines can be burry between these two groups, but here is the key point to remember: IPTV providers generay need to pay for instaing and operating the network that deivers the services in addition to any costs for content, whereas most of the provider costs of Internet video services reate to content acquisition and preparation. Of course, there are a number of other costs that we wi discuss, but network instaation and operation expenses can be major portions of the overa system price tag. 1 Juy 16, 2008, Googe quartery financia briefing. 2 New Advertising Technoogies and Patforms, Parks Associates, 11/08.

57 32 IPTV and Internet Video Corner Office View 1: A Successfu IPTV Mode in Hong Kong When it comes to IPTV, for one of the utimate exampes of an incumbent teecom firm moving into TV, you have to visit Hong Kong. When PCCW, the oca phone company, aunched a TV-over-broadband service in September 2003, everyone aughed; it had tried simiar ventures twice before, in 1996 and 2000, and had faied on both occasions. But at the time, 85% of PCCW phone subscribers had access to broadband fast enough for video, and its new service, Now TV, proved a success, serving neary 40% of a homes. Hong Kong s popuation of neary seven miion peope gives it the word s highest popuation density, making it easier to impement Internet and teephone services. 3 Severa years ago, due to some of these factors, PCCW became one of the first incumbent operators anywhere in the word to stop the decine in fixed-ine subscribers. This is the kind of success that other teecom firms dream of: a new service that not ony stops ine oss, but beats the cabe companies at their own game and brings in new revenue... No wonder that just about every phone company in the word has come to visit PCCW, says Aexander Arena, the firm s finance chief. PCCW is now advising teecoms firms in severa countries about how to emuate its successfu ro-out of IPTV. 4 From Tuning into the Future?, The Economist Corner Office View 2: A Googe Internet Video Business Mode When it comes to Internet video, broadcast and Internet executives are seeking an efficient, scaabe revenue mode. Part of that quest is to introduce new ad innovations so ad agencies reay vaue what we re doing, says Disney- ABC EVP Digita Media, Abert Cheng. But wide commerciaization has remained eusive. Here s one corner office point of view on monetizing Internet video from Keva Desai, GoogeTV s Director of Product Management. 5 3 Asia s Media Innovators, Stephen Quinn, PCCW and the Now Business Channe in Hong Kong. 4 Tuning into the Future?, The Economist, October 12, Interview with Howard Greenfied, 3/30/09.

58 Business Modes 33 What s true for Internet video monetization (and video monetization in genera) is that if there s not a ot of user interactivity associated with something, you can t monetize it. For short cips, advertising modes such as overay, interactive ads, text ads, or banners around the video are a fine. But I don t think that is where the majority of the doars are going to come in. I think an interesting trend to ook at is what users are doing with video on the Internet. Most significant in my opinion is that they are ooking at the same TV content they ve been ooking at for the ast 20 years. Premium ong-form content is going to migrate, or co-exist on your TV. Web monetization wi come from instream video advertising of ong-form content (which is basicay the same mode as we have on teevision). When users start paying with their video, interacting with it, then you see interactive ads. If users are passivey watching inear video, you see passive instream ads. A great exampe is the UK where peope interact with their TV (there s a buy button on the Sky remote). So, user behavior is aready estabished and interactive ads, teescoping, or video-on-demand make a ot of sense. As an advertising strategy, a we re trying to do is foow the user. Foow the user and the rest wi come. Trying to predict ad formats ahead of user behavior is the peri that most other video advertising efforts have faen into. I think monetization is a agging activity and user behavior is a eading activity. So, when you re ooking to monetize it, now or 6 24 months from now, you need to ook at what are users doing? because if there s not a ot of activity, or traffic associated with the something, you can t monetize it. Our AdSense for media onine can be used by any pubisher to monetize their ongform video. So, for exampe, we are monetizing a ot of od Bonanza shows on YouTube (who have the rights from the pubisher to monetize that inventory). IPTV As discussed in Chapter 2, IPTV networks primariy deiver mutipe streams of continuous content over private networks to viewers who watch the content on norma teevision sets. Whie this sounds simpe, a significant amount of technoogy needs to be instaed and managed to provide these services. Tabe 3.1 summarizes the key cost eements of an IPTV system. Tabe 3.2 gives monthy programming costs for severa popuar teevision networks in the United States. Note that these costs are paid by the IPTV system provider to the content owners; part of the business pan for the IPTV network is devising a way to recoup these costs from viewers. In addition to the costs given in Tabes 3.1 and 3.2, other recurring costs must be covered. These incude marketing, customer support, and network maintenance.

59 34 IPTV and Internet Video Tabe 3.1 IPTV System Cost Eements Cost Eement Cost Basis Description Video Content Recurring fee per month per viewer Paid to content suppiers, such as broadcast networks Deivery Network Fixed, up front Cost of IP network, part common equipment, part per-subscriber STB Fixed per subscriber Often rented, sometimes purchased by consumers Digita Head End Fixed, up front Receives video signas, converts into proper IP format Content Servers Fixed, scae with capacity Used for on-demand and advertising EPG Recurring, scaes with number of channes and subscribers May be produced ocay by IPTV provider or acquired from service bureau Tabe 3.2 Programming Cost Exampes Network Fee per Subscriber per Month (2008) ESPN $3.66 Fox Sports Net $2.15 TNT $0.93 Disney Channe $0.86 NFL Network $0.85 ESPN HD $0.70 HD Net $0.68 NHL Network $0.53 USA $0.52 MGM HD $0.52 Source: SNL Kagan # 2009 with portions based on The Niesen Company data # 2009, a division of SNL Financia LLC. A rights reserved; used with permission. These costs can be hard to quantify before an IPTV system is depoyed, but can have a significant impact on the overa profitabiity of a system. The foowing sections describe some of the business modes that can be used for IPTV systems. Subscription Subscription services are probaby the most common methods used for funding IPTV systems. In this system, viewers sign up for a package of video services (channes) and pay a fat monthy fee. Subscribers are then aowed to watch as much or as itte as they desire of any of the channes incuded in their subscription package.

60 Business Modes 35 Often, these services come in different tiers, with basic services (such as signas obtained from oca over-the-air [OTA] providers) being the east expensive and premium sports or movie channes being the most expensive. Service providers try to group the channes into these tiers to maximize the number of subscribers at each eve whie minimizing the costs of the programming. This arrangement is simiar to the pricing schemes used by many cabe TV and sateite providers; hence it is normay we accepted in the marketpace. For exampe, a basic tier of services may have severa oca OTA network feeds (which may have itte or no programming costs to the IPTV provider), some news and weather channes, shopping channes, and other oca content. A more expensive tier of services may incude a variety of nationa entertainment, sports, and music channes, incuding channes such as those isted in Tabe 3.2. This tier coud easiy be priced at 100 to 200% premium over the basic tier. Even more expensive tiers coud be provided, which incude more variety, such as advertising-free channes or speciaized sports channes. À a Carte Channes À a carte channe seection is simiar in concept to subscription, except that each viewer is aowed to seect exacty the channes they want to view so he or she does not pay for the undesired channes. As described earier, the subscriber receives a monthy bi from the service provider, but ony for the specific channes that have been chosen. The service provider in turn uses the revenue to pay content providers. Within traditiona cabe TV and sateite providers, à a carte channes have not seen widespread depoyment. For IPTV providers, there are two advantages to this approach. First, because each channe that a subscriber is viewing must be sent individuay from the IPTV network to the viewer s STB, it is technicay ess difficut to deiver ony a specific group of channes to each subscriber. Second, IPTV providers may capitaize on subscribers desires to pay ony for those channes they wish to view; an à a carte channe seection option coud be used as a service differentiator and market entry strategy. Loca Advertising Loca advertising invoves inserting advertisements from merchants that are targeted to oca residents into network feeds before they are distributed to oca viewers. The technoogy for doing this is we estabished many nationa content providers incude specia indicators in their programming feeds that te the oca providers when to insert their oca ads. These indications, caed avais, are provided by the content owners under the terms of contracts with the oca service providers. In some cases, a oca service provider may earn enough revenue from the oca ads to partiay or competey pay for the cost of the programming. Many cabe TV providers have aready designed their networks to take advantage of this important source of revenue. For IPTV providers, much of the technoogy is readiy avaiabe. Speciaized servers coect advertisements from a number of

61 36 IPTV and Internet Video sources, and these servers can monitor mutipe video channes simutaneousy to ocate avais. When one appears, the content from the server simpy repaces the content of the programming feed. The appea of oca advertisements is not imited to oca businesses. Companies with goba brands may wish to tie their advertisements to items of oca interest, such as soft drink companies targeting fans of oca sports teams. The chaenge for a oca service provider is to effectivey market their seection of avais to the advertisers that wi vaue them the highest. Video on Demand The idea of aowing viewers to watch any programming they desire whenever they want to watch it is not new. However, as technoogy advances and costs come down, video on demand (VOD) has become more and more attractive to service providers. The basic concept of VOD is based on video programming that is stored and then deivered to a viewer when it is requested. This storage can either take the form of a centraized server equipped to send programming simutaneousy to hundreds of viewers or take the form of more distributed storage throughout the network. At the imit, individua storage devices for each viewer can be ocated inside STBs. Various forms of VOD have been tried over the years, and most of them sti exist in one form or another. Tabe 3.3 ists the most popuar types of VOD services. One of the big controversies surrounding DVR service (described in Tabe 3.3) is the roe of advertising in recorded content. Advertisers have two main concerns. Ad skipping, where viewers fast-forward through ads. This capabiity is often isted as the motivation for many consumer DVR purchases. Ad timeiness, where viewers watch programs at times far removed from their origina broadcast date. This is a big concern for some advertisers who have their ad campaigns targeted for specific time windows, such as promotiona ads for a movie that is being reeased to theaters the foowing day. Service providers have a imited amount of contro over content that has been recorded by a viewer on their own device for ater payback. They have ony sighty more contro over DVRs that are embedded in a STB suppied by the service provider at east they can ensure that the DRM function is working to protect any copyrighted content whie it is on disk. Providers actuay have the potentia to infuence viewers who use a networked DVR, where the video recordings are actuay stored on the service providers own video servers. Network DVRs have exciting potentia to make advertisers much happier than with other DVR technoogies. Why? We, consider what happens in a norma DVR scenario with an advertisement. The machine faithfuy records the commercias aong with the program content and gives the user the abiity to fast-forward through any parts of the program or advertisements at their whim. For exampe, say the viewer recorded a program on December 20 and decides to watch the

62 Business Modes 37 Tabe 3.3 Types of Video-on-Demand Service Type True Video on Demand Digita Video Recorders (DVRs) Subscription Video on Demand (SVOD) Free Video on Demand (FVOD) Everything on Demand (EOD) Near Video on Demand (NVOD) Networked Digita Video Recorders (NDVRs) Pay-per-View (PPV) Description This is the purest form of VOD, where each viewer receives an individua video stream that they have compete contro over. Viewers are abe to start, stop, pause, rewind, and fast-forward the content. Viewers typicay pay a fee for each tite viewed; the charges are either debited from a prepaid account or incuded on a monthy bi. These devices take incoming video programming, compress it, and record it to a hard disk that is typicay ocated either in an STB or a standaone device. Viewers then contro the DVR to pay back content, incuding pause, fast-forward, and rewind capabiities. Aso caed timeshifting, viewers normay program their DVRs to record specific programs at specific times. TiVo is one of the pioneers of this technoogy, but most sateite companies now buid DVR functions into their STBs. Same deivery technoogy and viewer contro as VOD with a different payment system. In SVOD, subscribers pay a fixed monthy fee for unimited access to a ibrary of tites. In many systems, the ibrary is updated monthy. A variation on VOD where payment is eiminated. In most systems, this content is restricted to ong-form advertisements, how-to guides, and other ow-cost content. For some technoogy visionaries, this is the utimate form of video deivery system, where a programming is avaiabe to a viewers at a times. Simiar to true VOD without the individua video stream contro capabiities. One common form of NVOD is sometimes caed staggercasting, in which mutipe copies of a program are payed starting at five-minute intervas, thereby imiting any individua viewer to no more than a five-minute wait before his or her program begins to pay. Offers simiar functionaity to DVRs, but recording is performed inside the service provider s network rather than in the viewer s ocation. Some content owners contend that this technoogy is so simiar in capabiity to true VOD that it needs to be icensed as such. This precursor technoogy to VOD is used primariy to deiver ive paid programming, such as concerts or sporting events. It is technicay not VOD since the viewer has no contro over the payback.

63 38 IPTV and Internet Video program on December 29. As you coud imagine, the program contained a number of ads that pertained to specia ast-minute shopping opportunities for Christmas. Unfortunatey, when the viewer watches the program, the saes are over and the ads are competey worthess to both the viewer and the advertiser. Now, consider the same scenario with a networked DVR and some advanced technoogy in the server. With this technoogy, the service provider is abe to repace the commercias that were in the origina program with ones that are timey and reevant whenever the viewer watches the content. In this exampe, the ads seen on December 29 might be for something great to do on New Year s Eve, which the viewer might actuay be wiing to watch, and an advertiser might be wiing to pay for. A that s needed to make this a reaity is some pretty serious software inside the VOD server and some kind of ega framework to govern the bumping of one commercia by another. The industry may not quite be there yet, but the technoogy is certain to be avaiabe in the not too distant future. Interactive TV When viewers are given the opportunity to interact with broadcast content, the resut is caed interactive TV (itv). This can take many forms, ranging from the simpe press of a button to more eaborate menu schemes. Here are a few common appications for itv. Ad response, where viewers can request more information about a product or service being advertised Camera ange seection, where the viewer can chose one or more different camera anges of ive sporting events Voting/opinion poing, where the outcome of a teevision event is determined by a vote of the audience The key requirement for itv is a return path, where user actions are sent to the service provider. Particuary in sateite appications, this can be difficut to construct, requiring an Internet connection or, in oder-generation technoogy, from the interna modem to an STB to the subscriber s teephone ine. In contrast, in IPTV networks, the return path is aready present, aowing for simpe integration of itv. Tripe/Quadrupe Pay Tripe pay refers to mutipe services being deivered by a singe service provider, typicay voice (teephony), data (Internet access), and teevision services. Quadrupe pay adds mobie teephony to the mix. Service providers normay offer discounts to customers who buy more than one service, which has proven to be a successfu marketing poy. The vaue proposition is that consumers benefit not ony from ower prices but aso the convenience of a singe bi to pay (athough the vaue of the atter is debatabe). From a service provider perspective, tripe pay services offer the combined cash fow from three separate services that can be used to pay for a common network that

64 Business Modes 39 is capabe of deivering a of them (such as networks based on IP technoogy). Of course, there are costs associated with instaing the extra equipment and software needed to provide a three services, but these items can be paid for with moderate market penetration. Certainy, tripe pay has been the beautifu face that aunched a thousand networking ventures. Carriers that traditionay had separate spheres of infuence (for exampe, video versus teephony) are now rushing to depoy networks that can support a three aspects of the tripe pay. And these forays have been met with some success a number of teephone companies have acknowedged for many years that pricing and revenue for basic subscriber teephony services are decining, partiay due to the combined effects of VoIP technoogy and mobie teephones. We have a tripe-pay offering that incudes broadband access, voice-over-ip (VoIP), and IPTV, says Paua Sououmiac, director of France Teecom s Internationa TV Content Division. Our customer is getting IPTV, access to our VOD cataog, subscription offers, and a wide bouquet of channes and a this coming from his broadband suppier. As you can imagine, the fixed-ine business has been decining and the broadband business has been increasing, says Sououmiac. So, we need to have a very strong position in the broadband market. And, in fact, by having a tripe-pay offer we ve been abe to attract customers. We aso fee that having a TV proposition in the tripe-pay bunde makes it much stronger and our customers are being quite oya. Today, for access providers, the TV eement is becoming a must have. 6 Internet Video via IPTV The Waed Garden IPTV providers have a diemma. On the one hand, they want to be the soe (or at east very dominant) suppier of video content to their subscribers, which is one of the best ways of securing continuous subscription revenue fows. On the other hand, there is a huge amount of content avaiabe on the Internet, and there wi certainy be pressure from subscribers to have easy access to this content. To resove this diemma, some IPTV providers have resorted to a concept caed a waed garden. A waed garden can amost be thought of as a protected copy of some portions of the Internet or possiby as a set of content offerings that have nothing to do with the Internet. It can aso be thought of as a heaviy censored and fitered view of the Internet. Either way, ony a sma fraction of a the content avaiabe on the Web is incuded in the garden. Service providers see severa advantages for using waed gardens. First of a, the wa can prevent viewers from accessing content that may not be technicay compatibe with the network equipment or content that possiby contains harmfu viruses, worms, or Trojan horses. Second, the wa can hep increase the amount of revenue that service providers derive from their content in the form of advertising revenue or payments for on-demand content. Third, the wa prevents viewer access 6 video interview, home page, Apri 27, 2009.

65 40 IPTV and Internet Video to content that may compete with what the service provider offers or content that may not be suitabe for some groups of viewers, such as chidren. The concept of a waed garden is not new. AOL tried to provide a waed garden of Web sites for a their subscribers in the eary 1990s. For a whie, this mode worked, with a variety of custom content avaiabe ony to AOL subscribers. After time, this mode broke down as users started to demand access to sections of the Web that were not inside the wa. In addition, the cost of creating and preparing content to reside within the waed garden became very expensive, even for a arge company ike AOL with miions of subscribers. As the decade wore on, AOL eventuay switched to aow subscribers to have more open access to the Internet. Internet Video Internet video deivery systems use the Internet as a means to deiver programming to viewers. As a resut, the business modes for this technoogy are significanty different from the business modes used with IPTV systems. At the risk of competey abusing an anaogy, there is no wa around this garden. Tabe 3.4 summarizes the major cost eements for an Internet video service provider. Subscription-based pricing is much ess common in Internet video than in IPTV, athough Netfix, Amazon, and others are bazing a trai in this area, as examined ater in this chapter. This is most ikey due to the common perception that entertainment video is better suited to viewing on a teevision set than on a computer dispay (and sofas are typicay more comfortabe paces to sit than desks). In addition, most Internet video deivery services are unabe to offer anywhere near the video quaity of a purpose-buit teevision deivery service when both screen resoution and freedom from service interruptions are considered. Some common eements are shared by both technoogies. Both can rey heaviy on advertising, athough in the case of IPTV the advertising revenues tend to go more to the content providers, whereas in Internet video most of the ad revenues Tabe 3.4 Internet Video System Cost Eements Cost Eement Cost Basis Description Video Servers Video Content Internet Access Bandwidth Fixed, scae with number of streams provided Often paid as a percentage of the revenue earned, if not free Fixed, scaes with number of streams provided An adequate number of servers must be avaiabe to deiver streams to a of the simutaneous viewers of the content Paid to content owners, such as performing artists and producers Fees paid to ISPs to suppy high-bandwidth connections

66 Business Modes 41 are coected by the porta provider. Both architectures support a variety of VOD services, and both technoogies have a wide variety of business modes that have been used successfuy. The foowing sections describe some of the business modes that can be used to operate Internet video services. Pay-per-View Pay-per-view is often used for high-vaue content such as Hoywood movies. In this mode, the viewer purchases the right to view a specific piece of content over a specific time period (often 24 hours). The viewer is entited to pause, fast-forward, and rewind the content, but oses a rights after the viewing window expires. Typicay, the icense ony covers a singe viewing device. Part of the reason for these tight viewing window restrictions is simpe profit maximization, but another part is security. If a viewer somehow devised a method to enabe mutipe devices to view content, the resuting cracked fie woud ony be usefu for a short period because of the dispay time imit. Such technoogies hep imit the incentive to devise these iega techniques. Rights Purchase/Podcasting Much of the content deivered over Internet video systems is sod in the form of a permanent icense, where the rights to store and view the content are deivered to the viewer for an unimited time. Users are aowed to downoad the content onto their PCs or other viewing devices and pay back as desired. Typicay, there is a imit to the number of devices that can be used to pay the content to prevent viewers from reseing the content to other parties. One somewhat contentious issue for providers is the concept of backup copies. The current poicy of Appe itunes, ike many onine content services, is that backup copies for persona use are ega, but may not egay be distributed or sod to anyone by the origina buyer. 7 Consumers want the right to make backups so they don t ose the rights to a vauabe coection of content items as a resut of a hard disk or other device faiure. However, content owners fear that a ibera backup poicy coud resut in widespread misuse of their vauabe content. Subscription Some Internet video content is sod by subscription. Two business modes are often used. Live video access, where viewers pay a monthy fee in exchange for the rights to view ive streaming video (such as sporting events). Video ibrary access, where viewers pay a monthy fee to have access to a coection of content that can be payed. 7 (inteectua property, 14a).

67 42 IPTV and Internet Video Subscription modes work best when there is a coection of unique content and a group of viewers who are wiing to pay. Exampes incude Major League Baseba in the United States, news programming from a variety of countries in different anguages, and a variety of adut content. Another exampe is the tens of thousands of movies and TV shows avaiabe through Netfix and Amazon for streaming onto your teevision over the Roku device for a monthy fee. Financia success depends on controing the costs of production (perhaps by sharing production costs with other teevision outets, such as oca teevision broadcast stations) and on estabishing a subscriber base arge enough to cover the system costs. Advertising Supported As with e-mai and Internet search portas, many Internet video providers started out by offering free services to viewers. As the user base grows, it becomes economicay feasibe for the porta owners to se advertising space in the form of static ads dispayed on the porta s Web page, as graphics overaid on content dispay windows, or as video advertisements payed immediatey before the viewer s seected content. Revenues derived from advertising can be used in three interesting ways, aside from fiing the pockets of entrepreneurs and venture capitaists. One way is to use the revenues to purchase more content from suppiers, either as an outright purchase or in the form of revenue sharing. Another way is to hire peope and purchase equipment to create a arger-capacity and more user-friendy portas that wi attract more viewers and increase ad revenues. The third way to spend the revenues is on marketing, thereby attempting to increase the number of viewers using the porta. These choices are not mutuay excusive many providers wi choose to do a three as a way of increasing the success of their Internet video services. Free and User-Generated Content Human creativity knows no imits. The fortuitous combination of ow-cost, highquaity camcorders, animation software, audio recording/mixing software, synthesizers, and professiona-grade video editing software that can run on PCs has created an immense poo of peope who have the means to produce their own digita video cips and programs. Certainy much of the content that is produced is ony beautifu in the eye of its creator, but enough inspiring, intriguing, or amusing content is being produced to popuate any number of Web sites with high-quaity content. One way for service providers to create revenue from this type of Web site is to charge users a fee to host their video content to simpify sharing between friends and famiy members. As demonstrated by a number of photography sites that have done this, it can be tricky to create a profitabe business. Another way to fund a free video Web porta is to se advertising space on the porta itsef or to push advertisements to viewers before the content is payed. This can provide enough revenue for the service provider to cover their costs, particuary for bandwidth and storage.

68 Business Modes 43 A third common way to fund a free video Web porta is to offer previews of video content that needs to be purchased. For exampe, many professionay produced music videos are avaiabe for sae. A number of Web sites have been created that provide free previews of these cips, aong with inks to sites where they can be purchased and downoaded. Other types of preview content are avaiabe for movies currenty in theatrica reease or on DVD. Web sites that feature these previews can be funded by commissions or other cick-through accounting methods. Reaity Check Ceary, the scae of investment required to insta and operate an IPTV system requires some form of payment from viewers. The foowing Reaity Check takes a ook at one oca teecom suppier that has been abe to successfuy buid and operate a fairy compeing IPTV deivery system. Canby Tecom Canby Tecom is an incumbent oca exchange carrier ocated in Canby, Oregon, about 20 mies south of Portand. 8 The company has provided teephone service to oca residents for more than 100 years. Currenty, the company provides around 11,000 teephone access ines to 8600 customers. The geography covered by Canby Tecom consists of a good dea of agricutura and. The company provides service over an area covering 84 square mies. A arge number of Hispanic peope have moved into the area to work on the fower and tree nurseries that are a common feature of the area. In October 2004, Canby Tecom received approva for their business pan to depoy a fu set of tripe-pay services to their customers. In addition to the voice services they traditionay suppied, the company decided to offer broadband data IPTV service using DSL technoogy. The company began offering service to their first customers using this new system in October They are currenty in a secondary phase of upgrading their copper network to fiber to the home. 9 Canby s basic offering incudes voice, data, and video service using ADSLþ technoogy. Customers can receive broadband data service at up to 10.0 Mbps in the downstream direction, which they hope to raise to 20.0 Mbps in For subscribers within 5000 feet of a DSLAM, Canby is abe to offer up to three simutaneous video streams. Customers between 5000 and 8000 feet from the DSLAM can be suppied with two simutaneous video streams. 8 Information on Canby Tecom provided by interviews with company management (Keith Gaitz, president, and others) in November 2006 and through other pubished sources. 9

69 44 IPTV and Internet Video System Construction The Canby Tecom IPTV system was constructed using equipment and software from a number of different suppiers. This is the case with essentiay a current IPTV depoyments because of the wide variety of different technoogies invoved. The foowing ist indicates some of the origina buiding bocks and their respective suppiers. Content processors Tut Systems Astria CP. These units are responsibe for taking incoming programming from a variety of sources and converting it into the common compressed digita format that wi be deivered to viewers. Remote terminas (DSLAMs) Caix C7 Mutiservice Access Patform. These units sit inside Canby Tecom s faciities and generate the DSL signas that are sent to subscribers. They aso receive upstream data back from the subscribers. DSL modems Best Data 542 Four Port Ethernet switch/router. These units receive the incoming DSL signas and separate the packets into up to four streams. Three streams can each be connected to one of the STBs, and one can be used to provide high-speed access for a PC. Middeware Myrio. This software provides a number of functions, incuding supporting the channe change process and presenting information to viewers such as the EPG and the VOD seection menu. Encryption/DRM Verimatrix. This software works in conjunction with the Myrio software to protect the digita content from being misappropriated by viewers or by third parties. STBs Amino AmiNET 110. Sma, powerfu STB with Ethernet input. This supports standard definition MPEG-2 programming ony. Today they are MPEG-4 based for the 36 HD channes they offer using the Entone STB. Services Offered Canby offers quite an impressive array of tripe-pay service options. Basic teephone service is avaiabe throughout the company s serving area. DSL service is avaiabe to 99.6% of the homes and businesses in the serving area. By November 2006, IPTV service was avaiabe to 3000 homes in the serving area. The IPTV service offers 200 standard definition and 36 channes of broadcast DTV with a variety of basic and enhanced packages at $21.95 ( economy ) and $55.95 ( essentias ). These packages combine oca programming, video on demand, and caer ID on TV. Investment Canby Tecom was somewhat of an eary mover in the IPTV market, due to the company s desire to ro out services beginning in This may have caused the cost of their system to be higher than what might be typica today for two reasons. The cost of MPEG-2 compression technoogy continues to decine, simiar to other trends in the high-technoogy fied. Some of the technoogies that Canby had to use were quite new and had not been fuy integrated with the other technoogies. As a resut, the integration costs may have been higher than what woud be experienced for a simiar system today.

70 Business Modes 45 Even with these higher costs, Canby was abe to insta their entire IPTV digita head end for ess than $2 miion of invested capita. The primary cost eements incuded the foowing. Digita head end, which incudes content processors and other signa receiving and processing functions, accounted for 70 to 75% of this tota. VOD system, incuding the disk drives that actuay store the content and the servers that create the IP packet streams that deiver the content to viewers, accounted for 20 to 25% of this tota. Other equipment, incuding the sateite receiver dishes and associated eectronics, middeware servers, and initia icenses, accounted for the baance of the investment. Resuts Due to a combination of good engineering, affordabe pricing, and reativey weak competition from the oca cabe TV company, Canby Tecom has been abe to achieve good take rates. In November 2006, the company had 900 IPTV subscribers, out of a tota of approximatey 3000 homes passed, for a take rate of 30%. What s more, 77% of the IPTV customers took the fu tripe pay of video, voice, and data from Canby, heping prevent erosion in the basic teephony popuation, which had been a concern of Canby s management. As of February 2009, the company s IPTV subscribers had grown to Summary This chapter discussed a variety of topics that reate to the business modes being tried for both IPTV and Internet video. Because these technoogies and their appications are so new, it is difficut to determine which business modes wi be successfu and which ones wi not pan out. Ony with time (and some arge sums of money) wi these answers start to emerge. We began by ooking at both equipment costs and programming costs for an IPTV system. Then, we examined some of the methods that can be used to get viewers to pay for these services, incuding subscriptions, oca advertising, and VOD. We then ooked at severa business modes that have been used with Internet video, incuding pay-per-view, podcasting, subscriptions, and advertising supported. We aso ganced at free video portas that have been supported primariy by investors with deep pockets who hope to devise a way to earn a return in the future. We concuded with an in-depth ook at a rea IPTV system that is meeting its financia goas ahead of pan.

71 This page intentionay eft bank

72 4 Network Overviews The American fascination with teevision and other video content is not easing up, as consumers keep turning to TV, Internet and Mobie at record eves. Viewers appear to be choosing the best screen avaiabe for their video consumption, weighing a variety of factors, incuding convenience, quaity and access. It is cear that TV remains the main vehice for viewing video, athough onine and mobie patforms are an increasingy important compement to ive home-based teevision. Susan Whiting, vice-chair of the Niesen Company (February 2009) IPTV and Internet video systems can be very compex puzzes to piece together. As any jigsaw enthusiast wi say, it is hard to understand how each individua piece fits without an overa picture of the integrated whoe. In this chapter, we hope to provide this big picture view of the technoogy components and how they work together. A wide variety of network architectures have been used successfuy to deiver IPTV and Internet video services. Describing a those variations is impractica in a singe book, but it does make sense to ook at typica network architectures for each deivery method. By understanding these reference modes, readers wi get a better understanding of a the eements that make up both types of video deivery systems. Interestingy, in the IPTV section, we wi spend most of our time describing hardware components, whereas when it comes to Internet video, we wi spend a ot of time discussing software. Why the difference? The reason is because most IPTV networks have to be constructed from a number of hardware components to reach into viewers homes, whereas Internet video deivery takes pace over inks to the Internet that are purchased independenty by each subscriber. In other words, IPTV service providers usuay need to buid a network to reach their viewers, whereas Internet video service providers typicay use existing infrastructure. The Corner Office View: AT&T IPTV 2005 When the first edition of this book was pubished, AT&T was on the verge of aunching their IPTV product. Jeff Weber, SBC s vice-president of product and panning, said at NAB 2005, At the highest eve, the economics ook dramaticay different today [2005] than they did 10 years ago...the improvements in compression technoogy, the abiity to do switched video instead of broadcast video, the technoogy deveopment on a scae around the word makes [IPTV] rea. As these standards evove and I think SBC can hep provide that the scae and the economics come down, driving the depoyment costs [down].

73 48 IPTV and Internet Video AT&T IPTV 2009 Five years ater, AT&T U-verse SM provides IPTV service to over 1 miion subscribers, representing an increase of 264,000 in the fina quarter of 2008 aone. The service is avaiabe to more than 17 miion iving units. Randa Stephenson, AT&T chairman and chief executive officer, reports Our AT&T U-verse TV service continues to ramp. We competed the word s argest depoyment of the fastest Internet backbone technoogy across our U.S. network. We further expanded our industry-eading network capabiities and product sets for the business market. This chapter is divided into two sections, one focusing on IPTV networks and the other focusing on Internet video networks. Each section incudes detaied descriptions of the major components, both hardware and software, that go into these networks. Reaity Checks for both types of networks are incuded at the end of this chapter. Constructing an IPTV Network IPTV networks can be buit to serve miions of subscribers or just a few thousand. Large systems can be nationa in scope and can be optimized to deiver hundreds of channes of programming across thousands of mies of networks. Sma systems may service a oca community with just a few dozen channes or a singe company in one buiding. In either case, cost-effective depoyment of both the centra equipment and the deivery network is crucia to successfu business operations. One thing to keep in mind is that IPTV networks are typicay designed for a phased depoyment. Not a services are offered to a potentia subscribers when a system is first aunched, for the foowing two reasons. Time is needed to test and kick-start revenues. The compexity of depoying an IPTV network can require many hours of engineer and technician time from both system operators and their vendors for instaation and system integration. Since staffing budgets are typicay imited, services must be depoyed ony after they have been propery tested and integrated with the other network eements. Aso, the equipment that is required to depoy advanced services may be too expensive to insta unti after enough customers have been acquired to provide an adequate revenue stream. Buiding a subscriber base wi occur graduay after aunch. Consumers wi take varying amounts of time before deciding to subscribe to new IPTV service offerings, particuary if their teevision viewing needs are being met by other technoogies. A prudent business pan recognizes that effort wi be needed to convince customers of the benefits of a new teevision deivery method. It is simpy not reaistic to assume that 20% of the avaiabe customer base wi sign up as soon as a new service is aunched.

74 Network Overviews 49 Because of these two factors, it is important to deveop a construction and customer activation pan that grows over time. A first aunch may see ony a very sma percentage of the avaiabe customer base signing up for service. Therefore, the network must be designed to keep the cost of the centra equipment ow during the eary phases of depoyment. Outside pant construction may initiay target areas with high densities of customers, where the costs can be kept ow reative to the number of residences that wi be wired for service. Two important metrics are used in financia pans for IPTV systems. The first is a cacuation of the tota number of homes passed by the network, which is essentiay the number of residences where the network is physicay present and avaiabe for connection to any customer who wants to become a subscriber. The second is a cacuation of the tota number of subscribers that have actuay signed up with the IPTV service provider to receive video service. One sign of a depoyment s success is the ratio of the number of subscribers to the number of homes passed the take rate. Initiay, this ratio wi be very ow (in the singe digit percentages) and increase sowy over time. Note that this ratio wi never reach 100%, due to the avaiabiity of other technoogies in most service areas (such as cabe TV or sateite) and due to the fact that not a consumers wi want to pay for teevision services at any price. We expore these concepts more in Chapter 9. Typica System Architecture For very arge IPTV deivery systems, there is often a hierarchy of faciities constructed to deiver video signas across a arge expanse of territory. One (or two, for disaster recovery) super head end (SHE) can serve miions of customers by processing the video channes that are common to a subscribers across the serving area. A video serving office (VSO) wi be ocated in each region as required to hande oca programming and channes specific to a singe city or geographic area. A centra office (CO) or remote termina (RT) can serve as a oca end office (LEO) that contains the equipment needed to actuay deiver the programming to customers in a oca area. This is typicay a portion of an existing faciity aready owned and operated by a teephone company or other oca utiity. The roes of each of these faciities are expained in more detai in the foowing sections. Note that different companies may have different names for these various faciities; what s important is that each of the functions described is performed somewhere in the network. Figure 4.1 shows an overview of a typica IPTV system architecture. Note that for smaer-scae IPTV systems, these three functions may be combined in a singe ocation. The functions a need to be performed; they just might not be performed in separate faciities as described here. Super Head End A super head end is the primary source of programming for the IPTV system. It is responsibe for gathering content from programming suppiers, converting it into the appropriate form for deivery over the IPTV network, and transmitting the content to

75 50 IPTV and Internet Video Sateite Dishes Content Processors Content Preparation and Storage Super Head End Video Serving Office IP Router VOD and Advertising Servers Loca Content Processors High Capacity IP Networks Loca Off-Air Antenna DSLAM IP Video Services Data Services Teephony Services DSL Spitter Digita Subscriber Loop Loca End Office CO or RT DSL Spitter DSL Modem IP Video STB Video Audio Voice IP Data Figure 4.1 Typica IPTV system architecture. Viewer s Home the VSOs. The SHE may aso be the ocation where content is prepared for storage on video servers that wi be used to deiver VOD services. Let s ook at each of these functions in the SHE content work fow: 1. Content Aggregation. Content must be gathered from a number of different programming suppiers. The programming can be anything that wi be deivered over the IPTV system, such as standard teevision network feeds; speciaty channes that may feature sports, news, music, drama, chidren s, or nature programming; premium movie channes; or other nonbroadcast feeds. In many cases, these video signas may be gathered from a group of sateite receivers or from a terrestria video transport network. Most often, these incoming signas wi be in an encrypted digita format so the appropriate receivers must be abe to receive the necessary commands and decryption keys from the programming suppiers.

76 Network Overviews Conversion. Incoming content must be converted into the form that wi be transmitted over the IPTV system. To simpify operations, each channe wi ikey need to be formatted in a very standard manner standard bit rates, standard packet format, standard compression method, and everything ese that wi make it possibe for the viewer s equipment to understand the video signa and how to process it. Since programming suppiers are free to choose any type of compression, it is very common for transcoding to be required. Transcoding is the conversion of signas from one compression format to another. The input to the transcoder can be any type of video uncompressed video, MPEG-2, MPEG-4, or VC-1 at whatever bit rate the content suppier has chosen. The output needs to be compressed with the proper codec and operating at the specified bit rate for the IPTV network. 3. Transport. The compressed video signas must then be transported over a network to each of the VSOs. In some cases, this network wi be owned and operated by the IPTV provider; in other cases, network capacity wi be eased from a ong-distance network provider. In either case, these networks wi tend to be terrestria (with some exceptions for geography) because the arge bandwidths needed to suppy hundreds of channes to many ocations may be too expensive for sateite. In many cases, the networks connecting the SHE to each VSO wi be redundant. This aows operations at a VSO to continue even if a major network faiure has occurred. In very arge systems those serving hundreds of thousands of viewers or more a second SHE wi be constructed to prevent a singe catastrophic faiure from cutting off teevision service to a arge number of viewers. In this case, the two SHE ocations can be hundreds of mies apart to enhance survivabiity. 4. Formatting. Content intended for deivery to viewers on a VOD system can arrive in a wide variety of formats. Some content may arrive in one of the many different professiona videotape formats or on DVDs. Content may aso be deivered as data fies sent over an IP network. Sti other content may be transmitted over rea-time broadcast inks (such as fiber or sateite), requiring a mechanism to receive video signas and store them for further processing. Regardess of the source of the content, severa key functions must be performed on each VOD content eement. The content must be transcoded and converted into a common format that can be interpreted by every STB, standardizing parameters such as bit rate and compression technoogy. The content wi aso need to be cataoged and abeed for reference, and software tags (known as metadata) wi need to be added that indicate the duration of the video, describe the content for viewers, ist any restrictions on the storage or deivery of the content, and so on. Formatting content into IP packets is not required at this step that wi be the function of the VOD servers that actuay deiver the video signas to the users. Advertising content may aso need to be processed by the SHE. Most of the processing steps are the same for ad content as program content, with the exception that the resut wi be deivered to advertising servers instead of VOD servers. Ad servers may be ocated in the SHE for inserting ads into programs that wi be deivered throughout the IPTV system, and they may aso be ocated in individua VSOs for ads that wi run ony in specific regions. As with VOD content, proper abeing and deivery of advertising content fies are crucia to success. Distribution of the VOD and advertisement content to servers ocated in a VSO wi typicay be in the form of fies sent over a standard data network. Since this content is not being viewed in rea time, redundancy is typicay not required. In the event of a faiure of the network between the SHE and a VSO, the content can simpy be

77 52 IPTV and Internet Video transmitted again once the network is repaired. One thing that wi be crucia on this network is security. Content owners wi want strong assurances that their vauabe tites won t fa into the hands of video pirates. Accordingy, the VOD fie distribution system wi use encryption and/or physicay secure networks (such as private fiber optic inks). A of these different functions in a SHE wi require hardware and software systems. Staffing wi be required to monitor system operations, repair any faiures in a timey manner, and perform tasks that require human intervention, such as VOD fie processing. Video Serving Office A VSO provides video processing and deivery services for a geographic region, such as a city. Each VSO can receive content from a SHE, as we as oca programming sources. It is responsibe for distributing a of this content in rea time to every centra office/remote termina (CO/RT) in the region. A VSO wi aso typicay serve as the ocation of the VOD and other servers that deiver speciaized content to viewers. Customer service, biing, and other reated operations may aso be housed in the VSO. VSO functions aso incude: 1. Locaization. One of the most important functions of the VSO is to process content specific to the oca region. This might be from oca over-the-air broadcast stations or it might be ocay originated programming from other sources, such as educationa institutions, government sources, or pubic access channes. Simiar to a SHE, oca content can arrive in forms that need to be converted into the common IPTV deivery format. 2. Compression. Video content processors take many different types of video inputs and create video outputs in the format necessary for distribution. Content processors can take video signas that have been compressed at one bit rate and convert them into a different bit rate. They can aso take video signas that have been compressed using one standard (such as MPEG-2) and convert them into a different standard (such as H.264). Some content processors can aso take uncompressed video and compress it using any one of severa compression standards. 3. Stream Creation. The VSO wi aso be the ocation where actua IPTV streams are created. These streams consist of packets that are sent out to COs/RTs. The eve of sophistication of the remote equipment wi determine the number of streams that need to be generated by the VSO. With simpe remote equipment, the VSO wi need to generate one stream for every active viewer. With sophisticated remote equipment capabe of dupicating outbound video packets, ony one stream for each broadcast channe wi need to be generated. In this atter case, when mutipe viewers are watching the same channe, the remote equipment wi make as many copies as necessary (muticast) to feed one to each active viewer. 4. Storage VOD servers are aso typicay housed at the VSO. These systems are responsibe for creating the individua (unicast) streams sent to each subscriber when viewing VOD content. With true VOD, each viewer has the abiity to pause, fast-forward, and rewind the video stream. Because commands from each viewer need to be processed rapidy and uniquey, the contro functions of the VOD server are as important as content payout. 5. Loca ads can be an important source of revenue for the IPTV operator. These ads can be inserted (with proper approva) into both nationay and ocay originated programming.

78 Network Overviews 53 Ad servers are used to store advertisements after they are received from the SHE or other source. Ad inserters scan the active channes ooking for avai signas, then retrieve the correct ad from the server, and insert the ad into the outbound video signa. 6. Interactivity is one of the main competitive weapons for IPTV as compared with sateite teevision. At the VSO, commands from individua STBs are gathered and processed. One of the main interactive functions is the seection, purchase, and viewer contro of VOD content. Another is actua interaction with video content, such as voting for a game show contestant or making purchases on a shopping network. To support these functions, the VSO needs to be equipped with appications servers that run the software needed to process commands from viewers. 7. STB authorization is important to the financia we-being of the IPTV provider. Systems in the VSO wi vaidate each STB is authorized before it can receive video content to eiminate unauthorized viewing. Two goas can be achieved through the use of scrambing and encryption: the IPTV operator can ensure that ony paying customers are viewing content and that the content can be protected from unauthorized dupication and retransmission. 8. Fiber deivery. Typicay, a fiber optic network consisting of mutipe gigabit Ethernet inks is used to connect the VSO to CO/RT ocations. These can be packed onto reativey few fibers by using a different waveength (coor) of ight for each GigE stream. Centra Office/Remote Termina Many IPTV networks use existing teephone company physica infrastructure, incuding buidings. Centra offices contain teephone ca switching equipment. Remote terminas, which are often ocated underground, contain systems that connect subscriber ines and digita or fiber optic inks to the nearest CO. In both types of buidings, equipment can be instaed to deiver IPTV services over DSL circuits. The equipment ocated in these faciities must perform severa different functions. 1. DSLAM function. Inside each CO/RT are one or more digita subscriber ine access mutipexer (DSLAM) units (which can aso be caed video remote access devices [VRADs]). The basic function of a DSLAM is to act as an Ethernet switch and connect video traffic arriving from the VSO to the DSL ines going out to each subscriber premises. To accompish this, the DSLAM examines the IP address of each incoming packet and forwards it over to whichever DSL circuit connects to the subscriber device with that IP address. 2. Muticasting technoogy (usuay based on Internet group management protoco [IGMP]) is usefu for IPTV video broadcasting and is supported by some of the newer brands of DSLAM. With this technoogy, the DSLAM is capabe of taking a singe stream from the VSO and repicating it to feed mutipe simutaneous viewers of a singe channe. Without this technoogy, the VSO must create an individua video stream for every viewer. 3. Connectivity. The DSLAM must aso connect the existing teephony system in the CO/RT. A DSL spitter or hybrid bridge is used to aow both the DSL equipment and the existing phone equipment to share a singe pair of copper wires that eads to each subscriber s home. 4. Combining services. Severa different services can a share the high-speed bandwidth offered by a DSL ine to a consumer s premises. IPTV video services are, of course, one component. Another is high-speed data service for Internet access; this traffic can be separated by the DSLAM and connected to an IP data router for processing within the CO. Services such as VoIP coud aso be deivered to separate outputs of the DSLAM if configured appropriatey.

79 54 IPTV and Internet Video Customer Premises One of the most difficut environments for an IPTV operator is inside the viewer s home. IPTV devices require power, a physica ocation, and a network wiring system to connect to one or more STBs ocated around the house. Many different technoogies have been empoyed here, incuding HomePNA, coax, and twisted pair, and some investigations are ongoing into wireess connections. 1. A DSL modem is instaed in each home to receive the high-speed digita signas from the DSL circuit and convert data into forms that other devices can use. This device can be stand-aone or integrated into a home gateway. 2. A DSL fiter is used in each home to prevent standard teephones from receiving the high-speed signas processed by the DSL modem. 3. The home gateway is an optiona piece of equipment instaed by some service providers to provide contro of and communication to mutipe STBs. This device can aso serve to manage the home network to ensure that Web surfing from a PC in the home does not compromise high-priority video traffic. It can aso serve to convert between the different types of cabing used inside the house and the high-speed DSL ines. 4. The STB supports much of the functionaity within an IPTV system. It decodes the incoming digita video signas, produces on-screen graphics, supports user channe changing and other interactive functions, and many other tasks. Without a suitabe STB for each teevision set, an IPTV system woud be unusabe. Typica Software Capabiities Software performs many key functions inside an IPTV network. As is the case for a PC, an IPTV system simpy woudn t function without software. The foowing sections describe a number of software functions typicay found in IPTV systems. Eectronic Program Guide The eectronic program guide (EPG) is an on-screen dispay that tes viewers which content is avaiabe on which channes. This can incude both broadcast channes avaiabe to a viewers simutaneousy and VOD content avaiabe for viewers to watch individuay. Program guide information can either be produced by the IPTV network provider or, as is most often the case, purchased from an externa suppier. Two main types of EPGs are avaiabe. The first is a scroing program guide, where the content on each avaiabe channe is dispayed in channe number order on a grid that sowy scros up the teevision screen. This scheme does not require interactivity from the viewer and can become annoying to users as the number of channes exceeds fifty. The second type of EPG is caed an interactive program guide. In this scheme, a grid of channes and content choices is dispayed on the teevision screen, as described previousy. However, in this case, viewers have the abiity to navigate

80 Network Overviews 55 around in the grid using their remote contros. The viewers can scro and jump up or down in the grid to view different channes and can aso scro to the right to see future programs. System operators have two choices for handing EPG functions. Inteigent STBs with embedded EPG functionaity can be used. In this case, data for an interactive programming guide are broadcast to a the STBs on a periodic basis. Each STB is responsibe for storing the atest information and for creating the dispays. This is done to enabe rapid response to the viewer s commands and to eiminate the burden on centra equipment of having to process scro commands from every viewer. This is aso why newy connected STBs can require time before being abe to dispay an accurate program guide, as it may take a whie for a the information to be received and stored. In other cases, the interactive program guide processing is centraized in the VSO. In this architecture, the STB simpy sends viewer commands upstream and receives new dispay information downstream. This system has the advantage of reducing the amount of processing that takes pace in the STB, but has the disadvantage of requiring more communication between the STB and the VSO. Conditiona Access System A conditiona access system (or CA system) contros which users are abe to view which programming. For exampe, ony viewers who have subscribed to a premium movie channe are aowed to have access to that content. This can be reativey simpe to impement in an IPTV system because the system simpy needs to ensure that streams are never deivered to users who are not authorized to receive them. In contrast, a different approach is needed in a sateite or traditiona cabe TV system, where a channes are present at the input to each STB. In these systems, the content must be scrambed, encrypted, or otherwise made unavaiabe to unauthorized viewers. Video-on-Demand System A VOD system provides users with content that can be viewed at their discretion. This typicay consists of a set of content fies stored on a server and payed out under the contro of users. Software for a VOD system needs to perform severa functions, some in conjunction with other software modues. The avaiabe tites need to be isted and described by way of the EPG. Any required payment must be coected. A network connection (possiby via severa hops) needs to be set up between the VOD server and the viewer s STB to deiver the content. The proper keys for decoding any content encryption need to be sent to the STB by the digita rights management (DRM) system (covered in the next section). Viewer commands (such as pause, fast-forward, and rewind) from the middeware system need to be retrieved and processed rapidy to contro how the content is payed out. A of this needs to happen fairy quicky in response to user actions so that the system operates as video on demand and not video when the system is good and ready.

81 56 IPTV and Internet Video Digita Rights Management System A digita rights management system is designed to protect the property rights of a content owner. The focus of DRM is to contro what the viewer can do with content after it is deivered, whereas a CA system contros whether the content wi be deivered to a viewer. DRM typicay invoves some form of encryption or scrambing that renders the content unwatchabe without the appropriate key. The key is usuay some type of numeric vaue that contros the operation of a descramber or decryption device. This topic wi be covered in more depth in Chapter 7. In addition to content scrambing, the DRM system needs to ensure that unauthorized copies or recordings of the content are not made. This usuay takes the form of some type of scrambing or signa ocking at the output of the STB. Subscriber Management and Biing System The revenue stream of an IPTV provider depends on an efficient, functiona system for managing subscribers and gathering data needed to prepare accurate bis. Here is a brief ist of functions that are normay required. Device association, where a specific subscriber is inked with a specific set of hardware, such as an STB. Accuracy in this process is essentia to ensure that the STBs have been depoyed correcty and that any charges incurred by an STB actuay beong to the associated subscriber. Subscriber services profie, which indicates the services that the subscriber has ordered, such as a specific set of premium content channes. This system aso needs to accuratey track when customers ca to add or remove services so that STB contro settings can be adjusted appropriatey. Subscriber purchase history, which records the specifics of any purchases such as premium VOD content. Service ca ogging and repair dispatch, which has a big impact on subscriber satisfaction eves when they ca for repairs. Accuracy is essentia, so subscribers can be tod when to expect repair technicians to arrive and when their service wi be restored. It can aso hep technicians understand the probems that were reported by the subscriber and any steps that have aready been taken to isoate the faut. It is not uncommon for specific types of content to require direct payments to the content owner. This might be a monthy payment per subscriber for a premium sports channe or a per-viewing charge for a new-reease movie offered on VOD. IPTV providers who don t have good biing systems in pace can find themseves in vioation of contracts requiring payment to the content owners. In extreme cases, a poor payment or fauty security system coud resut in the IPTV provider osing access to premium content in the future. It s interesting to note that many companies are coming to recognize the growing importance of customer service for IPTV and other systems. Amdocs, a eading suppier of customer management soutions to service providers, commissioned a survey of service providers in The resuts were quite interesting: 75% confirm that faster time to market wi reduce customer churn more than 90% recognize that decreasing time to market requires investment in OSS (Operations Support Systems).

82 Network Overviews 57 Emergency Aert System In the United States, the federa government requires that teevision and radio broadcasters and cabe teevision system operators impement an Emergency Aert System (EAS). This system can be used by the President to make an announcement to the pubic in a time of nationa emergency. Use of the system is aso permitted for state and oca agencies to warn of certain hazards such as tornadoes or other dangerous weather. The system must be capabe of interrupting programming on a channes provided by the teevision system and of inserting an appropriate warning or other instructions. On-screen graphics may aso be used. The EAS must be instaed in each active system and must be tested weeky and monthy. Faiure to have an operationa EAS can resut in significant fines for the system operator. Constructing an Internet Video System Buiding an Internet video system is easier in some respects than buiding an IPTV system but more difficut in others. Construction is easier because an IP network, with a of the accompanying packet deivery hardware, does not need to be buit, as the Internet wi be used. However, buiding a deivery system that has adequate capacity to hande the peak number of simutaneous users whie aso being affordabe can be a difficut baancing act. Accordingy, many systems are designed to be scaabe so that capacity can be added quicky and easiy as demand grows. Some hosting companies offer this as a service, where system capacity can be rented incrementay as demand grows. The basic eements of a content deivery system incude a content preparation system, a Web site to serve as a anding point, a video deivery server, and a viewer device to watch the programming, usuay a PC. A content deivery network (CDN) may aso be used to assist deiveries to viewers. Each of these eements requires software for operation, much of which can be purchased off the shef. The foowing sections discuss the principa hardware eements and then the software appications hosted on them. Typica Hardware Architecture The vast majority of the hardware needed for an Internet video deivery system can be housed in a singe faciity, athough it does not need to be. The quaity of connectivity between the different systems eements and between the systems and the Internet is a primary determinant of system performance. In very arge appications capabe of deivering thousands of simutaneous streams to viewers, hardware distributed at severa different geographic ocations can actuay hep performance by eiminating bandwidth bottenecks that might occur. For an overview of a typica Internet video system, see Figure 4.2.

83 58 IPTV and Internet Video Content Preparation Content Payout Commands Web Server Content Browsing & Searches Compressed Content Internet Content Deivery Figure 4.2 Video Server Typica Internet video system architecture. Cient PC Content Preparation System Raw video content, such as a ive image generated by a camera or video that has been recorded to a tape, is generay not we suited for streaming appications; the content needs to be processed to make it ready for streaming. Processing can incude format conversion, video compression, abeing and indexing, and pubishing for streaming. Capturing and preparing content for viewing can be a simpe or a highy compex process, depending on the goas of the users and their budgets for time and money. For some users, taking a home video camera and pacing a compressed video image on their persona Web site is adequate. For others, professiona production, with carefuy edited images and graphics designed for Web viewing, is required. Sometimes, mutipe versions of a video fie are required. This is the case if users are given the choice of two or more different media payers or if the video is to be encoded at different bit rates. Low bit rate videos are deivered to users who have ower speed Internet connections. High bit rate videos deiver better images if viewers have access to high-speed Internet connections. Using software toos embedded in a video server, each user s connection speed can be measured automaticay and dynamicay so that the video bit rate can be increased or decreased as network conditions change, and the user is not aware of the changes. A different video fie must be prepared for each bit rate and codec combination so that if two viewer types are supported and three different bit rates are offered, then six different fies must be prepared; this can be done automaticay by some authoring toos. Web Server Web servers are used in Internet video systems to assist viewers in seecting content to view. A typica page wi contain descriptions of the videos, as we as seected

84 Network Overviews 59 stis from one or more videos. Some of these Web pages are configured to have embedded inks to video content that begin video payback as soon as a user views the Web page. These Web pages can be viewed with a standard browser and searched by norma text-based search engines. Videos can be tagged with text abes by viewers to assist others in searching. Many pages aso contain inks to other pages of video with reated subject matter. Web servers often support a number of other functions. The foowing are some common Web server capabiities: User and e-commerce administation. Some sites require payments or user og-ins prior to viewing. Web servers often hande the whoe process of managing user profies, coecting payments, and encouraging nonmembers to enro before entering the site. User ratings. Many sites aow users to rate or vote on particuar videos. Web servers can gather this information from users, store and process it, and create pages that show the summarized detais to other users. User comments form a huge part of many sites appea. Web servers are used to coect, manage, and dispay these comments. Care must be taken to ensure that the comments are associated with the proper videos and that any rues about the use of profanity or copyrighted materia are foowed. Ad pacement. A number of video Web sites use advertising as a source of revenue. Web servers must be configured to deiver the correct, current advertisements. More sophisticated servers can deiver context-sensitive advertising, where the choice of ads to be dispayed is based in part on the type of video featured on the page. For exampe, if a Web user is ooking at a video that features a famous comedian, then the Web server coud dispay an advertisement for a DVD of that comedian s most recent movie. Video Server The video server is the workhorse of an Internet video system. It is responsibe for securey storing the video fies that can be viewed. In addition, the video server must create the packet streams that are deivered to each viewer. The video server must aso hande encrypting or scrambing the outbound video streams to ensure that they are protected from unauthorized use. Storage: The video server ony needs to have enough capacity to store the video fies it is providing. Accordingy, servers can have either arge or sma capacities. If mutipe versions of the video fies have been created, then the server needs to have enough capacity to store a of the different versions. Stream creation: The video server must be capabe of deivering a stream to each requesting user. This is essentiay aways done on request so that each time a user wants to view a video, the server needs to create a stream of packets to send to that specific viewer. Every packet in the stream needs to be created by the server, because each one must contain the specific destination IP address corresponding to the viewer s device. Whie this is not an incredibe burden for a few video streams, the workoad on the video server increases as more users are added and more streams are requested. Security: Fies stored on the video server are typicay encrypted or scrambed for two reasons. First, by pre-encoding the fies, it reduces the amount of work that needs to

85 60 IPTV and Internet Video be done by the DRM system when fies are streamed to viewers. Second, in the event that an unauthorized third party gets access to the content on the server, the encoded fies wi be unwatchabe. Content owners often specify contractuay how their content is to be handed, and this may incude the form in which the content is stored on the server. Live Streaming Server A ive streaming server is a speciaized device that enabes scaabe deivery of ive video programming to mutipe users simutaneousy. It operates by taking in a singe stream of content and producing mutipe copies for deivery to mutipe viewers in rea time. Typicay, viewers who want to watch the ive content wi navigate to a centra Web site that acts as a porta (covered in Typica Software Architecture ) for the content. Users who navigate to the porta are then redirected to the ive streaming server as soon as they request to watch the video. Once they are connected to the streaming server, a copy of the source video is created inside the server. This new copy is then formatted into IP packets addressed to the viewer s device and sent out for deivery over the Internet. Cient PC Most Internet video is deivered to PCs for viewing, athough other devices are becoming avaiabe. Each PC must be equipped with software capabe of receiving the incoming video packets and converting them into a video image on the user s dispay. In order for this software to work propery, adequate hardware must be present. Most recenty produced PCs have enough processing power to decode and dispay standard-definition video images that have been compressed using standards such as MPEG-2 and MPEG-4. High-definition streams (which are becoming more common in Internet video) may require hardware acceerators found on advanced graphics cards in order to produce HD image output. Typica Software Architecture Software is a key eement of any Internet video system. It pays a major roe in enabing viewers to find and seect content, deivering the content, and paying the content on the viewing device. Let s take a ook at some of the major components. Porta Web Site A porta Web site typicay provides a common aunching point for viewers and content providers. From a viewer s standpoint, a successfu porta has a wide range of content that can be easiy searched and navigated through to ocate content that wi be interesting to view. From a content provider s standpoint, a good porta wi attract

86 Network Overviews 61 a arge number of potentia viewers. Exampes abound on the Internet, incuding YouTube and Huu.com. A we-constructed Web site wi typicay have a number of different ways to search for content. One method uses a standard text-based search on the tite of the video. Another method uses tags (simiar to keywords) that have been added to video fies by viewers that describe particuar attributes of the video, such as turtes or funny. Sti other methods may rank videos by popuarity in a number of categories or dispay videos that are watched frequenty by viewers who have watched the currenty dispayed video. Many Web sites aso aow viewers to post comments or rate videos, thereby increasing the eve of viewer participation. Web sites typicay consist of a number of Web pages that serve as the user interface to video content. Different approaches are taken in the design of the user interface. Some Web sites wi have a singe featured video per page, which wi begin paying as soon as the user navigates to that page. Other Web sites wi have a coection of inks to sti images excerpted from videos; when the user chooses one of the thumbnais (sma pictures) to view, the video wi begin paying in a new window or Web page. Choosing between the two methods is reay a matter of preference, and both are widey used. Examining the HTML code for a video Web site page reveas that the actua video content is not contained in the page itsef, but is instead stored esewhere. The Web site handes interaction with the user and provides inks to the ocations where the content is actuay stored. One benefit of using this technique is that it avoids having the user s browser attempt to oad a compete video fie each time the user navigates to a new page of the Web site. Instead, what happens is that the Web site page oads to give the user a compete page image with everything but the video, and then an automatic process takes pace to stream the video fie to the viewer. What the user sees is a Web page with an active video window, but in reaity these two items are deivered separatey and united inside the user s Web browser software. If the user navigates away from the page (or presses one of the contros to pause, rewind, or fast-forward the content), then the Web page remains static, but the streaming engine reconfigures itsef to deiver the user s new seection. Streaming Engine The streaming engine is a software modue on the video server specificay designed to create a series of IP video packets for each outbound stream. Each IP packet must have source and destination IP addresses. In order for the video packets to reach the correct destination, the server must create headers for these packets with the correct IP destination address. Since streaming is done on a rea-time basis, the engine must aso create webehaved streams, meaning that the pace of the packets shoud be reguar and consistent. The rate of the packets aso has to be controed such that the payer receives ony as many packets as needed to render the video and audio correcty. Too fast and the payer woud be required to store the extra packets before payback, creating

87 62 IPTV and Internet Video havoc with the payback if the buffer overfowed. Conversey, if the pace sows too much, the payer woud be starved for data and woud have to freeze or interrupt the user dispay to compensate whie waiting for new data to arrive. Athough software payers normay incude sma buffers to smooth out the inevitabe variations in packet arrivas caused by IP networks, the goa of a streaming engine is to deiver a 5-minute, 10-second stream in 5 minutes and 10 seconds. Content Deivery Network For popuar Web sites, it is expensive to purchase enough video server capacity to hande peak oads when many viewers are trying to watch videos simutaneousy. Service providers offer content deivery network services to Web site owners who are wiing to pay to have their Web sites oad quicker, both because of the greater quantity of CDN servers that can be brought onine as demand peaks and because the servers are distributed geographicay around the Internet to be cose to viewers. A wide variety of CDN services are avaiabe; they can be purchased by both arge and sma Web site providers. Web Browser Web browser software resides on a viewer s PC, mobie phone, or other device and enabes a viewer to view and navigate through Web pages that contain text, graphics, and other data. Exampes incude Microsoft Internet Exporer, Appe Safari, and Mozia Firefox. Viewers use these programs to navigate through Web sites to find content to view. Web browsers work with static content such as text and graphics that can be described with HTML commands. One of the best features of HTML is the abiity to embed hot inks into documents these have the effect of directing the browser software to a new Web site that is then downoaded and dispayed on the viewer s device. Browsers use mutimedia pug-ins to support other functions such as video and audio payback. These pug-ins consist of pieces of software stored and run on the viewer s PC or other device that can interpret video, audio, and other specia types of fies, such as Fash. When a Web site contains content beyond the scope of norma HTML, specia commands are used to put the correct pug-in into operation when the content is seected. We spend more time on browsers and pug-ins in Chapter 11. It is common for a singe PC to have a number of pug-ins to support a variety of mutimedia types. Different pug-ins are used for different types of media; one type of pug-in is used for viewing Fash animation whie another is used to pay a compressed audio stream. Because the pug-ins are aso cosey tied to the interna workings of specific operating systems, a Quick-Time pug-in for a Macintosh won t be usefu for paying Adobe fies on a Windows PC. Media Payer A media payer is another piece of software resident on the viewer s device. Exampes incude Microsoft s Windows Media Payer, Appe s QuickTime, and

88 Network Overviews 63 Rea Payer from Rea Networks. A media payer performs a very simiar function to a browser mutimedia pug-in in that it takes a content stream and turns it into images and sounds that can be seen and heard by the viewer. However, there are differences between media payers and pug-ins, which are covered in the foowing discussion, as we as in more depth in Chapter 11. A media payer is typicay a stand-aone piece of software. It can be run by itsef, without having a Web browser activated. Most payers contain a ibrary function that enabes them to ist a variety of content that can be payed by a viewer. This ist can incude content resident on the oca device (e.g., hard drive of the PC) and content avaiabe from the Internet. Most media payers can access the Internet to ocate and pay fies from a variety of sources. In contrast, a browser pug-in is ony active when a Web page is deivering mutimedia content, and there is no easy way to use the pug-in to pay content that is not part of a Web page. Most media payers offer a significant amount of viewer contro over content dispay. The video window can often be expanded or contracted. When an audio-ony fie is being payed, some payers offer visuaization graphics that change shape in response to the sounds being payed. A variety of skins can be chosen to change the appearance of the contros and the frame that surround the viewing window. This contrasts with the very imited contro given to viewers by most Web pages typicay just pause, rewind, and fast-forward (if enough of the cip has been buffered). Digita rights management is a key part of most media payers that is used to ensure that the rues and imitations defined by content owners are obeyed. Another important function is copy protection, which prevents unauthorized copies of media fies from being made. Both of these technoogies are typicay buit into a media payer, as otherwise it woud be difficut to get content owners to agree to aow their content to be payed by that brand of payer. Browser pug-ins are typicay not as sophisticated; they rey on the functions of browsers to manage Web pages and media streams reiaby. It is aso interesting to note that many commercia media payers have different versions of their software, some of which can be downoaded at no charge and other versions that require purchase. The purchased versions typicay offer greater functionaity, such as support for fu-screen video dispay or more advanced video compression techniques. Some media payers offer subscriptions to specia ibraries of content as we as user customizabe programs. Reaity Check The first Reaity Check of this chapter takes a ook at two modifications to the architectures that have been used successfuy for providing IPTV services. The second Reaity Check discusses aspects of the IPTV business that a prospective providers shoud consider before aunching a project. The third Reaity Check discusses a very simpe Internet video deivery system that offers a minimum eve of functionaity.

89 64 IPTV and Internet Video Aternative Architectures Systems with architectures simiar to the IPTV network described in this chapter have been impemented at numerous arge teephone companies around the gobe. However, one of the great benefits of IPTV is that it does not need to be tied to a specific architecture. Here are some aternatives that have been used successfuy by IPTV providers. Shared Super Head End There are an amazing number of sma and geographicay dispersed teephone service providers who coud offer IPTV services if they were abe to get access to programming. The costs woud be very substantia if each one of these companies needed to create a SHE with mutipe sateite receivers, content processors, encryption units, and subscriber management systems and if they had to negotiate contracts with a arge bouquet of content providers. Instead, some services have sprung up to fi this need by offering a prepackaged set of programming distributed from a centra ocation. Avai Media is one exampe of an IPTV programming source that has stepped in to fi this need as a whoesae provider of managed content aggregation services through an integrated head-end infrastructure. Today, the company provides an end-to-end video soution to 118 service providers across the United States, the Caribbean, and the isand of Guam, handing everything from transport rights to subscriber usage tracking to marketing support. Avai Media s business mode is to provide a turnkey approach to simpify video depoyment, aowing service providers to focus on subscriber-facing activities and the commercia aunch of services. The company has acquired a content ibrary with transport rights from programmers such as ABC-Disney, Turner, NBC Universa, MTV Networks, and Fox Cabe Networks. They aso have Hoywood movie studio VOD rights, as we as niche, ethnic, and internationa content providers. The ineups of 300þ ive SD and HD inear teevision channes are a encoded in MPEG-4, IP-encapsuated, encrypted, and transported via three sateites for reception directy at centra offices via an IPTV gateway. The IPTV gateway consists of sateite dishes and receivers; IP switching; a Management and Contro System (MCS), which supports services such as aternate feed contro for ive regiona sporting events (i.e., backout management); and a fuy redundant RF switch that feeds sateite receivers. After demoduation in the sateite receivers, content is transmitted to the Feed Contro Manager (FCM), which provides monitoring of content streams, does transport stream mutipexing and scrambing, and provides an interface to conditiona access systems. Encryption middeware and an MPEG-4 STB are required for the receipt of Avai Media-encoded content. Once this equipment is in pace, the oca teco needs to negotiate a contract and insta hardware to get content from any oca teevision stations and add those signas to their IPTV channe ineup. The shared SHE vasty simpifies and reduces the cost process of instaing an IPTV system for a smaer teephone company.

90 Network Overviews 65 Aternative Circuit Technoogy Not a IPTV services need to be deivered over DSL circuits, athough they are certainy the predominant technoogy. For green-fied instaations, namey those where a arge group of housing is being buit in a singe deveopment, even DSL-oriented companies such as AT&T use Fiber to the Home (FTTH) technoogy to deiver voice, video, and data services over an IP infrastructure. Simiary, it is becoming more common to deiver IPTV services over a cabe TV broadband system or a wireess IP system, provided that a suitabe return path is instaed. Business Chaenges Severa key chaenges need to be overcome to create an IPTV system that wi be accepted by viewers and profitabe for the operator. Return on Investment One of the biggest chaenges is to design an IPTV system that can be instaed economicay in enough viewers homes to generate a decent return on investment. A huge amount of hardware and software must be purchased to buid the content coection and processing offices. These costs don t vary much whether the system needs to serve 100 or 100,000 viewers, and the costs need to be spread over a arge number of subscribers to make the business modes work. In addition, there is a significant cost per user in terms of the devices that must be instaed in each home and the costs of the transmission equipment required to distribute the signas. Whie these atter costs vary with the number of subscribers, the tota costs for the system can sti be fairy high. Reaching Existing Homes Another significant chaenge is instaing an IPTV system in an existing neighborhood. Economica ways must be found to reuse existing infrastructure (such as subscriber oops). Aso, construction costs need to be watched carefuy, as not a homes that have access to IPTV networks wi actuay purchase the services. Contrast this with the situation in newy buit deveopments, where fiber optic connections can be made directy to each house for not much more of an investment than needed to insta standard metaic subscriber oops. Loca Permissions One chaenge that cannot be overooked is the need to get permission (often in the form of a renewabe franchise) from the oca government authorities to insta and operate a system. Many communities have powerfu vested interests in the form of existing video deivery services, such as cabe TV or OTA broadcasters. Whie many governments favor having competitive network suppiers, the practicaities

91 66 IPTV and Internet Video of encouraging new providers to insta or upgrade their networks whie at the same time maintaining fairness to incumbent providers can be difficut to baance. The Low End of Internet Video It s important to remember that Internet video systems come in many different sizes. In fact, it is instructive to ook at a minima system just to see how simpy it can be done. Of course, with this system, performance wi aso be minima, with perhaps a imit of a handfu of viewers active at any one time. However, for some appications, that is a that is reay needed. Here is what a basic system coud consist of: A stand-aone PC or server with a reasonabe amount of processing power and a highperformance network interface card. A basic Web server package to provide the user Web pages. Content preparation software, which coud be as simpe as the video-editing functions buit into PC operating systems. A video streaming server package, which is avaiabe for ow cost from severa different sources. A broadband network connection. Of a the aforementioned expenses, probaby the most expensive one on a ongterm basis is the network connection. A of the other equipment and software can be purchased for ess than $1000. Summary This chapter discussed the basic architecture of both IPTV and Internet video systems. The first section of the chapter focused on IPTV and went through the primary system hardware eements, incuding the SHE, VSO, and CO/RT. It aso discussed some of the software functions that make up an IPTV system. The second section of this chapter described the key eements of an Internet video system. It covered the basic hardware, incuding content preparation, Web server, video server, streaming server, and cient PC. It aso discussed software eements, incuding the Web site, streaming engine, Web browser, and media payer. In many rea depoyments, some of the aforementioned systems wi be combined with others, but the functions must sti be performed. Athough the tasks may be accompished in different ocations or packages, each of them is essentia to the end-to-end fow of video to viewers.

92 5 IP The Internet Protoco The Internet is not just one thing, it s a coection of things of numerous communications networks that a speak the same digita anguage. Jim Cark IP is the most successfu computer networking technoogy ever invented. A recent count shows more than 570 miion host computers connect directy to the Internet. 1 Every new desktop or aptop computer produced today comes equipped with a networking connection that supports IP. After reading the basic descriptions of IP networking in this chapter, our discussions about IP video wi be much easier to understand. This chapter discusses the basics of IP transport, expains the concept of a packet, and shows how IP fits into the overa scheme of data communications. It then covers unicasting and muticasting, two key concepts in video networking. The Corner Office View The remarkabe socia impact and the economic success of the Internet are in many ways directy attributabe to the architectura characteristics that were part of its design. The Internet was designed with no gatekeepers over new content or services. The Internet is based on a ayered, end-to-end mode that aows peope at each eve of the network to innovate free of any centra contro. By pacing inteigence at the edges rather than contro in the midde of the network, the Internet has created a patform for innovation. This has ed to an exposion of offerings from VoIP to x Wi-Fi to bogging that might never have evoved had centra contro of the network been required by design. Vinton Cerf, Chief Internet Evangeist, Googe Inc., and coinventor of TCP/IP 2 A Simpe Anaogy To understand the principe of the Internet Protoco, a simpe anaogy may be appropriate. In some respects, an IP address is ike a teephone number. If you know someone s teephone number, there is a pretty good chance you can pick up your 1 From Internet Systems Consortium, Inc., This number doesn t incude the miions of computers that are connected within private networks and share an Internet connection. 2 Vinton Cerf, etter to U.S. House of Representatives Committee on Energy and Commerce, November 8, 2005, googebog.bogspot.com/2005/11/vint-cerf-speaks-out-on-net-neutraity.htm

93 68 IPTV and Internet Video phone and ca him or her. It doesn t matter what country the person is in, as ong as you dia correcty (adding country code when required), and it doesn t matter what kind of technoogy that person is using mobie phone, cordess phone, fixed rotary, or tone-diaed phone. Severa different network voice technoogies may be used to compete the circuit, incuding copper cabe, fiber optics, microwave inks, sateite inks, and other wireess technoogies. No matter how convouted the route, the ca goes through. For data networks, an IP address provides the same function as a teephone number: it is a mechanism used to uniquey identify different computers and to enabe them to contact each other and exchange data over a huge variety of different network technoogies. Stretching the anaogy a bit further, simpy knowing someone s teephone number doesn t mean you re going to be abe to communicate with him or her. A ca might be paced when nobody is there to answer the phone. The phone might be engaged in another ca and not avaiabe. The ca might go through just fine, but if both speakers don t use a common anguage, communication won t occur. The same is true with IP networking simpy knowing another computer s IP address doesn t mean that two appications running on two different machines can communicate with each other. Of course, it is important to remember that IP networking and teephony are two very different technoogies. Teephony is connection oriented, meaning that a circuit must be estabished between the sender and the receiver of information before communication takes pace (such as a voice conversation or a fax transmission). In a ca, a the information fows over the same path. IP, however, is connectioness, meaning that the information (such as data, voice, or video) is broken up into specific IP subunits, caed packets, prior to transmission. Each packet is free to take any avaiabe path from the sender to the receiver. What Is a Packet? An IP packet is a unique container for data. It consists of a string of data bytes that has a defined format, incuding a header and a bock of information bytes. Each packet can be a different ength (within imits). The header of each packet contains information about the packet. Most important is the destination address, which is the IP address of the destination for the packet. The header aso incudes the IP address of the source of data so that two-way communication can be easiy estabished between two devices. This aso enabes packets from different sources going to different destinations to share a singe communications ink. Devices at either end of the ink (caed routers) can sort the packets out and deiver them to different destinations based on the IP addresses in each packet s header. The biggest strength of an IP network is that many different packets, a containing data from different appications, can share a singe packet transport ink. This permits the tremendous fexibiity of an IP network once a device does the hard work of converting a particuar data stream into packets, the rest is easy because

94 IP The Internet Protoco 69 the IP network wi take care of deivering the packets to their destination. Once they are deivered, it is again the responsibiity of an appication to take data out of the packets and put data to work. This isn t a trivia process the receiving appication must dea with any IP network deivery errors. How IP Fits In IP provides a very usefu mechanism to enabe communications between computers. IP provides a uniform addressing scheme so that computers on one network can communicate with computers on a distant network. IP aso provides a set of functions that make it easy for different types of appications (such as e-mai, Web browsing, or video streaming) to work in parae on a singe computer. Pus, IP enabes different types of computers (mainframes, PCs, Macs, Linux machines, etc.) to communicate with each other. IP is very fexibe because it is not tied to a specific physica communication method. IP inks have been successfuy estabished over a variety of different physica inks. The most popuar technoogy for IP transport is Ethernet, which is often used for oca area networking. Many other technoogies can support IP, incuding dia-up modems, wireess inks (such as Wi-Fi), DSL, SONET, and ATM teecom inks. IP wi even work across connections where severa network technoogies are combined, such as a wireess home access ink that connects to a cabe TV system offering cabe modem services or a DSL ine, which in turn sends customer data to the Internet by means of a fiber optic backbone. This adaptabiity is one of the things that makes IP so widespread. IP doesn t do everything. It depends on other software and hardware, and other software in turn depends on it. IP fits between the function of data transport performed by physica networks and the software appications that use IP to communicate with appications running on other devices. Figure 5.1 shows how IP fits between appications on the top of the networking hierarchy and physica communications on the bottom. IP is not a user appication or an appication protoco. However, many user appications empoy IP to accompish their tasks, such as sending e-mai, browsing the Web, or paying a video. These appications use protocos such as the HyperText Transfer Protoco or Simpe Mai Transfer Protoco for necessary services within the IP framework. For exampe, one of the services provided by HTTP is a uniform method for giving the ocation of resources on the Internet, which goes by the abbreviation URL. Internet Protoco by itsef is not even a reiabe means of communications; it does not provide a mechanism to resend data that might be ost or corrupted in transmission. Other protocos that empoy IP are responsibe for that. Using the teephone anaogy again, IP can connect the teephone ca, but it doesn t contro what happens if, for exampe, the person being caed isn t home or if the ca gets interrupted before the parties are finished taking. Those occurrences are the responsibiity of the protocos that use IP for communication.

95 70 IPTV and Internet Video Functions and Exampes User Appications Appication Protocos Transport Protocos Functions: Act on user commands, provide user interface Exampes: Mozia Firefox, Outook, Windows Media Payer, QuickTime Functions: Provide services to user appications Exampes: HTTP - HyperText Transfer Protoco, SMTP - Simpe Mai Transfer Protoco Functions: Format data into datagrams, hande transmission errors Exampes: TCP - Transmission Contro Protoco, UDP - User Datagram Protoco IP: Internet Protoco Functions: Suppy network addresses, send/receive datagrams Data Link Services Physica Networks Functions: Send packets over physica networks Exampes: Ethernet, Token Ring, Packet over ATM/SONET Functions: Data transmitters and receivers, wires, optica fibers Exampes: 10BaseT UTP, Wi-Fi, SONET, DSL Figure 5.1 How IP fits between other ayers of networking protocos. Types of IP Networks Many different types of physica networks can be used to transport IP video. This section reviews some of the most popuar ones and describes where they are commony used. Ethernet Ethernet is the most widespread data communications network in the word. Ethernet is used in oca area networks to connect computers, printers, servers, IP routers, and many other types of devices. There are three commony used speeds for Ethernet connections: 10 Mbps, 100 Mbps, and 1 Gbps. The first two technoogies are often caed 10baseT and 100baseT, respectivey, and the fastest of the three is often caed GigE. 10GigE inks that operate at 10 Gbps are used inside providers networks and in backbones for the Internet and corporate networks; they are not commony used for connections to end-user workstations. Ethernet is a Loca Area Network (LAN) technoogy. This means that it is not suitabe for use in Wide Area Networks (WANs) or Metropoitan Area Networks (MANs). The reasons for this are that Ethernet has some fairy short distance imitations (2000 meters in many instances) for timing reasons. Basic Ethernet cabing usuay consists of specia twisted pairs of conductors caed CAT5 or CAT6, depending on the speed rating (the higher number rating is capabe of faster speed). An Ethernet network can aso be impemented over optica fibers; this is reasonaby common for GigE inks and very common for 10GigE inks. Ethernet networks are abundant in modern office settings and are often used in home networks. Many networks that were originay set up to share a printer with

96 IP The Internet Protoco 71 a sma group of PCs have expanded to cover hundreds of devices throughout a buiding. These networks wi often contain a variety of servers and network interfaces, incuding Internet connections. Many home Ethernet networks were originay instaed for the soe purpose of enabing mutipe PCs to share a singe high-speed network connection. Wireess Ethernet Wireess Ethernet is becoming very popuar for many appications, incuding connections to aptops and other portabe devices. A coupe of popuar names for this technoogy are (the number of the IEEE standard) and Wi-Fi. Most Wi-Fi networks are configured with a fixed centra access point (AP) that provides a common node for a the portabe devices. Typicay, the AP provides a connection to a high-speed network that supports Internet access or access to a corporate network. Wireess transmissions can be affected by a number of different factors in the oca environment, and data transmission speeds can change rapidy. As a resut, systems wi use automatic packet retransmission to ensure that data get deivered. Unfortunatey, this can cause the data transmission speed to fuctuate rapidy and without warning. This can make it extremey difficut to reiaby send ive video streams. Appications using fie transfer or downoad and pay technoogies over wireess connections wi fare better, athough their performance may be inconsistent. Wi-Fi is used inside many homes for connecting PCs to each other, printers, and the Internet. The main advantages are portabiity and eimination of the need to string cabes to every ocation in the home where a PC is going to be used. Wi-Fi hot spots (ocations where one or more APs are ocated) are very common in pubic areas such as coffee shops, hotes, and airports. Wi-Fi is not used often for professiona video networks because of the imited bandwidth and the highy variabe deay. Another wireess technoogy, Wi-Max or IEEE , has been standardized, but not yet widey depoyed in the United States. Simiar to Wi-Fi, this service uses icensed radio spectrum to deiver data from an access point to nodes ocated within a range of severa mies. This service is particuary attractive for mobie appications (it is sometimes referred to as fourth-generation [4G] mobie technoogy); however, the cost-effectiveness of using Wi-Max for IPTV deivery is questionabe. Cabe Modems Many cabe TV companies provide a variety of services to customers with the goa of capturing a arger portion of their customers monthy teecommunications expenses. As a resut, many customers have been extremey peased with these reiabe high-speed services offerings. Cabe modems work by taking digita data signas and converting them into high-frequency signas that fow over cabe TV cabing in pace of some of the

97 72 IPTV and Internet Video teevision content. The reevant standards for these signas are caed DOCSIS, for Data Over Cabe Service Interface Specification, deveoped by a consortium ed by CabeLabs. Because data services are bidirectiona, transmission must take pace in both directions on the cabe TV system. Cabe modem termination system (CMTS) sheves are ocated at the cabe TV head end. These provide high-speed data connectivity to hundreds or thousands of cabe TV subscribers. The output of the CMTS system is one or more RF signas that are combined with norma video signas distributed to a of the viewers in an area. At each broadband user s home, a cabe modem is instaed that tunes to the required frequency and seects data addressed to that user s home. Data packets are converted into standard Ethernet format and deivered to the user s PC or other device (such as a home router or Wi-Fi access point). On the return trip, the cabe modem accepts data from the end-user device and transmits it back to the CMTS by way of an RF channe on the cabe TV return path. Cabe modems are quite popuar in the United States, with over 35 miion residentia subscribers. 3 IPTV services can be deivered over cabe modems. However, because cabe TV systems aready have a video deivery system, they are not often used for IPTV, except for VOD services. Internet video services are frequenty deivered over cabe modems. Outside the United States, cabe modems are ess popuar but are sti used for a significant number of broadband househods. Digita Subscriber Lines Digita Subscriber Lines (DSL) provide broadband data services over ong twisted pair cabes. They were deveoped to enabe companies with teephone ines instaed to customer homes to offer high-speed Internet connections without having to insta a whoe new network. Sophisticated techniques are required to get high-speed digita data to move reiaby over cabes that were designed just to hande ow-frequency voice signas. There are trade-offs between speed and distance onger distances aow more subscribers to be served from a singe office, but at ower speeds. Specia technoogies have been deveoped to moduate data onto the twisted pairs and to cance any echoes that may occur during transmission. This technoogy requires advanced digita signa processing, with very high-performance chipsets that are undergoing constant improvement. DSL ines are popuar in the United States with over 27 miion residentia customers. 3 DSL is used primariy in networks that aready have twisted-pair networks instaed. It makes itte sense to use DSL technoogy in new construction areas, as there is not a tremendous cost premium for instaing fiber optic systems in a competey new network buid. Even major proponents of DSL, such as AT&T, typicay insta fiber in new housing deveopments. 4 3 FCC press reease, January 16, From a presentation at IBC on September 9, 2006, entited AT&T U-verse TV by Pau Whitehead of AT&T.

98 IP The Internet Protoco 73 Fiber Optic IP Networks Optica fibers have a number of advantages for high-speed data transport, and these benefits certainy appy to IP networks. These advantages incude an extremey high data-carrying capacity, 5 isoation from outside interference, ong transmission distances (incuding undersea cabes), and ow cost per kiometer. IP packets can be sent over optica fibers in a number of different ways. One popuar method invoves sending GigE and 10GigE signas directy over fiber. Another method invoves mapping packets into SONET/SDH-compiant signas and transmitting those over an optica network. A third method invoves sending IP packets over fibers in a format designed for fiber to the home transmission. Both IPTV and Internet video signas can be transmitted over optica fiber, and at some point, essentiay a streams do pass over fiber between video sources and viewers. Fiber is often used for distributing broadcast teevision content on a nationa and internationa eve, and it is virtuay aways used for ong-distance Internet transport. Fiber is normay used to distribute content from VSOs to DSLAMs. Fiber-to-home systems often use IPTV technoogy to deiver VOD and other video services to individua subscribers. Internet Protoco Addresses IP addresses are easy to recognize due to their specia dotted decima format. IP addresses consist of a series of four numbers separated by periods (or dots). A dotted decima number represents a 32-bit number, which is broken up into four 8-bit numbers. For exampe, is the IP address for Most foks who have configured their own home network or aptop connection have probaby seen information in this form. Of course, being human, we have a hard time remembering and typing a of those digits correcty (even when writing a book). So, the Domain Name System (DNS) was invented to make ife easier. DNS provides a transation service for Web browsers and other software appications that takes easy-to-remember domain names (such as esevier.com ) and transates them into IP addresses (such as ). IP addresses are key to the operation of an IP network. They form the unique identification that each device must have to be abe to send and receive packets. On any network, each device must have a unique address; otherwise the network woudn t be abe to deiver packets propery. Private networks that contain severa devices and one Internet connection can use private IP addresses inside the network whie sharing a singe pubic IP address for access to the Internet. 5 Nippon Teegraph and Teephone Corporation reported a speed of 14 terabits per second on a singe fiber in a September 29, 2006 press reease ( This is equivaent to 14,000 gigabit Ethernet inks on a singe fiber.

99 74 IPTV and Internet Video Key Parts of an IP Network Many different types of equipment can be used to construct an IP network. Because purchasing, instaing, and operating these devices can represent a arge portion of the cost of an IPTV or Internet video system, it makes sense to describe some of the key system eements. Ethernet hubs and switches are used to physicay move data packets from one device to another inside a physica ocation. Hubs have essentiay no packet processing inteigence they simpy take any packets that come in on one port and transmit them out a the other ports of the hub. Switches are more inteigent they can determine where each packet is going and send each packet out on the proper port. Switches are invauabe for connecting the hundreds of IP devices found in even a medium-sized corporation. Switches have a imited scope, however they ony pay attention to directy connected devices. Switches do not have the abiity to ook at a packet and figure out that in order to get to destination Z the packet needs to be sent first to devices X and Y. That is the function of an IP router. IP routers are the workhorses of an IP network. They are essentia for deivering packets across a arge network because they are abe to figure out a route for each packet. These routes can trave great distances through mutipe devices over many different kinds of physica networks, such as wireess, fiber optic, twisted pair, and DSL inks. It is not uncommon for a router to manage severa thousand different packet routes, even though it may ony be connected to a few dozen other devices. As a resut of their fexibiity and inteigence, IP routers can be quite expensive, particuary ones that can hande arge bandwidth oads found in video networks. Web and data servers provide a wide variety of data sources for a broad spectrum of purposes. These servers need to support the IP protoco to operate on the Internet and the Word Wide Web. Typicay, these units are set up to respond to transactions that have been initiated by cient devices, such as user PCs. Cient devices cover a wide range of different technoogies, form factors, and uses. They can range from desktop PCs of many different vintages and capacities to an array of portabe or handhed units and even set top boxes. These units are typicay set up to run appications that users can invoke to accompish specific tasks. In a typica transaction over an IP network, a user at a PC types in a command to do something, such as read an e-mai or news artice. This is accompished by means of an appication running on that user s device, such as an e-mai appication or a Web browser appication. These appications provide the user interface that appears on the user device, incuding images on the device dispay and a mechanism for the user to point and cick or type an instruction. When the user s command is competed, the appication software wi typicay create a command output by sending data through a protoco such as HTTP. Referring to Figure 5.2, this process can be visuaized as a downward movement through the different protoco ayers. The command created by HTTP is then passed on to a transport protoco such as TCP, where it is given addressing information and formatted into packets for handing by IP. The IP ayer takes the packets and makes them suitabe for transport over the actua data network such as Ethernet.

100 IP The Internet Protoco 75 User Appications Appication Protocos Functions: Act on user commands, provide user interface Exampes: Mozia Firefox, Outook Express, Windows Media Payer, QuickTime Functions: Provide services to user appications Exampes: HTTP - HyperText Transfer Protoco, SMTP - Simpe Mai Transfer Protoco TCP UDP RTP Functions: Format data into datagrams, hande transmission errors Exampes: TCP - Transmission Contro Protoco, UDP - User Datagram Protoco, RTP - Rea-time Transport Protoco IP: Internet Protoco Functions: Suppy network addresses, send/receive datagrams Data Link Services Physica Networks Functions: Send packets over physica networks Exampes: Ethernet, Token Ring, Packet over ATM/SONET Functions: Data transmitters and receivers, wires, optica fibers Exampes: 10BaseT UTP, Wi-Fi, SONET, DSL Figure 5.2 Transport protoco hierarchy. Ethernet is then responsibe for actuay transmitting the packet data over a physica cabe to another machine, where the process is reversed, that is, data are passed back up through the protoco stack on the receiving device. Eventuay, data from the user are deivered to an appication on the receiving machine. At this point, the user s request can be responded to either automaticay (as in the case of a Web server) or manuay (as in the case of an e-mai). When the response is ready, the process is reversed. In the responding machine, data are passed down through the various protoco ayers and onto the physica connection back to the user s machine. The response is then passed back to the user s appication, and the transaction is competed. The rea beauty of this way of handing messages is that each protoco ayer has we-defined, specific responsibiities. This aso makes it possibe for one ayer to change without having to rework a of the other software. Consider the introduction of wireess networking over the past 10 years. Whie it is true that various operating systems (such as Windows or Mac OS) had to be rewritten to accommodate these changes, most user appications (such as Microsoft Outook or Adobe Acrobat) did not. Simiary, new versions of appications can be reeased without having to change the basic underying protocos. Transport Protocos Transport protocos are used to contro the transmission of data packets in conjunction with IP. We discuss three major protocos commony used in transporting rea-time video.

101 76 IPTV and Internet Video User Datagram Protoco (UDP) is one of the simpest and eariest of the IP protocos. UDP is often used for video and other very time-sensitive data. In UDP, the originating device can contro how rapidy data from a stream wi fow across the network. In other protocos (such as TCP, covered next), the network can drasticay affect how data transfer works. For video and other rea-time streams, UDP is a ogica choice for the transport protoco, as it does not add unneeded overhead to streams that aready have buit-in error correction functions. Because UDP does not require two-way communication, it can operate on one-way networks (such as sateite broadcasts). In addition, UDP can be used in muticasting appications where one source feeds mutipe destinations such as IPTV networks. Transmission Contro Protoco (TCP) is a we-estabished Internet protoco widey used for data transport. The vast majority of the devices that connect to the Internet are capabe of supporting TCP over IP (or simpy TCP/IP). TCP requires that a connection be set up between the data sender and the data receiver before any data transmission can take pace. One of the essentia features of TCP is its abiity to hande transmission errors, particuary ost packets. TCP counts and keeps track of each byte of data that fows across a connection. The automatic fow contro mechanism wi sow down data transmission speeds when transmission errors occur. If this rate fas beow the minimum rate needed by a video signa, then the video signa receiver wi cease to operate propery. One advantage of TCP for video deivery is that most firewas aow TCP traffic to pass, whereas many firewas bock UDP traffic. Rea-time Transport Protoco (RTP or Rea time Protoco, if you prefer) is intended for rea-time mutimedia appications, such as voice and video over the Internet. RTP was specificay designed to carry signas where time is of the essence. For exampe, in many rea-time signas such as video, if the packet deivery rate fas beow a critica threshod, it becomes impossibe to form a usefu output signa at the receiver. For these signas, packet oss is better toerated than ate deivery. RTP was created for these kinds of signas to provide a set of functions usefu for rea-time video and audio transport over the Internet. Overa, RTP adds a ot of functionaity on top of UDP without adding a ot of the unwanted functions of TCP. RTP aso supports muticasting, which can be a much more efficient way to transport video over a network, as discussed in the next section. In the networking hierarchy, a three protocos are considered to operate above the IP protoco because they rey on IP s datagram transport services to actuay move data to another computer. Figure 5.2 shows how UDP, TCP, and RTP fit into the networking hierarchy. Note that RTP actuay uses some of the functions of UDP; it operates on top of UDP. Muticasting Muticasting is a key concept for IP networking. However, there are two very different meanings of the word that can appy to the fied of IPTV: In over-the-air digita teevision broadcasting, muticasting means deivering mutipe video programs simutaneousy over a singe DTV broadcast channe. In IP networking, muticasting means deivering a singe stream to mutipe viewers simutaneousy.

102 IP The Internet Protoco 77 Broadcast muticasting became feasibe with the advent of terrestria digita teevision. Within a standard digita channe (19.38 Mbps in the United States) it is possibe to have mutipe video channes, each occupying a portion of the tota bandwidth. For exampe, ION Media Networks has more than 50 digita broadcast stations across the United States each one capabe of deivering at east four different SD programs simutaneousy using DTV muticast technoogy. In IP muticasting, a singe video stream is sent simutaneousy to mutipe users. Through the use of specia protocos, copies of the video stream are made inside the network for every recipient. A viewers of the muticast get the same signa at the same time. Most of the IP networking equipment deivered over the past 5 to 10 years is capabe of supporting IP muticasting, but it has been disabed out of fear of an excessive burden on networks. For exampe, IP muticasting is not currenty enabed on the Internet, restricting the use of muticasting for IP video streaming to private networks. However, within IPTV systems, muticasting is a key enabing technoogy and is widey depoyed. Internet Protoco Unicasting To get a better understanding of IP muticasting, it is hepfu to compare it to the process of IP unicasting. In unicasting, each video stream is sent to exacty one recipient. If mutipe recipients want the same video, the source must create a separate unicast stream for each recipient. These streams then fow a the way from the source to each destination over the IP network. Each user who wants to view a video must make a request to the video source. The source needs to know the destination IP address of each user and must create a stream of packets addressed to each user. As the number of simutaneous viewers increases, the oad on the source increases, as it must continuousy create individua packets for each viewer. This can require a significant amount of processing power and aso a network connection big enough to carry a the outbound packets. For exampe, if a video source were equipped to send 20 different users a video stream of 2.5 Mbps, it woud need to have a network connection of at east 50 Mbps. An important benefit of unicasting is that each viewer can get a custom-taiored video stream. This enabes the video source to offer speciaized features such as pause, rewind, and fast-forward video. This is normay practica ony with prerecorded content but can be a popuar feature with users. Unicasting is the norm for Internet video for two reasons. First, because the Internet is not muticast enabed, it is not feasibe to use muticasting. 6 Second, most Internet video viewers expect to be abe to contro video streams (i.e., pause, rewind, fast-forward), which is hard to do with muticast streams. 6 Aternativey, a streaming server or a Content Deivery Network (CDN) coud be used to hande the oad of creating mutipe packet streams.

103 78 IPTV and Internet Video Internet Protoco Muticasting In muticasting, a singe video stream is sent simutaneousy to mutipe users. Through the use of specia protocos, the network is directed to make copies of the video stream for every recipient. This process of copying occurs inside the network rather than at the video source. Copies are made at each point in the network ony where they are needed. Figure 5.3 shows the difference in the way data fow under unicasting and muticasting. In muticasting, the burden of creating streams for each user shifts from the video source to the network. Inside the network, speciaized protocos enabe the network to recognize muticast packets and send them to mutipe destinations. This is accompished by giving the muticast packets specia addresses reserved for muticasting. There is aso a specia protoco for users that enabes them to inform the network that they wish to join the muticast. Keep in mind that muticasts operate in one direction ony, just ike an over-theair broadcast. There is no buit-in data return-path mechanism to coect data from each of the end points and send it back to the source (other than some network performance statistics such as counts of ost packets). This means that any interactivity between the end points and the video source must be handed by some other mechanism. Muticasting in IPTV Muticasting is a key technoogy for IPTV because it enabes a singe source signa to be sent to mutipe destinations. This can enabe hundreds, or even thousands, of viewers to simutaneousy watch a singe teevision broadcast. In an IPTV network (as described in Chapter 4), there are severa points inside the distribution network from the SHE to the viewer where muticasting can be used to great effect. 3 streams from Server Viewer 1 1 stream from Server Viewer 1 Viewer 2 Viewer 2 Repicated by Network Viewer 3 Viewer 3 Figure 5.3 Unicasting Unicasting vs muticasting. Muticasting

104 IP The Internet Protoco 79 From the SHE output, muticasting can be used to take a singe ive stream and distribute it to mutipe VSOs. This saves the expense of constructing a high bandwidth streaming server inside the SHE. This aso greaty reduces the size of the network connection required at the output of the SHE. When it comes to distributing broadcast teevision streams to viewers, muticasting is amost aways used. This technoogy enabes a viewer s STB to connect to a program feed simpy by joining a muticast. However, where this happens is greaty dependent on the capabiities of the DSLAMs. Most current DSLAMs are muticast enabed. When the DSLAMs are not muticast enabed, a unique video stream must be sent for each viewer a the way from the VSO to that viewer s STB. This requires a high bandwidth connection from the VSO to each DSLAM, with enough capacity to hande a of the active viewers simutaneousy. This approach has the advantage of reducing the compexity (and therefore the cost) of the DSLAMs. When the DSLAMs are muticast enabed, the connection between the VSO and the DSLAM can be simpified, with ony one copy of each broadcast channe needing to be sent. Requests to join and eave the muticast are received from STBs and processed inside the DSLAM; copies are made as necessary for each STB. Even though this approach increases the compexity of the DSLAM, it does significanty reduce the amount of bandwidth needed to feed signas from the VSO to each DSLAM. Issues with Muticasting Muticasting is not enabed on a IP networks because there are some noticeabe drawbacks to the technoogy. These incude network resource burdens, management compexity, and unverified fie transfer. Let s expore each of these in more detai. As mentioned in previous sections, one drawback of muticasting is the additiona burden that it paces on the network, primariy routers. Routers are impacted in two main ways processing the overhead packets containing muticast join and eave instructions and processing the ive streams. In most IPTV systems, broadcast channes (such as prime-time network TV) are broadcast using muticast technoogy. Each time a channe change takes pace from one muticast stream to another, severa messages must be processed, incuding instructions to stop deivering one stream and to start deivering a new stream to a user s STB. In addition to this overhead processing, the IP router needs to be abe to make a copy of every singe muticast packet for every destinationservedbythatrouter.insomecases, the copies wi go to another router downstream toward the destination. In other cases, the copies wi go directy to a STB. If a router has to serve hundreds or thousands of STBs, each with a muticast stream, this can require a ot of processing power. Muticast networks can be compicated to manage. In the most popuar muticasting protoco, there is a buit-in mechanism to gather feedback from a of the distant end points. This protoco is designed carefuy to minimize the amount of traffic coming back from the end points, with the trade-off being that each

105 80 IPTV and Internet Video end point reports ess often as their number goes up. This can make it difficut to determine when ony a few end points are having difficuty with a particuar stream. Bit-for-bit fie copying using acknowedgments is not compatibe with muticasting. Normay, when perfection is demanded (say in a miion-doar financia transaction), the end points are designed to handshake with each other after each bock of data is deivered successfuy. Any mistakes require resending the damaged or missing packets. This is impractica for a muticast, as it is unikey that a end points woud aways experience the same errors at the same time. Accordingy, other protocos (such as TCP) shoud be used to transmit data when errors must be totay excuded. Reaity Check This chapter s Reaity Check takes a ook at the immense growth of broadband services that has taken pace over the past decade. Whie the growth rates have sowed in some countries as penetrations increase, miions of broadband ines are sti being instaed each month around the word. A of these ines service potentia customers for IPTV and Internet video. Broadband Network Growth For IPTV and Internet video to operate with any eve of user satisfaction, a broadband network connection is essentia. Whie it is technicay possibe for a dia-up user to view a video signa, the ong deays needed to downoad even a short cip at very ow resoution make dia-up impractica. So in order to get a fee for the market for IPTV and Internet video, we must restrict our focus to broadband users. A good working definition of a broadband connection is one that offers more than 256 kbps of throughput. This is adequate for ow-resoution, ow-frame rate video in rea time. It may aso be enough for a user to downoad a short video cip from a Web site in a reasonabe amount of time. This kind of speed simpy cannot be achieved with a dia-up modem operating over an anaog voice ine. There are many different ways to ook at broadband network statistics. One way that makes sense is to ook at the wordwide depoyment of broadband inks, as this comprises the tota avaiabe market for IPTV and Internet video services. Figure 5.4, based on data from Point Topic, shows the wordwide-instaed base of broadband circuits in from June 2005 to December 2007 for three different technoogies: DSL, cabe modem, and fiber to the node/fiber to the home ( other on the diagram). Expansion of this market has been quite rapid, growing from a tota of 79.7 miion ines at the end of Q2, 2003, to at the end of Q2, This amounts to a cumuative growth rate of just over 35% per year. Interestingy, there is sti a great dea of room for future growth: compare this to the biion fixed ine

106 IP The Internet Protoco 81 70,000,000 U.S. Broadband Househods by Technoogy 60,000,000 Other DSL Cabe 50,000,000 40,000,000 30,000,000 20,000,000 10,000,000 0 Jun 2005 Dec 2005 Jun 2006 Dec 2006 Jun 2007 Dec 2007 Figure 5.4 Wordwide broadband technoogy from 2005 to teephones in use and to the biion mobie/ceuar phones in use around the word in and it is easy to see the continued growth potentia for broadband services. Summary Internet Protoco has changed the word of data communications and impacts the physica word around us more a the time. As teecommuting, videoconferencing, and an increasing array of socia networking and onine video appications reduce the need for trave for communication s sake, aternative work schedues and ifestyes have opened up. As the Internet continues to grow, most peope wi be abe to earn about whatever they want from the comfort of their own homes. More and more devices are becoming IP enabed, from ce phones to refrigerators, and they wi a end up connected somehow, over networks that are becoming IP-centric. The opportunities created wi be enormous due to what IP heps make happen. This chapter began with a basic discussion of the properties of IP and ooked at some of the roes that IP pays in the hierarchy of data communications. It then described some popuar types of devices that support IP communication and CIA Factbook

107 82 IPTV and Internet Video examined some of the higher eve protocos, such as TCP and RTP, that use IP to transmit Web pages and video. This was foowed by a ook at muticasting, which is one of the key enabing technoogies for IPTV. The Reaity Check showed how arge the market has become for broadband services and how much room exists for future growth. It s amazing to consider that essentiay every broadband subscriber is a potentia customer for IPTV or Internet video.

108 6 Video Compression Once you get past a few hundred kiobits-per-second, it s possibe to deiver pretty good quaity video and sound. Vinton Cerf Video signas used to deiver IPTV and Internet video are aways compressed. Compression means reducing the number of bits required to represent the video image. This is an important topic because choosing a suitabe compression method can sometimes mean the difference between the success and faiure of a video networking project. This chapter begins by expaining the reasons for compression and ooks at some of the factors that determine what form of compression is suitabe for an appication. Then, it examines MPEG video compression, as it is the most widey used technoogy for video and audio compression. After that, the chapter ooks at some of the other compression systems avaiabe for use with video and audio signas. The chapter concudes with a brief discussion regarding some of the icenses needed to use various forms of compression technoogy. The Corner Office View [itvt]: What directions do you see [compression] heading in the near future? Cooney: It s not difficut to see where it s going. Yesterday s compression technoogy was MPEG-2; tomorrow s compression technoogy is one of two options: MPEG-4 or Microsoft s VC-1. Both of those technoogies, by about a factor of two, outperform MPEG-2. So, haf the bit rate, doube the channes however you ike to ook at it. [itvt]: Is the cabe industry eager to switch to the more advanced codecs? Cooney: If you re a teco that s getting into the IPTV space and that has no instaed base of set-top boxes, and you re asking yoursef, How do we impement the next generation of compression, the answer is easy: if you re making technoogy decisions today, you might as we pay for the best technoogy avaiabe, which in the case of compression is MPEG-4 and VC-1. Actuay, as it happens, if you re a teco, you re going to need to use those codecs anyway, as MPEG-2 isn t good enough to get video through your reativey sma pipes. So for tecos, there s reay no decision to make: they have to

109 84 IPTV and Internet Video use next-generation compression. But for the other operators, both cabe and sateite, there are definitey decisions to make, and commercia impications are the drivers of those decisions. Eric Cooney, president and CEO, Tandberg Teevision, as interviewed by Tracy Swedow of itvt 1 Why Compress? Video compression as a subject matter may seem reay du, but the rea-word benefits of using the atest technoogy can radicay increase the versatiity of your IP network. Put simpy, better compression means greater fexibiity the more efficienty data are handed, the more choices you have with your existing resources. An existing network can support more cameras, better audio video quaity, or both. 2 Many communication systems that have become commonpace over the past decade depend on compression technoogy. For exampe, MP3 payers use compression to take fies from audio CDs and make them sma enough to fit into the memory of a portabe payer. Compression fits a two-hour movie onto a four-inch DVD or Bu-Ray disc. Cabe TV, oca teevision broadcasters, and sateite teevision systems can now use compression to pace mutipe digita video channes into the space formery occupied by a singe anaog video channe, aowing hundreds of video channes to be distributed economicay to viewers. Here are some of the main reasons why compression is used for IPTV and Internet video systems. Compressed streams can be transmitted over ower bit rate networks than uncompressed streams. For Internet video appications in particuar, this can mean the difference between getting the stream to a user or not. For exampe, any home user who has an Internet connection based on oder technoogy may not be abe to receive data above the range of 1.5 Mbps. Uness a digita video stream is substantiay compressed, it wi not fit into this bandwidth. More compressed streams can fit into a given bandwidth. This is particuary important for IPTV systems that have a fixed upper imit on bandwidth for a given distance. For exampe, ADLS2þ has a imit of just over 10 Mbps at a distance of 9000 ft (2750 m). With norma compression techniques, 10 Mbps has enough bandwidth for two to four SD video signas, or one HD and some SD videos. As compression technoogy advances, more signas can be squeezed into the same amount of bandwidth. Raw, uncompressed HD video signas occupy 1.5 Gbps of bandwidth, which is roughy 1000 times the capacity of a standard ADSL ink. Without compression, there woud be no way to deiver HD video to a viewer over any of the norma IPTV, sateite, or cabe TV networks. 1 Interactive TV Today bog, August 31, 2005, bog.itvt.com/my_webog/2005/08/eric_cooney_pre.htm 2

110 Video Compression 85 A compressed video or audio fie wi occupy ess space on a disk drive or other storage medium than an origina uncompressed fie. This enabes users either to put more content in a given amount of storage or to use ess storage for each fie. In many rea-word video signas, there is a arge amount of redundancy and underused bandwidth. Often a good portion of each video frame is identica to the frame immediatey before or after it. A good compression technique can use this redundancy to greaty reduce the amount of bandwidth. Of course, there are compromises that must be made in order to achieve these benefits, such as the foowing. Compression introduces deay into a video or audio signa, at both compression and decompression stages. This occurs because most video compression systems need to store severa frames of video in order to extract the differences between adjacent frames of the input signa. Simiary, audio signas are compressed through the use of cacuations based on successive short sound cips. Compression can be difficut on signas that have a ot of noise in them, such as static or other interference. When there is a ot of noise in a video signa, the compression system has difficuty in identifying redundant information between adjacent video frames. Overa, the benefits certainy outweigh the drawbacks, particuary when you consider that IPTV and Internet video providers reay don t have a choice about using compression. Groups of Pictures and Why They Matter Users of any MPEG system wi quicky encounter a variety of frame types, incuding I frames, P frames, and B frames, as we as the term group of pictures (GOP). These terms a describe the way picture data are structured in an MPEG stream or fie. A frame is a singe image from a video sequence. In NTSC, one frame occurs every 33 miiseconds; in PAL, one frame occurs every 40 miiseconds. An I frame is a frame that is compressed soey based on the information contained in the frame; no reference is made to any of the other video frames before or after it. A P frame is a frame that has been compressed using data contained in the frame itsef and data from the cosest preceding I or P frame. A B frame is a frame that has been compressed using data from the cosest preceding I or P frame and the cosest foowing I or P frame. A GOP is a series of frames consisting of a singe I frame and zero or more P and B frames. A GOP aways begins with an I frame and ends with the ast frame before the next I frame. The GOP is usuay a fixed, repetitive pattern that is configured on the compression device. Different content suppiers may use different GOPs for different channes, but they are normay fixed within each channe. To understand why MPEG uses these different frames, et s ook at the amount of data required to represent each frame type. With a video image of norma compexity, a P frame wi take two to three times ess data than an I frame of the same

111 86 IPTV and Internet Video image. A B frame wi take even ess data than a P frame a further reduction by a factor of two to five. Figure 6.1 shows the reative amounts of data for each frame type in a typica MPEG GOP. Impacts of GOP Length One parameter that system providers have a ot of contro over is GOP ength. Choosing the right ength can be quite controversia. Remember that a GOP aways begins with an I frame. To determine the ength of a GOP, simpy count the number of B and P frames between each consecutive I frame and add one for the I frame. For exampe, in the frame sequence shown in Figure 6.1, the GOP ength is 12: one I frame, three P frames, and eight B frames. A GOP is considered short when the GOP ength is ow, say three or five. Some systems use GOPs that are quite ong; vaues of 15, 30, or even 60 have been used in some appications. Seecting a suitabe GOP ength can have a big impact on a video network. Many system performance factors are affected by GOP size, incuding the bit rate of encoded streams, the channe change time, and the abiity of the stream to toerate errors. Let s examine each of these factors in more depth. Bit Rate As Figure 6.1 ceary shows, I frames contain more data than P frames or B frames. With a short GOP ength, the tota number of I frames in the stream is increased, thereby increasing the average amount of data that needs to be transmitted for each frame. This transates into greater bandwidth, which can affect the performance of both IPTV and Internet video services. With onger GOPs, there are fewer I frames per second, so the aggregate data rate drops I B B P B B P B B P Figure 6.1 Reative amounts of data in each MPEG frame type. B B

112 Video Compression 87 Channe Change Timing Whenever channe changing occurs in a video stream, the decoder has to have enough data to accuratey produce a new image sequence. The abiity of the decoder to do so depends on which type of frame it receives first after each channe change. If the decoder receives an I frame first, then everything works smoothy because each I frame contains a data to competey reproduce one frame of video. If the decoder receives a P frame or a B frame first, then it has a probem because these frames ony contain enough data to te the decoder about any changes that have happened since an earier frame. So, what typicay happens after each channe change is that the decoder waits for the first I frame of the new video channe to arrive before it begins to produce an image. With a short GOP of, say, five frames, channe changing isn t much of a probem. In a 30-frame-per-second system (such as those used in the United States), this means that the decoder needs to wait, at most, 166 miiseconds for the first I frame, and that amount of deay is insignificant to viewers. If, however, the GOP is 30 or 60 frames ong, it coud mean that the decoder may need to wait one or two seconds before the first I frame arrives. This can be quite annoying to viewers. Two different approaches have been demonstrated to address this issue. One method uses a server that stores copies that are compressed using ony I-frames of a the videos present on an IPTV network. When a user changes channes, the STB connects momentariy to the server to get a sequence of I frames for the new channe and then rejoins the reguar ong GOP stream once a new I frame is deivered. This approach can deiver very fast change times, but this technique can be difficut to scae to thousands of users a changing channes simutaneousy, as coud occur during a major ive sporting event. Another system actuay makes avaiabe two versions of each stream for use by STBs one with ow resoution and a short GOP and another with norma resoution and a ong GOP. Norma viewing is with the ong GOP, norma resoution stream. When a channe change occurs, the STB connects to the ow-resoution stream and up converts it to a norma size picture. Once the norma stream is ready (i.e., when an I frame arrives), the STB switches back to the norma stream. This atter method has the advantage of not requiring any specia servers or targeted streams to be deivered to each STB, but it does require two versions of each stream to be avaiabe. The ow-resoution streams can aso be used for picture-in-picture appications when they aren t being used for channe changing. Error Toerance One major benefit of an I frame is that it permits the STB to wipe out any memory that it has about previous frames. This contrasts with P and B frames, which require the STB to store a copy of the preceding frames so it can create the new frame propery. Consider what happens if one of the incoming frames in the midde of a GOP has an error. This error can persist in the STB for a whie, unti the next I frame arrives. Once this happens, the error can be ceaned out.

113 88 IPTV and Internet Video Moving Pictures Experts Group The Moving Pictures Experts Group has deveoped some of the most common compression systems for video around the word and, given these standards, the common name of MPEG. Not ony did this group deveop video compression standards, incuding MPEG-1, MPEG-2, and MPEG-4, but it aso deveoped audio compression standards, which are discussed ater in this chapter. MPEG standards have enabed a number of advanced video services. For exampe, MPEG-based DVDs and Bu-Ray discs repaced videotape as the preferred medium for viewing Hoywood movies in the home. Digita teevision, incuding over-theair broadcast digita TV, digita sateite teevision, and digita cabe TV, is based on the MPEG video compression standards. Aso, much of the content for streaming media on the Internet is compressed using MPEG or cosey reated technoogies. What Happened to MPEG 3? Some readers may be curious about the ack of an MPEG-3 standard. In fact, there was originay a working group caed MPEG-3 set up to deveop a standard to focus on mutiresoution encoding. Because this group s work was competed before the work on MPEG-2 was competed, the work was simpy incorporated into the MPEG-2 standard. Readers shoud be carefu not to confuse the MPEG audio coding standard caed Layer III, often abbreviated as MP3, with the nonexistent MPEG-3 video compression standard. MP3 audio fies are popuar in many music fieswapping and portabe payer systems. MPEG-1 MPEG-1 was the first standard deveoped for video compression by the Moving Pictures Experts Group. It was intended for use in creating video CDs, which had some popuarity in computer mutimedia, but never competey caught on as consumer movie renta or purchase format, and it is rarey used today. It is interesting to note that MPEG-1 is aowed as a video compression method for DVDs, and many DVD payers wi pay video CDs. MPEG-1 does not support interacing, so standard fu-resoution PAL and NTSC signas are not usabe with MPEG-1. MPEG-2 MPEG-2 is one of the primary standards for MPEG video. It is used in a wide variety of appications, incuding production for sateite teevision and cabe TV, as we as for over-the-air DTV broadcasting. Each day, thousands of hours of MPEG-2 video are recorded, processed, and payed back by teevision broadcasters around the word. Pus, miions of hours of MPEG-2 recordings are sod to the genera pubic each day in the form of DVDs.

114 Video Compression 89 MPEG-2 supports standard NTSC and PAL signas at fu resoution, as we as 720p and 1080i HD signas. MPEG-2 aso enabes mutipexing of a number of video and audio streams, so appications such as mutichanne sateite teevision become possibe. MPEG-2 aso supports five-channe audio (surround sound) and the Advanced Audio Coding (AAC) standard. Many MPEG-2 devices, incuding highy sophisticated MPEG-2 encoder and decoder devices, are in their third or fourth generations. There are iteray hundreds of miions of teevisions, STBs, digita sateite receivers, and DVD payers instaed in consumers homes that can decode MPEG-2 signas. A wide variety of MPEG-2 equipment is avaiabe for functions such as statistica mutipexing, bit rate converters, teecom and IP network adapters, and more. With sufficient processing power and memory, a PC can be used to create an MPEG-2 stream in rea time. However, for many appications, such as program editing and production, rea-time performance is not necessary, and even moderate-performance PCs can create MPEG-2-compressed video fies for ater payback. Overa, MPEG-2 is a we-defined, stabe compression system with a arge instaed base of equipment. Hundreds of miions of devices instaed around the word are capabe of receiving and decoding MPEG-2 video in a wide variety of favors. MPEG-2 is the dominant standard throughout the United States for DTV broadcasting, and new teevisions are required to be equipped with MPEG-2 decoders. However, the video and audio quaity of MPEG-2 is not competitive at stream rates beow 2.5 Mbps, and most recent vintage IPTV and Internet video equipment and systems are depoyed with more efficient compression systems such as H.264, as we sha soon see. MPEG-4 and H.264 MPEG-4 is a more recent product of the standards process; the first version became formay approved in As woud be expected, MPEG-4 incorporates a whoe range of new technoogies for video compression. The most advanced version of MPEG-4, caed Advanced Video Coding (AVC) or H.264, makes it possibe for high-definition signas to be encoded at bit rates we beow 10 Mbps, opening up a much bigger range of technoogies for transporting HD video signas. Prior to the introduction of H.264, the MPEG-4 AVC standard, MPEG-4 did not offer truy dramatic performance improvements over MPEG-2 for compressing ive natura video sequences, incuding most types of news, entertainment, and sports broadcasts. Basic MPEG-4 provided a number of advantages for synthetic (computer-generated) video and deepy penetrated IP video streaming appications (e.g., Appe s QuickTime has fuy migrated to MPEG-4). Most desktop PCs can decode MPEG-4 video using media payer software freey avaiabe on the Internet. H.264 is a more recent offering (circa 2004) and has superseded MPEG-2 in most new appications. This is because H.264 can achieve quaity eves that compare favoraby to MPEG-2 at haf the bit rate. Of course, there is a cost to this in terms of the greater processing power needed to encode and decode the signas.

115 90 IPTV and Internet Video One potentia drawback of H.264 is that decoders are more compex than those for MPEG-2. According to the MPEG-4 Industry Forum ( an H.264 decoder wi be 2.5 to 4 times as compex as an MPEG-2 decoder for simiar appications. This means more powerfu hardware devices and greater demand on processor resources for software decoders. Athough most recent vintage devices can easiy hande H.264 in a video deivery system, it is sti a good idea to test any user devices (STBs, desktop PCs, aptops, etc.) that wi be used to decode the video signa prior to widespread depoyment. H.264 offers a wide range of different performance points, caed profies, for various appications. Each of the fifteen defined profies specifies the compexity and number of features required in the decoder. Simiary, there are sixteen different performance eves that govern the image sizes (in ines and pixes) and the maximum aowed bit rates. Not a combinations of profies and eves are aowed, but there are sti a arge number of combinations aowed within the H.264 standards. As a resut, there is a wide variety of different hardware and software technoogies that can correcty be deemed to meet the H.264 standard, but ony some of them wi work for any particuar appication. Service providers may need to avoid using some of the advanced features of H.264 and stick to simper profies and ower eves, depending on the capabiities of the equipment seected. Overa, MPEG-4 is a powerfu coection of technoogies that has greaty increased the amount of video information that can be squeezed into a given amount of network bandwidth. Through H.264, much more efficient video coding is possibe, and the variety of object types avaiabe makes integration with computergenerated graphics simpe and extremey bandwidth efficient. Because of these advances, and because of the greater processing power avaiabe in set-top boxes and persona computers, H.264 is now the most common choice for IPTV and Internet video depoyments. Audio Compression Just ike video compression, MPEG has a variety of audio compression options. There are three ayers of MPEG audio, which are convenienty caed Layers I, II, and III. A more advanced audio compression standard caed Advanced Audio Coding has been introduced, aong with two more recent high-efficiency variations: HE-AAC and HE-AACþ. This section takes a short ook at each one of these. Note that any of these audio compression methods wi work with any type of MPEG video compression, except that MPEG-1 streams do not hande the AAC series of audio methods. MPEG audio Layer I is the simpest compression system. It uses 384 input sampes for each compression run, which corresponds to 8 miiseconds of audio materia using 48-kHz samping. Each band is processed separatey, and then the resuts are combined to form a singe, constant bit rate output. Layer I can achieve a compression ratio of 4:1, which means that a 1.4 Mbps CD-quaity stereo audio signa can be compressed to fit into a 384-kbps stream with no noticeabe oss of quaity. Compression beyond this to 192 or 128 kbps resuts in ower quaity.

116 Video Compression 91 MPEG audio Layer II uses more sampes for each compression run, 1152 to be exact. This corresponds to 24 miiseconds of audio at 48 khz samping. This enabes frequencies to be resoved more accuratey. Layer II aso eiminates some of the redundancy in Layer I coding, thereby achieving better compression, up to 8:1. This means that CD-quaity audio can be achieved with a stream rate of 192 kbps. MPEG audio Layer III uses the same number of sampes as Layer II, but uses them more efficienty. Layer III has an audio mode caed joint stereo, which capitaizes on the strong simiarities between the signas that make up the eft and right channes of a stereo program. It aso uses variabe-ength coding to pack the compressed audio coefficients into the output stream more efficienty. As a resut, Layer III encoders can pack CD-quaity audio into streams as sma as 128 kbps, achieving compression ratios as high as 12:1. This format is widey known as MP3 and is used extensivey in portabe music payers and onine stores that se music. MPEG AAC is avaiabe ony with MPEG-2 or MPEG-4 video streams. It supports up to 48 audio channes, incuding 5.1 audio. Very good-quaity resuts for surround-sound appications can be achieved with AAC at 192 kbps, and CD-quaity stereo can be achieved at a bit rate of 96 kbps. HE-AACþ can do even better, with near-cd quaity at a bit rate of 48 kbps, athough at a cost of greater end-to-end deay (more than haf a second) and greater compexity for the encoder and decoder. A number of portabe music payers are capabe of paying this format, as we as PCs with the appropriate software. Doby AC-3 Audio Doby AC-3 audio coding is aso commony known as Doby Digita. It offers a high-quaity audio experience with good compression characteristics and has been approved for use both in DVDs and in digita teevision broadcasts in the United States. Doby AC-3 audio is incuded in some versions of MPEG-4 and H.264 and is used on a number of sateite teevision systems. Overa, MPEG audio is fexibe and does not require near the magnitude of processor invovement of MPEG video. As the ayer number goes up, the compexity of both the encoder and the decoder go up, but so does the compression ratio. Software-ony Layer III decoders can run smoothy in a wide variety of persona computers. AAC decoders are easiy within the range of current processor performance, and support for AAC has become widespread in portabe devices and mobie phones. When choosing an audio-encoding method, remember that the overa transport bandwidth must be high enough to carry the video signa, the audio signa, and some overhead to make the streams operate correcty. Microsoft Windows Media and VC-1 Windows Media Payer is a genera-purpose software package designed for PCs that uses the Microsoft Windows operating system. It can support a wide variety of video compression formats and is capabe of processing a wide variety of Internet video streams.

117 92 IPTV and Internet Video Microsoft aso designed a video compression system that was originay caed Windows Media 9 and was subsequenty formaized in the 421M standard by SMPTE. Some IPTV providers who have impemented systems based on Microsoft technoogy have adopted this standard, which is known informay as VC-1. Some readers may wonder about the differences between VC-1 and H.264. Both codecs offer significant advances in coding efficiency (i.e., fewer bits for a given picture quaity) as compared to MPEG-2. To date, there hasn t been any compeing evidence to say that one is ceary better than the other for any arge group of appications. Interestingy, many vendors of encoders and decoders are designing their hardware to support both technoogies through the use of genera-purpose digita signa processing (DSP) hardware and downoadabe firmware. Other Compression Technoogies MPEG and Microsoft are not the ony games in town. Here are a few other compression technoogies that bear consideration for service providers, primariy those in the Internet video market. JPEG Standards deveoped for compressing photographic (sti) images by the Joint Photographic Experts Group are caed JPEG fies. These standards have been adapted for video use by treating each frame of video as a separate picture and compressing it. The approach brings some benefits, most importanty is the ease in which motion sequences can be edited. Because each frame of video is compressed individuay, there are no structures ike the GOPs of MPEG and therefore no restrictions on when one frame sequence can be stopped and another started. JPEG fies are used in some video editing systems precisey for this reason. JPEG2000 JPEG2000 is an advanced form of sti image compression that was finaized in 2000 (hence the name). It uses a competey different technoogy for image compression than JPEG (caed waveets), but performs the same tasks. Because JPEG2000 aso compresses each frame of video individuay, the technoogy is not abe to take advantage of the simiarities between adjacent frames. As a resut, streams tend to be higher bandwidth than those used commony in IPTV and Internet video appications. Proprietary Codecs A number of proprietary video and audio codec systems are on the market, and many of them are suitabe for use in Internet video networks. Because they are proprietary, the exact detais of their operation are normay not provided for genera

118 Video Compression 93 pubication. In addition, because the different codec manufacturers engage in competition, product cyces are short and performance and other specifications can change rapidy. Let s ook at two codec suppiers for the video streaming market: Rea Networks and Adobe. Rea Networks is a suppier of proprietary codec technoogy. Most of Rea s products are targeted at the video streaming market. As with Microsoft s products, a number of third-party toos (from suppiers such as Adobe) can be used to create compressed video streams in both rea-time and off-ine production environments. Content is avaiabe for streaming on the Web in Rea s Sure Stream format, which is designed to automaticay adapt to suit the wide range of different network connection speeds used around the gobe. Adobe s video compression system, caed Fash, is widey used in Web site design and Internet video, incuding popuar video portas such as YouTube. Video compression is even offered as a Web service, where video fies can be upoaded to a server and then connected to a Web site for viewing. One distinguishing feature of both of these codec suppiers is their wiingness to provide a free software cient (payer) for receiving their compressed video streams. Literay hundreds of miions of persona computer users have downoaded and instaed these payers onto their desktop and aptop computers. In addition, most of these companies aso suppy a free encoder with imited functionaity. More sophisticated encoders are generay avaiabe for a fee; these versions often contain advanced features that can make the job of creating content fies easier, as we as using more efficient compression agorithms. There are no easy answers when deciding whether to use proprietary codecs. The main software-based codec suppiers have a ong and distinguished track record of innovation and customer service. The same can be said for many hardware-based codec suppiers. Nevertheess, any users of a proprietary codec run the risk that their suppier wi, for one reason or another, stop providing products. Prudent users wi assess this risk and have a contingency pan in pace. Here are some advantages and disadvantages of proprietary codecs. Advantages of Proprietary Codecs Innovation: As compression technoogy advances, innovations can be incorporated into proprietary codecs very rapidy. Industrystandardstendtohaveasowerrateof change because of the need to achieve agreement between many different parties. Pricing: Many proprietary software codec suppiers offer basic versions of their payers (decoders) for free and have free or ow-cost encoder options. Backward Compatibiity: Proprietary codec suppiers have a strong incentive to ensure that new versions of their codecs work with previous versions and have typicay done a good job in this area. This may not be as true with designs based on standards, uness backward compatibiity is defined expicity in the specification.

119 94 IPTV and Internet Video Disadvantages of Proprietary Codecs Portabiity: Because a singe vendor contros when and how proprietary codecs are impemented, versions for aternative patforms may be ate to arrive or never produced. This can imit users choices, particuary in the seection of operating systems. Change Contro: Major codec suppiers determine when new features are reeased to the market and frequenty encourage end users to upgrade their PC appications to the atest version. This can make it difficut for arge organizations to ensure that a users have the same appication version and to ensure that the codec software doesn t interfere with other appications. Patform Requirements: As codecs become more powerfu, the minimum requirements for other system components (operating systems, processor speeds, etc.) can aso increase. This can force users to depoy system upgrades in order to use the atest versions of some software codecs. Archiva Storage: As with any rapidy evoving technoogy, ong-term storage of encoded video fies is usefu ony as ong as suitabe decoder software is avaiabe. In the case of proprietary codecs, the suppier contros software avaiabiity over the ong term. Digita Turnaround Digita turnaround is the process of taking video and audio signas encoded in one format and converting them into another format. This normay occurs under the contro of a service provider to hep standardize the operation of a mutichanne system and is a widespread practice in IPTV systems. Once each stream has the same compression technoogy, GOP ength, and bit rate, the process of channe changing is simpified greaty: one compressed stream simpy repaces another stream with compatibe compression formats whenever a viewer decides to switch. Digita turnaround usuay consists of two tasks: transcoding and transrating. Transcoding is the process of converting a video signa that is encoded in one technoogy (say MPEG-2) into another technoogy (say H.264). The best-quaity resuts can usuay be obtained if the signa is never fuy decompressed or recompressed, enabing the output signa to cosey match the origina video feed. Transrating is the process of changing the bit rate of video streams. Most IPTV providers convert a of the incoming content into a common bit rate, using one range of bit rates for a SD content and a second range for HD content. Transrating needs to happen frequenty because many content suppiers use a higher bit rate for distributing their content than the rates that most IPTV and Internet video service providers choose to use. Reaity Check This chapter s Reaity Check discusses the icenses necessary to use some of the compression technoogies described here. Every DVD payer and every DVD disc sod incudes the cost of a mandatory icense fee coected for each unit

120 Video Compression 95 produced. Service providers need to consider icense terms when anayzing the costs of instaing a video deivery system. Discaimer Neither the authors of this book nor the pubisher caim any expertise in icensing aw or in the terms of the MPEG LA icense agreement. Readers shoud consut with MPEG LA and any other icensing bodies to confirm a detais of the required icenses prior to instaing a video network that reies on this technoogy. Technoogy Licensing As we have seen in this chapter, a huge number of cever technoogies have been appied to the art and science of video compression. Even though much of this technoogy is governed by internationa standards, not a of this technoogy is in the pubic domain. In fact, many of the key technoogies used in MPEG and other compression systems were deveoped by individuas and corporations who sti retain ownership of their technoogy in the form of patents and other egay protected rights. For exampe, the patent portfoio for MPEG-2 technoogies incudes 630 patents from around the word. Fortunatey, the owners of these technoogies banded together to set up an organization known as the MPEG LA (the LA originay stood for Licensing Administrator, but now LA is the officia name). MPEG LA is responsibe for estabishing and coecting the icense fees on the technoogy and for distributing the coected funds to the patent owners. This centra cearinghouse provides big benefits to the users of this technoogy, as one simpe payment to MPEG LA satisfies the patent obigations for the covered technoogy. Contrast this with the headaches and compexities that woud be invoved in negotiating separate icense agreements with the 201 companies that have patents incuded in the MPEG-2 technoogy poo. The icense fees are assessed on a per-item basis and are officiay described on For exampe, the fee isted on the Web site for an MPEG-2 decoding device (such as a DVD payer, STB, or computer with a DVD payer, whether hardware or software) produced after 2002 is $2.50. Other fees are assessed for MPEG-2 encoders, MPEG mutipexers, and other devices. Fees are aso assessed for recorded media, such as DVDs, but the fees are reativey ow (e.g., $0.03 for a singe-ayer DVD disc, athough there are a number of different ways of cacuating the fee). There are simiar fee arrangements for H.264 devices. In addition, fees are based on the number of streams created and on the number of subscribers served in cabe and sateite teevision systems. There are aso fees for individua tites sod to viewers on a DVD or via pay-per-view, such as a VOD system. These fees have

121 96 IPTV and Internet Video created some controversy in the industry because they incude charges for the device itsef (simiar to the MPEG-2 charges) and aso charges for viewing content using the device. Aso note that the same type of fee structures appy for VC-1 and other common codecs. Where does this eave the owner of a video networking system? First, it is important to understand that because fees for devices are normay coected from the device manufacturers, end users of equipment generay don t need to worry about technoogy fees. Second, pubishers of media, such as DVDs, are aso responsibe for paying the fees required for those items. Third, most of the H.264 icense fees that are payabe on a per-stream or a per-subscriber basis are targeted at companies that are charging users to view the videos. Because the icensing terms are compex, it woud be prudent to perform a thorough ega review of any icensing fees prior to beginning a major service depoyment. Summary Video compression is a requirement for essentiay a IPTV and Internet video systems. This chapter began with a discussion of why compression is so important. GOP ength, a very important topic for service providers to consider, was discussed in depth. The chapter then took a ook at the varieties of MPEG for both video and audio appications, as we as other compression systems, incuding Microsoft s VC-1, JPEG, and offerings from Rea Networks and Adobe. It concuded with a brief ook at digita turnaround and a discussion of icensing issues. Any service provider needs to make a carefu evauation before choosing a compression technoogy. Each technoogy has benefits and drawbacks in terms of performance, cost, avaiabiity, and scaabiity that can have major impacts on business pans, depoyment schedues, and viewer experiences. This choice cannot be taken ighty, as providers wi need to ive with their choices for years to come.

122 7 Maintaining Video Quaity and Security Teevision is ike the invention of indoor pumbing. It didn t change peope s habits. It just kept them inside the house. Afred Hitchcock Quaity and security are important for any video deivery system. Quaity is a prerequisite to keeping viewers happy (and therefore paying their monthy subscription bis) and to providing advertisers and content owners with image quaity compementary to their desired pubic images. Security is needed to keep viewers from watching content they aren t authorized to view and to prevent them from making unauthorized copies of content that ony they are authorized to view. This chapter begins with a discussion of the main factors that affect quaity and how they can be controed. It then examines the roe of conditiona access, which manages which viewers have the abiity to watch which content. The chapter concudes with a discussion of digita rights management and how it reates to the types of video signas that are often used with IP-based deivery systems. The Corner Office View Service providers understand the importance of video quaity to their bottom ine yet fee they do not currenty have the right soution for monitoring and managing video quaity from the content ingest point at the head end to the customer premises equipment (CPE) in the home. Gary Schutz, president and principa anayst of MRG 1 Factors That Affect Video Quaity A wide range of factors can affect the quaity of a deivered video signa and have important impacts on the viewer experience. Managing the video deivery system to optimize these factors wi resut in more satisfied viewers. 1

123 98 IPTV and Internet Video Audio/Video Synchronization In rea ife, as peope move their ips whie taking, the sounds change accordingy. Simiary with sounds from physica objects when a person s shoe hits a hard pavement, a sharp sound can be heard. Viewers find it objectionabe when the sounds don t match the image being dispayed in a video presentation. When a mismatch occurs, it is caed a oss of ip sync or a oss of audio/video synchronization. One potentia source of ip sync probems is cock differences between the transmitting and the receiving ends of a video ink. Carefu management to ensure that both the encoder and the decoder in a ink are referenced to a common cock signa and that these cock signas are transmitted propery aong with the compressed video stream wi hep ensure that synchronization doesn t become an issue. Assuring ip sync can be difficut on IP networks, which are inherenty asynchronous. The soution ies in carefu network provisioning (to ensure that adequate bandwidth is avaiabe for a the traffic) and in making sure that there are no processing bottenecks (such as overoaded routers) that can deay or scrambe the order of packets. Some IP receivers (incuding STBs and PCs) can be configured to use arge incoming packet buffers to smooth out any deay variations or to reaign packets that arrive in the wrong order. This has side effects of deaying the signas fowing through the device and increasing channe change time to aow the buffers to be fied with new content. Both of these effects shoud be imited as much as possibe. Source Image Quaity As with many compex processing systems, the adage garbage in, garbage out appies to IP video transport. For exampe, source signas that have a ot of noise (i.e., random changes in the video image that are not present in the source scene) can greaty affect the performance of MPEG encoders. When this happens, the encoders see the noise as changes in the image that need to be captured in the compressed data stream, thereby creating more work for both the encoder and the decoder. This can divert processing power away from other portions of the image that coud otherwise benefit. Severa things can be done to improve source image quaity. First, service providers can work with content providers who have high-quaity source images and get the content directy from them rather than through intermediate sources. Second, high-quaity video inks using itte or no compression can be used to bring the programming from the sources to the network. Third, noise reduction equipment can be used to cean up noisy video signas, making them easier to compress. Macrobocking When images are compressed using MPEG or other bock-based compression technoogies, the image is broken up into groups of pixes before the compression operation begins. For MPEG-2, the pixes are grouped into macrobocks that measure 16 pixes on a side. Borders between adjacent macrobocks on a video screen can be quite

124 Maintaining Video Quaity and Security 99 noticeabe to the eye if there is an abrupt change in coor or brightness between adjacent bocks. This can occur if the image has been compressed excessivey; that is, there are not enough bits in the MPEG stream to accuratey reproduce the source image in each bock. When these borders appear, the perceived image quaity for human viewers drops significanty, and steps are often taken to prevent this. Macrobocking is more ikey to be noticed in scenes with a ot of motion, with subte gradations of coor or in scenes where the overa ight eve in the scene is moving higher or ower (i.e., a fade to back) when essentiay every pixe on the screen is simutaneousy changing intensity. When macrobocking reaches an extreme state, each of the four 8 8 image bocks contained in a macrobock may be represented as a singe coor (aso caed pixeation), which can be very objectionabe to viewers. To prevent macrobocking, video providers need to make sure that the bit rate of the video stream is high enough to hande the motion and detai eves in the origina pictures. In addition, many MPEG streams use error correction to prevent minor bit errors from causing macrobocking. If onger duration errors occur in the path between the encoder and the decoder, then some data needed to reconstruct the picture are ost or corrupted. When this happens, the decoder is not abe to recreate the source image correcty, and the output for that bock of data may be corrupted. To the viewer, this oss of data often appears as one or more macrobocks with very poor resoution. This probem can be corrected by eiminating the errors in the data path or by at east reducing them to a ow enough frequency that error correction can be effective. Sound Quaity The quaity of audio signa deivery has a significant impact on teevision viewers. Unsurprisingy, viewers prefer high-quaity sound to ow-quaity sound. Much more interesting is the correation between deivered sound quaity and perceived image quaity studies have shown that viewers wi rate the image quaity of a video signa higher when the quaity of the audio is improved without any change in the dispayed image. In some ways, audio deivery is more compicated than video. The ear is much more difficut to deceive than the eye even short interruptions in an audio signa (ess than 10 miiseconds) wi be noticeabe. In contrast, an isoated oss of a fu 33-miisecond video frame can easiy be conceaed by dupicating the previous frame so that most viewers wi never notice the interruption. Fortunatey, compressed audio signas typicay require much ess bandwidth than compressed video signas. This makes it possibe to add more error correction to the audio signas without having a significant impact on the overa signa bandwidth. Resoution The resoution of a video image refers to the number of pixes present. Images with higher pixe counts have higher resoution (uness the image has been degraded in some other manner). In IPTV systems, image resoution is normay matched to the dispay

125 100 IPTV and Internet Video resoution, so an SD signa for an NTSC system woud have 720 pixes on each of 480 ines. In Internet video, many different video resoutions are used, ranging from QCIF at to fu HD at pixes and everywhere in between. Deivered resoution needs to be managed carefuy. Viewers typicay prefer higher resoution signas to ower ones, but high resoution can carry a high price in terms of system design. If the number of pixes in each dimension (vertica and horizonta) doubes, the tota number of pixes in the image goes up by a factor of four. This not ony adds to the amount of bandwidth required for a signa, it aso adds to the amount of processing power needed to encode and decode the signa. Higher resoutions generay increase the burden on the entire system, from start to finish. Many Internet video systems deiver signas at ess than fu SD resoution, both to save bandwidth and to make images easier for PCs to dispay. Virtuay a IPTV systems offer SD resoution video (comparabe to broadcast, cabe TV, and sateite systems) and most offer HD video. Internet Protoco Artifacts Artifacts are image or sound impairments that are detectabe to a viewer. They can be caused by noise, encoding errors, transmission errors, decoding errors, poor cabing, dispay errors, and other sources too numerous to name. Let s focus on three common causes of artifacts in an IP video deivery system (bit errors, packet oss, and packet jitter) and see how they can be avoided. Bit Errors Bit errors occur when the digita information deivered to the user device is different from data originay sent. Bit errors are caused by a wide range of physica phenomena on any network, incuding over-the-air broadcast, fiber optic, and sateite systems. When errors occur, they can affect any data used to create the picture. Some errors are harmess, affecting ony a singe pixe, whereas others can be quite serious and affect mutipe frames of video. Unfortunatey, because bit errors tend to be distributed randomy, there is no good way to predict whether a given bit error is going to be harmfu or not. There are a number of schemes for correcting bit errors. One method invoves retransmitting errored packets; this is the method used by the TCP protoco. As discussed in Chapter 5, this isn t usuay the best soution for streaming video due to the potentia deays in retransmission. Another method to hande bit errors is caed forward error correction (FEC). With FEC, additiona data are added to each packet of data that enabes the receiver to correct a imited number of bit errors in each packet. One popuar method for cacuating FEC data that is part of the MPEG standard is caed Reed Soomon, based on a semina 1960 paper by I.S. Reed and G. Soomon. 2 Even a modest 2 Poynomia Codes over Certain Finite Fieds, J. Soc. Indust. App. Math. Voume 8, Issue 2, pp (June 1960).

126 Maintaining Video Quaity and Security 101 amount of FEC can have a significant impact on the system bit error rate. However, this protection comes at a price extra FEC data consume bandwidth on top of that needed for video and audio data. As a resut, not a service providers use FEC, depending on their overa system error rate performance targets and network quaity expectations, among other factors. Packet Loss Packet oss is one of the most common errors that can happen on an IP video deiverysystem.itcanbecausedbymanysources, incuding bit errors that corrupt IP packet headers (forcing them to be discarded), overoaded inks that force routers to discard packets, inadequate or mafunctioning networking equipment, and other sources. Packet oss is a routine occurrence on the Internet, and Internet video deivery systems must be designed to hande it. One way to hande Internet packet oss is to use arge buffers at the receiver and enabe retransmission of ost packets, which can be done with downoad and pay deivery techniques. Another option is to use error conceament in the decoder. A fina option is to use packet-eve FEC. One popuar packet-eve FEC technique is defined in SMPTE standard 2022 (aso known as COP3). Using this method, packets are grouped into rows or coumns and an FEC packet is added to each row (or coumn) of data. If any singe packet in a row (or coumn) of data is ost, the FEC packet for that row (or coumn) can be used to recreate the ost packet. Of course, this method can add significant deay to the overa transmission system (due to the need to process whoe rows of packets to add the FEC and recover from errors) and it can aso add significant overhead (if, for exampe, the row ength is set to 10 packets, then 1 FEC packet is added to each row, resuting in FEC overhead of 10%). COP3 has been widey adopted for transmitting professiona-quaity video over IP networks and can be used for any video deivery ink. In IPTV systems, packet oss can be minimized through the use of carefu system design practices (such as buiding in surpus bandwidth) and by carefu contro of the amount of traffic aowed to enter the system to avoid overoading the inks. However, occasiona packet osses that cannot be competey avoided must be handed in a gracefu manner by the decoder equipment. Packet Jitter Packet jitter is created when the packets that make up a data stream do not arrive in a smooth, continuous fow. For exampe, if an appication was trying to send 100 packets per second in a smooth stream, it woud try to send 1 packet precisey every 10 miiseconds. If these packets were sent across a jitter-free network, they woud arrive with the same timing: 1 packet every 10 miiseconds. When this pattern is disturbed packets start arriving too soon or too ate jitter occurs. This causes the gaps between the packets to be either too short or too ong say 9 miiseconds or 11 miiseconds.

127 102 IPTV and Internet Video For norma data, such as e-mai or a Web page, jitter is not an issue because this information is not time based. It reay makes no difference if the Web page is dispayed a few miiseconds eary or ate because such differences are imperceptibe to peope. However, for data streams containing audio or video information, such variations can be very harmfu. To understand how jitter affects a video stream, reca what makes up a video stream. It is, in effect, a series of pictures taken 30 times per second (25 times per second in most countries outside the United States and Japan) that, when payed back one after the other, gives the iusion of motion to the human eye and brain. This technique works fine when the series of pictures is dispayed in a smooth, continuous fow. However, when the picture dispay times vary excessivey, the iusion of motion can be broken, and the video becomes uncomfortabe to watch. Jitter aso makes the synchronization of video and audio data more difficut because cock variations can affect the two data streams differenty, causing timing errors in the decoding process. In actua appications, jitter wi affect both uncompressed and compressed video data. This is due to the cock information carried with a compressed signa. These cocks are fundamenta to the operation of MPEG and other types of decoders. When these cocks get disturbed, there can be many different impacts on the video signa. For exampe, excessive jitter can cause the receiver buffers to overfow or run out of data. In either case, the video image can be disturbed by suddeny freezing when data run out or by osing picture information when the buffer overfows. There are two main ways to fight jitter in an IP network prevent it or use a buffer to fix the timing at the receiver. Many successfu systems empoy both techniques to keep jitter under contro. Preventing jitter is simpy a matter of ensuring that any packets containing video data are not deayed at any point during their transit through the network. This means there needs to be an adequate avaiabe bandwidth on each ink, minimizing the random chance that video packets wi be bocked or deayed by other traffic. In addition, the data routers that form the core of many networks need to be abe to send certain types of packets (such as those containing video fies) as a priority over other packets, reducing the chance that they wi be deayed. Buffering incoming packet data is aso commony used to reduce jitter. The buffer is set up on a FIFO basis (first in, first out), with the size of the buffer imited by the amount of deay that can be toerated. Incoming packets are put into the buffer as soon as they arrive, at a variabe rate due to any accumuated jitter. Packets are removed from the buffer according to an eveny spaced cock signa so that any accumuated jitter is ceaned out. This cock rate needs to be tuned carefuy to make sure that the buffer doesn t overfow with too many packets or underfow with too few packets. The cock may aso have to adapt to changes in the underying packet rate. One disadvantage of buffering is that it adds deay to the overa deivery system, which increases the amount of time it takes the system to recover from a faiure or to switch to a different packet stream due to a channe change or other event. As a resut, there is a ot of pressure to minimize the amount of buffer used whie sti providing enough to hande the amount of jitter expected at the input.

128 Maintaining Video Quaity and Security 103 Signa Avaiabiity Avaiabiity is a measure of the amount of time that a signa is active and meeting minimum performance eves. Avaiabiity is cacuated by measuring the duration of any interruptions in the signa and dividing by the tota ength of the program being deivered. For exampe, if a program asts 100 minutes, and it was unwatchabe for one-tenth of a minute (six seconds), then the avaiabiity of that signa woud be 99.9%. Generay, for IPTV networks, avaiabiity statistics need to be quite high to provide acceptabe eves of consumer satisfaction. A system that offers 99.9% avaiabiity for a year can be expected to be unavaiabe to every viewer for an average of 8.7 hours. This probaby won t be acceptabe to most subscribers if a of the unavaiabiity occurs in one day. As a resut, many systems are buit to offer 99.99% avaiabiity to each viewer and % avaiabiity in the common core (routers, feeder networks, etc.) of the network. Conditiona Access Conditiona access (CA) is a group of techniques used to ensure that ony viewers who meet certain conditions are given access to specific content. The basic technoogy for doing this invoves encrypting or scrambing the content so that an unauthorized viewer who receives the signa is unabe to view it. Authorized users are suppied with numeric keys that permit the operation of specia hardware or software within an STB or PC that is abe to decrypt or descrambe the signas. CA systems are avaiabe from a number of vendors; typicay these are integrated middeware systems that provide both content scrambing/encryption devices and contro the distribution of the keys required to view the content. Encryption can take many forms, but most major systems have a few core traits in common. First, the encryption and decryption must be computationay easy to perform when the key is known. Second, decryption must be difficut when the key is not known. Third, the keys must be manageabe so that they can be distributed to the appropriate viewers. Many different encryption management systems have been designed that embody these core traits. Some of the more common ones are described next. Smart Cards One traditiona form of key distribution for STBs is the smart card. These cards are caed smart because they incorporate a processor and memory that can be used by a variety of appications. Biions of smart cards are sod around the word each year for a variety of uses, incuding identification cards, mass-transit fare tickets, prepaid teephone cards (outside the United States), debit/credit cards, and a host of other appications. Typicay, a smart card contains a processor capabe of performing

129 104 IPTV and Internet Video basic cacuations and executing simpe programs, as we as memory that can hod both variabe and permanent data. Smart cards must be connected to a reading device in order to operate. In some cases, this connection is made physicay, using god-pated contacts. Some cards can aso connect wireessy to specia readers using short-distance radio signas, eiminating the need to physicay insert the card into the device. A key feature of many smart cards is their abiity to store data securey. The cards can be programmed to store secret information, such as the private part of a pubic/ private key pair. Any unauthorized attempts to read that data woud resut in the card becoming permanenty damaged and data destroyed. The interna processor of the smart card can be used to decrypt data using this stored private key, and resuts can be sent back out of the card without ever exposing the key to any externa device. For video appications, smart cards are one way to deiver descrambing/decryption keys for video content to a user device. Each content stream (or teevision channe, if you prefer) has a unique descrambing key that is created when the content is scrambed for broadcast. This key must be deivered to the viewer s device for it to be abe to descrambe the content propery. One way of doing this woud be to simpy send the key to the viewer s device; however, any other device that was connected to this communication path (think of a sateite ink) woud aso receive this key and be abe to decrypt the content. Instead, the descrambing keys are encrypted before they are sent to a viewing device. When smart cards are used for deivering descrambing keys, each viewer device must be equipped with a smart card reader, either buit in (as in many STBs) or connected through an externa port (such as a USB port on a PC). When an authorized viewer wants to watch scrambed content, the viewer s device sends a request to a centra server. This server checks to see if the viewer is authorized to view the content. If so, the server ocates the correct descrambing key for the desired content and encrypts it using the appropriate pubic key that corresponds to the user s smart card. The server then sends the encrypted descrambing key out over the communication path to the viewer s device. When it arrives, the encrypted key is fed into the smart card, and the smart card performs the decryption operation to produce the descrambing key. The viewer device can then use the decrypted descrambing key to process the incoming signa and pay the content for the viewer. Smart cards offer a ot of benefits for service providers. The cards are portabe and can be associated with a singe viewer. For exampe, a card coud be used to contro access to adut content in a viewer s home, with one card issued to the famiy and another to the aduts. Smart cards can aso be deivered separatey from the STB, making it more difficut for thieves to get access to both components. One of the big downsides to smart card management is that they need to be kept physicay secure (under ock and key). If stoen, they can be deactivated, but this can be a difficut process. Aso, smart cards can ock a service provider into a singe encryption vendor for ong periods of time, as it is difficut and expensive to swap out cards that are in the hands of thousands of viewers. This is particuary true in the unikey event that the encryption system is cracked by maicious users. If this

130 Maintaining Video Quaity and Security 105 happens, it is very expensive for the system operator to reprogram a the STBs and to issue a whoe new set of smart cards. A range of modern encryption technoogy providers have designed a repacement system for smart cards that is based on software, not hardware. In these systems, secure software modues are oaded onto each user s device (such as an STB or a PC) that provide a simiar function to the smart card. A big advantage of software-based systems is that they can be upgraded and/or repaced much more easiy than hardware-based systems because any required software updates can be deivered over a data network. Aso, according to the suppiers of this technoogy, the software-based systems provide a eve of security that is equa to or better than the hardware-based systems. Watermarking Watermarking is the process of inserting data into video or audio streams to track usage or prove ownership of the streams. It is simiar in concept to some of the techniques used to protect currency and checks against forgery or counterfeiting. The basic idea is to insert identification without impairing the user s enjoyment of the content. Digita photographs can be watermarked to show copyright ownership and terms; these watermarks can be read by most of the major image-editing software packages. Video and audio content can aso be watermarked with copyright data that can be read by some video recording and payback equipment to prevent unauthorized copying or distribution. With digita content fies, inserting a pattern into some of the ess important bits in the fie can be quite effective for watermarking purposes. For exampe, in a fie with 16-bit audio sampes, the east significant bit of any sampe represents 1/65536th of the tota output signa. When these bits are subty manipuated, a watermark pattern can be inserted in the fie with essentiay no impact on the sound of the resuting piece. Watermarking is impemented in different ways depending on the objectives of the creator of the watermark. A watermark can be specificay designed to be fragie so that any change to the fie destroys the watermark, thereby proving the fie was tampered with. Aternativey, a watermark can be designed to be so robust that even if the fie is significanty atered, the watermark can sti be discerned. Some watermarks are robust enough to remain embedded within content even when it is recorded by using a camera pointed at a video dispay. The atter is usefu for tracking content that has been dupicated without permission; there are even Web crawers that spend their time ooking at miions of Web pages to see whether they have unauthorized content that contains certain watermarks. Watermarking heps in rights enforcement when a unique watermark is created for each individua user. Individua watermarks can serve as a deterrent to unauthorized use of the content, as any misappropriations can be traced back to the specific source of the eak. Some middeware providers have started to provide systems that can produce a unique watermark inside every STB to aow traceabiity to a singe

131 106 IPTV and Internet Video subscriber. If users know that any misappropriated fies can be traced back to them, it can be a powerfu incentive to not share fies iegay. Persona Computer Security Providing security for vauabe content in PCs is a very difficut task. A major factor is that because a determined user can read essentiay a data contained on a hard disk drive, it is very hard to keep information secret. The soution is to have a robust encryption scheme for the content and to ensure that the keys used to unock access to the content are very secure. Two main forms of key protection are used on PCs: hardware based and software based. In hardware-based key protection systems, a physica device must be connected to the PC for it to be authorized to decrypt or descrambe the content. This device can take the form of a smart card attached to a reader connected to the PC. Another approach is to encapsuate a sma processor (ike those found in smart cards) into a device that can be attached to a seria port or a USB port. With either device type, the hardware must be physicay attached to the viewer s device for the content to be unocked. Descrambing keys are obtained from the device through a process of handshaking that prevents secret data stored within the device from ever being reveaed. In a software-based key protection system, specia modues of software oaded onto the user s device contro access to the key. These modues of software are not stand-aone they must be in communication with a centra server that ensures that the modues on the user devices have not been corrupted or had their security compromised. Software-based key contro offers a big advantage over hardwarebased systems because it enabes compete system updates on a reguar basis without the difficuty and expense of changing out a arge number of depoyed hardware devices. Digita Rights Management Digita rights management (DRM) is a set of software and hardware technoogies designed to protect ownership rights of a content provider. The goa of DRM is to directy contro the ways in which a viewer can use specific pieces of content. DRM systems wi typicay contro uses such as repeated viewings, time windows when content can be viewed, copying or recording the content to other devices, or recording the content to removabe media such as a CD or a DVD. The concept of DRM is very cose to that of CA. In fact, the two systems often work in cose harmony in many digita video deivery systems. The key difference is that a CA system contros whether a viewer is aowed to view content, whereas a DRM system contros what the viewer can do with the content during and after viewing. In other words, CA governs which viewers can get access to content, whereas DRM governs what viewers can do with the content they have. Thus content that is downoaded for subsequent payout (e.g., podcasts) is often protected by a DRM system.

132 Maintaining Video Quaity and Security 107 Reaity Check This chapter s first Reaity Check ooks at one of the most widey depoyed (and widey discussed) systems for protecting audio and video content from unauthorized use. Deveopment of a reiabe DRM system was essentia to Appe s successfu negotiation of contracts with the major record abes to suppy content through itunes. The second Reaity Check takes a ook at why it makes sense, in some circumstances, to provide DRM for free content. Appe s Fair Pay DRM System for itunes Appe Computer s itunes music store has been very successfu in seing biions of compressed digita music fies to miions of ipod owners. FairPay, which is Appe s name for its DRM system, is an integra part of the itunes software cient and the ipod operating software. The Fair Pay system is quite comprehensive and is abe to contro a variety of different content uses. Contros on purchased content incude imits on the number of computers that can share the content, imits on the number of CDs that can be burned with a singe payist that contains the content, and other restrictions. Many of these imitations were imposed as the resut of negotiations with the recording industry that surrounded the aunch of itunes because of the perceived revenue impact of fie-sharing systems. In February 2007, Appe Computer pubished a etter by Steve Jobs 3 that outined his thinking on DRM for digita music. He made the foowing points: DRM has never and wi never be perfect. Hackers wi aways find a method to break DRM. DRM restrictions ony hurt peope using music egay. Iega users aren t affected by DRM. The restrictions of DRM encourage users to obtain unrestricted music that is usuay ony possibe via iega methods. The vast majority of music is sod without DRM via CDs, which has proven successfu. Beginning in January 2009, DRM for most of the music sod on itunes was removed, after Appe had received approva from the music industry. However, FairPay restrictions remain in pace for video content and games and utiities for the iphone and ipod Touch. Aso, most gaming patforms (PayStation, Xbox) have pervasive DRM protection for their tites. In 2008, a number of major Hoywood studios, eectronics retaiers, and consumer eectronics manufacturers formed the Digita Entertainment Content Ecosystem (DECE). The idea behind this group is to create a DRM system that works with mutipe content providers and across mutipe consumer patforms 3 Steve Jobs, Thoughts on Music, February 6, 2007.

133 108 IPTV and Internet Video so that consumers woud have more fexibiity in how they purchase and consume content. So the question becomes: Wi DRM for video content be more persistent than DRM for music? One major difference that separates the video business from the music business is the fact that video has never been sod directy to consumers without some form of copy protection. VHS videotapes had a buit-in copy protections scheme, as have DVDs and Bu-Ray discs. Another difference is the existence of an active renta market for video content (e.g., Bockbuster and Netfix), which indicates that there is a significant number of consumers who have become accustomed to paying for the rights to watch content once. Both of these factors may mean that DRM can survive in the video marketpace, but ony time wi te. Of course, any IPTV or Internet video services provider needs to recognize one overriding fact: they wi not be abe to get access to content uness they have agreement with the content owners regarding DRM or ack thereof. Without a content suppy arrangement, no service provider wi be abe to stay in business. DRM for Free Content At first it may seem paradoxica for content avaiabe for free on a Web site to be protected by DRM technoogy. After a, once the content owner has decided to deiver the content for free to any viewer who wants to see it, why shoud they care if someone makes an unauthorized copy? We, there are a coupe thoughts to keep in mind. If any portions of the content beong to a third party (such as some of the songs on a movie soundtrack), the content owner may not have the right to aow others to make copies of that content. Simiary, the content owner might wish to estabish a certain time window for the content to be avaiabe, say for a cinematic movie preview. If downoads are controed by an effective DRM system, a time window is reativey easy to enforce. Without DRM, a time window is essentiay impossibe to enforce once there are unsecured downoads of the content circuating within the viewer base. If the goa of the service provider is to get viewers to ook at advertising on their Web porta, then ceary aowing viewers to simpy pass the content from one viewer to another wi work against that goa. By protecting the content on the Web site and by aowing users to freey share inks to content pages, the service provider can drive more viewers to their porta. This in turn wi create more page views and more exposure for the advertisements. Summary This chapter focused on describing some of the techniques used to protect video quaity and security. It began by discussing a number of potentia video impairments and how they can be avoided or corrected. It then discussed network impairments

134 Maintaining Video Quaity and Security 109 as we as those caused by the video signa processing itsef. It took a ook at the various types of errors that can occur in IP networks and what system designers have done to minimize or compensate for those errors. The second part of the chapter took at ook at the severa different techniques used to provide CA functions for service providers, incuding the benefits and drawbacks of each. It aso ooked at DRM and how it is cosey inked to but sighty different from CA. The chapter concuded with a ook at two interesting aspects of DRM.

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136 8 Sizing up Servers Whie you are destroying your mind watching the worthess, brain-rotting drive on TV, we on the Internet are exchanging, freey and openy, the most uninhibited, intimate and, yes, shocking detais about our CONFIG.SYS settings. Dave Barry Media storage and deivery technoogy may seem dry to some, but when it comes to video, it has a crucia roe to pay in bringing digita content to the masses. One of the most commony used devices in digita video production and deivery is the video server. Amost a content ends up on a server during some part of its ife cyce, whether for production, deivery, archiving, or payout. Each of these appications has its own set of requirements and group of manufacturers offering speciaized products. Because servers can be some of the more expensive items to purchase in an IP video deivery service, it is important to understand the demands of each type of appication. This chapter begins with a brief description of the major types of servers used in video appications. Then it examines a few of the categories in detai as they pertain to IPTV and Internet video. The chapter concudes with a tabe that compares the key performance parameters for severa types of servers. The Corner Office View A few years ago, a magnetic recording density miestone was announced with a press reease that read: SEAGATE BREAKS WORLD MAGNETIC RECORDING DENSITY RECORD 421 GBITS PER SQUARE INCH EQUIVALENT TO STOR- ING 4000 HOURS OF DIGITAL VIDEO ON YOUR PC The announcement discussed the resuts of a magnetic recording demonstration on the 50th anniversary of the hard drive that set this word record: The demonstration is evidence of the continued momentum in disc drive innovation and reaffirms the disc drive as the undisputed king of storage when capacity and cost-effectiveness are both required. At the demonstrated density eve, Seagate expects the capacity ranges to resut in soutions ranging in 40 to 275 GB for 1- and 1.8-inch consumer eectronics drives, 500 GB for 2.5-inch notebook drives, and neary 2.5 TB for 3.5- inch desktop and enterprise cass drives. At 2.5 TB capacity, a hard drive woud be capabe of storing 41,650 hours of music, 800,000 digita photographs, 4000 hours of digita video, or 1250 video games. Seagate anticipates that soutions at these density eves coud begin to emerge in 2009.

137 112 IPTV and Internet Video Today s demonstration, combined with recent technoogy announcements from feow hard drive companies, ceary shows that the future of hard drives is stronger than ever, said Bi Watkins, CEO of Seagate. Breakthroughs in area density are enabing the digita revoution and ceary indicate that hard drives can sustain their advantage to meet the word s insatiabe demand for storage across a wide range of market segments. 1 The state of the art continues to advance reaching 803 Gbits per inch by TDK (neary doubing Seagate s achievement) recenty. There does not seem to be an end in sight according to Katsumichi Tagami, director of the SQ Research Center, TDK Technoogy Group, who says we ve got a feeing that we wi be abe to achieve up to one terabit per square inch. Video Servers Video servers perform two main functions: storage and deivery. Storage is the physica act of keeping fies of digita video content (usuay on hard disk) for processing or payout. Deivery is the act of transmitting video content over a network to viewers or other devices that need the content. Depending on the appication, servers may be optimized for one task or the other or may need to strike a baance between them. Video servers are often made up of a number of physicay separate hard disk drives and processors. This is done both for greater reiabiity and for better performance. Reiabiity is increased through the use of Redundant Array of Inexpensive Disks (RAID) technoogies, which store extra data for each fie. Extra data can be used with a simpe agorithm to repace any data ost due to a faiure or repacement of one of the disk drives. Mutipe disk drives are used to increase the storage capacity of the tota system beyond what is avaiabe on a singe disk and aso to increase the speed at which fies can be written or read from the disk array. Simiary, mutipe processors are used to enabe the system to continue operating even if one processor fais and to provide greater computing power than woud be avaiabe from a singe processor. Here are quick descriptions of some of the different appications where video servers are commony used. Ingest servers are used to coect content from a variety of sources and make it avaiabe for use in a variety of appications. Video content can come directy from a studio camera or sateite feed, from a videotape that has just been removed from a camera or from archiva storage, from another storage device such as a hard disk inside a camera or a remote server, or from essentiay any other source that can produce a video signa. Once the video has been ingested, it can then be handed off to a variety of other devices for further processing and storage. 1

138 Sizing up Servers 113 Metadata tagging. One of the most important roes of the ingest server is the proper tagging and description of each of the ingested video fies. This information, caed metadata, which can be produced automaticay but usuay requires human intervention, is crucia to the ater processing and manipuation of the video content. If, for exampe, a mistake is made in the date of a video fie, then an editor ooking for the atest version of a shot may not be abe to find it. High-quaity data capture can be aided by the software that operates inside the ingest server to support rues for entering these data and processes that require proofreading of data by a second person once it has been entered. Fie servers are used in the video production process to hande content that is being manipuated into its fina form. For exampe, a fie server may be used to temporariy store a video cip from a coor correction workstation before it is moved to another workstation that wi be used to overay graphics. The fie server may aso be used to store content or other data that are used repeatedy in the production process, such as theme music for a recurring program or common graphic eements. Production or payout servers are used to take finished video content that is ready to air and pay it out in a continuous, highy reiabe stream. With these servers, reiabiity is key because any faiures can cause a broadcaster to go off the air. Various technoogies can be used to provide redundancy and fai-safe operation; these features are commony found on this type of server. Archive servers are designed to store massive amounts of content. This can be from a types of sources, such as ive feeds, news cips, purchased programming, and so on. Archive servers typicay emphasize arge amounts of storage at a ow cost, with speed of access being a secondary consideration. Archive servers can aso be used to keep video records of programming as it has actuay been broadcast in order to show compiance with government reguations and to answer queries from advertisers. Video-on-demand servers are designed to store content that viewers can order for viewing. These servers are typicay designed to generate as many simutaneous streams as possibe, often mutipe copies of the same content. High bandwidth network connections are amost aways used, whether the connection is to a private IPTV network or to the Internet. Advertising servers take advertising spots and pay them back ive inside video feeds. Athough they typicay don t need a massive amount of storage, they do need to interface to mutipe simutaneous video channes and to carefuy synchronize content payout to fit into the aotted advertising window. These servers need to be abe to accept video content in a variety of different formats from mutipe sources. In addition, these servers need to provide fexibe scheduing toos that can be reconfigured easiy to compy with rapidy changing advertising campaigns and keep good records of the ads that have actuay run to support advertiser biing. Live streaming servers take ive video streams and create mutipe copies for transmission on the network. Athough they need practicay no storage, they need to have a arge amount of processing capacity to create IP packets that are individuay addressed to each recipient of the stream. Live streaming servers aso need high bandwidth network connections to transmit a of the streams that they generate out into the IP network. Because the ast three types of servers just isted are often used in IPTV and Internet video appications, we wi go into a bit more detai regarding these devices in the foowing sections.

139 114 IPTV and Internet Video Video-on-Demand Servers Video on demand (VOD) is a common form of deivery for both IPTV and Internet video networks. By enabing users to seect content from a ibrary at any time, this technoogy can be a powerfu draw for attracting viewers to a service provider. It can aso be a competitive weapon against services that rey on broadcast distribution, such as sateite and digita terrestria networks. Most IPTV and Internet video services providers, as we as many cabe TV systems, offer VOD. VOD servers must perform the foowing four main functions. 1. Video content storage, which is essentiay the same function as any other video server. However, the server must be capabe of transmitting mutipe, asynchronous copies of a singe piece of content (more on this ater). 2. Network interface, which again is simiar to other video servers, with the exception that a very arge number of simutaneous streams may need to be supported. 3. User interaction support, which enabes a viewer to pause, rewind, and fast-forward video content. This can require some sophisticated software to manage a of the viewers and to interface to the middeware systems that process user commands. 4. Cataog and ordering support, which provides support for the systems used to dispay the ist of avaiabe content, as we as the transactions necessary to capture payment from the viewers. Content on a VOD server is essentiay aways stored in a compressed format that is ready for pay-out to the viewer. This simpifies the deivery process by eiminating the need to process the video before it is deivered. Because many IPTV systems have a narrow range of aowed video signa rates and normay support ony a few compression formats, a of the content stored on the VOD server must be stored in compatibe formats. Accordingy, a incoming content must pass through a video compression device before it is paced on the VOD server. In some cases, the content suppier does the compression, and compressed fies are simpy copied directy into the server. In other cases, content may arrive in an uncompressed format and must be compressed before it can be paced on the server. This compression can be done in rea time as the content is streamed or it can be done off-ine on a fie basis. In sti other cases, content may arrive compressed using a different bit rate or type of compression. If an incompatibe format is deivered, transcoding is used to convert it to a compatibe format. If the bit rate of the content needs to be changed, transrating is used to convert the content. Note that transrating is normay ony done to reduce the bit rate of video content. When purchasing a VOD server, it is important to match the capabiities of the server to the task that needs to be performed. The amount of storage can be arge or sma, and the number of streams supported can be arge or sma. These are not correated; it is perfecty sensibe to have a server with ots of storage yet itte streaming capacity if it is being used to hod video content that is rarey viewed. Conversey, it is aso sensibe to have a server with reativey itte storage (say, 50 to 100 hours of video content) but very high stream capacity if it is being used to serve first-run Hoywood movies to many viewers simutaneousy.

140 Sizing up Servers 115 High-Speed Links for Video Streams Hub Low-Speed Links for Content Repication Hub Server Hub Hub Server Library Server Hub Hub Server Figure 8.1 Centraized Server Centraized versus distributed servers. Distributed Servers IPTV service providers have two main phiosophies of network server distribution, as shown in Figure 8.1. The first is centraized, where arge, high-capacity servers are instaed in centra ocations and the streams for each viewer are deivered over high-speed communication inks to each oca service provider faciity. The second is decentraized, where smaer servers are ocated at each faciity and provide streams ony to oca viewers. A centra ibrary server provides content to the distributed servers whenever necessary. On the one hand, the decentraized concept makes sense because it heps reduce the amount of bandwidth needed between ocations. On the other hand, the centraized concept is appeaing because it reduces the number of servers that must be instaed. It aso reduces the costs of transporting, storing, and managing redundant sets of content in mutipe ocations. In reaity, both centraized and decentraized systems are depoyed depending on system architecture, capabiities, and user viewing habits that affect VOD traffic patterns. Service providers need video servers capabe of deivering video streams to hundreds or thousands of simutaneous viewers. For this appication cass, speciay designed servers are required. These units typicay have a arge number of disk drives and use mutipe processors in parae to format streams and deiver the content. The capacity of these systems is staggering; in order to suppy 1000 simutaneous users each with a 2.5 Mbps stream, the server needs to be abe to pump out 2.5 Gbps of data. Since no singe disk drive or processor in a typica server is capabe of this amount of data, servers use oad sharing among the devices. This means that each piece of content is spread out across mutipe disk drives and that a high-speed back pane interconnects the different drives to the different processors.

141 116 IPTV and Internet Video Cacuating Server Storage Capacity In order to propery cacuate the amount of storage needed for a VOD server, two things must be known: (1) the number of hours of content to be stored and (2) the nomina bit rate of the video signa. With this information, cacuating storage capacity is fairy straightforward. Let s ook at an exampe. Consider a one-hour video signa (with accompanying audio, of course) that runs at a bit rate of 2.5 Mbps. Recognizing that there are 8 bits in a byte and 3600 seconds in an hour, you easiy cacuate that the tota fie wi be biion bytes, or about 1.05 GB. Note that this vaue is approximate, as the exact format of the fie on a hard disk wi be different. In addition, a sma amount of metadata wi be added to the fie to provide a description of the video and make it easier to transmit in mutipe copies. Here are a few more exampes of required video server sizes for various amounts of content. 200 hours of SD content at 2.5 Mbps ¼ 210 GB 500 hours of SD content at 4 Mbps ¼ 840 GB 10,000 hours of SD content at 2 Mbps ¼ 8.2 TB 300 hours of MPEG-2 HD content at 14 Mbps ¼ amost 1.72 TB 500 hours of H.264 HD content at 6 Mbps ¼ 1.22 TB It is aso interesting to note that some content owners pace imits on how much compression can be appied to their video streams. Sometimes there are even contractua terms regarding the type of compression agorithm to be used. These imits are put in pace to hep ensure that the end viewer receives a high-quaity image. This can be very important to arge production companies who have a pubic image to maintain and who stand to ose credibiity or viewers if their products are overcompressed. One exampe of such a company might be a broadcaster who hods the rights to a arge number of sporting events. If oca IPTV providers use excessive amounts of compression, then not ony wi that group of oca viewers get an inferior video feed, but there coud aso be a negative impact on the broadcaster s brand image in other aspects of their business. Advertising Servers An advertising server can be a key revenue producer for IPTV systems and may aso have a roe to pay in ive streaming Internet video appications. The server s job is to insert advertisements into video streams at speciay indicated times caed avais. The resut is a video stream deivered to a viewer with speciaized advertising inserted. Let s ook at an exampe of how this technoogy works. A nationa broadcaster such as CNN designs their programming to accommodate advertisement inserts throughout the day. Many of these time sots wi be sod to nationa advertisers and broadcast by CNN to every viewer in a country. Other time sots wi be made avaiabe for oca providers to se to oca advertisers. During these sots, CNN wi

142 Sizing up Servers 117 incude audio tones or specia digita codes that indicate that these times are avaiabe for oca ads to be inserted. The ad server wi recognize the indicator and repace the feed from the network with a video fie stored on the oca server. Any viewers watching CNN through the oca provider wi see the oca ad in pace of the ad broadcast by CNN. Because the timing of each avai is under the contro of CNN, the network can make sure that oca ads are not inserted in pace of high revenue nationa ads, but rather in pace of ads that may not bring direct revenue to the network, such as advertisements for upcoming programs. In the case of Internet video, ads are commony deivered in two ways. One way is as a banner graphic or video cip on a Web porta, where viewers navigate to seect the cip they want to view or downoad. The second way is as a video spot advertisement deivered to the viewer immediatey before (caed pre-ro) or sometime during (caed mid-ro) the requested content. From a business standpoint, oca advertising can be a big source of revenue to any video deivery system operator. Over-the-air, cabe TV, and sateite broadcasters a utiize this technoogy, and IPTV and Internet video operators can earn revenue as we. This revenue can be used to hep offset the costs of programming and deivery systems, such as IPTV networks or Internet video servers. Both oca and nationa advertisers wi use oca advertising for certain purposes. For exampe, it makes no sense for a oca automobie deaer to advertise on a nationa basis. Nationa advertisers may aso want to deiver advertisements seectivey to oca audiences, such as a beverage company that may have an advertising tie-in with a oca sports team. Live Streaming Servers Live streaming servers are used to support broadcasts over the Internet. They are necessary because each video stream deivered must be made up of packets specificay addressed to each individua viewer s device there is no mechanism on the Internet to make copies of a video stream and deiver it to mutipe users (i.e., muticasting). Another way to describe a ive streaming server woud be as a unicast repication server, because their principa job is to take in one unicast stream, make mutipe copies, and then send them on toward mutipe viewers. Unicasting is the standard mode for sending packets over the Internet. In this mode, each packet has a singe source address and a singe destination address. If a source wants to send packets to mutipe destinations, it must create a unique packet for each destination. This requires processing power because each packet needs to have a correcty formatted header, with a destination IP address, a correct set of fags, and a propery cacuated header checksum. Once the packet is created, it fows essentiay intact directy from the source to the destination over the Internet. Live streaming servers need very itte storage because the content is moving through in rea time. Instead, these servers need a ot of processing power because they need to receive incoming streams, make copies for each viewer, and create

143 118 IPTV and Internet Video propery formatted IP packets in a continuous stream for each viewer with itte or no deay. In addition, the servers must be capabe of processing transactions to add and drop viewers as peope tune in to watch the video or tune out when they have seen enough or want to switch to other content. These servers may aso need to capture data as required to produce invoices for paid content, athough that task is normay the responsibiity of the Web porta that authorized the user to view the video. In contrast to most other types of servers, ive streaming servers don t have to be purchased by each company that wants to use them. Instead, service bureaus wi (for a fee) provide processing power and Internet bandwidth when a company wants to host a ive event. These bureaus, often caed content deivery networks (CDNs), wi aso host norma Web site content for deivery to Web surfers ocated around the Internet. Encryption and Rights Management Purchasing and instaing a major server system can be chaenging. However, getting the rights to enough content to fi the server can be a much more daunting task. Owners of the content wi often refuse to permit their programming to be paced on a server unti they are satisfied with the security arrangements. Securing these rights often invoves direct negotiations with the content owners and may depend on certification of the DRM system. A number of vendors of DRM systems have taken the necessary step of proving the security of their systems to the satisfaction of major content owners, such as Hoywood movie studios. At a minimum, a DRM system must ensure that the content is unusabe (for viewing or copying) uness the viewer has been provided with the proper key. There are a number of mechanisms for controing and distributing these keys, which were discussed in Chapter 7. DRM is not ony important in a VOD deivery network, but aso for the content storage itsef, directy within the VOD server. This is to prevent unauthorized uses of the content, which coud occur from an outside intruder gaining access to the server or from an inside user misappropriating the content. Content owners wi typicay insist on protection of their property both in storage and during deivery. VOD vendors have taken a number of steps to protect stored content within their systems. In addition to standard encryption techniques used in DRM, some vendors have deveoped a proprietary fie system that is separated from the norma serveroperating system. This can hep prevent hackers and viruses from reaching the stored content. A second security technique invoves breaking the content up into sma fies and distributing those fies to physicay separate hard drives. In the event that one of the drives is stoen or compromised, the content is useess because it is ony a sma portion of the overa fie. This system aso provides extra reiabiity because error correction data can be stored aong with fies so that a fies can be propery reconstituted even after a drive fais.

144 Sizing up Servers 119 Reaity Check This chapter s Reaity Check discusses three different server impementations. The first two exampes discuss ways to use servers to increase revenue, and the third discusses a way to change the physica ocation of the stored video content. Seing Space on a VOD Server to Advertisers On most VOD servers, there is a significant amount of space aocated for expansion. Whie this space may eventuay be used up, the space is simpy empty for a good part of many system ife cyces. Some cever system operators have figured out a way to everage this asset: seing space to advertisers. In this situation, the advertisements are not the norma 30- or 60-second spot ads. Instead, they are ong-form ads designed to appea to the reativey sma proportion of viewers who might want to get more information about a specific product or service. For exampe, a manufacturer of an innovative fooring product may want to sponsor an instructiona video that shows consumers how easy it is to insta and maintain their product, a uxury automobie manufacturer may want to host a program that shows a cassic car ray featuring their products, a gof equipment manufacturer may want to sponsor a gof training video, or the visitors bureau for a tropica isand may want to host a tour of their natura features. There are many possibiities. To make this successfu for both system operators and advertisers, a few conditions must be met. First, there must be a way for viewers to find out about the content and navigate to it. This wi certainy invove the use of istings in the interactive program guide, but may aso invove spash screens or inserts in more popuar pages to inform viewers that the content exists. Second, the system operator may want to exercise a minima amount of editoria contro to hep ensure that the sponsored content doesn t end up being arded with hard-se infomercias that have itte vaue for viewers. The system operator may aso want to gather some viewing statistics to see which types of content are popuar and to provide feedback to the advertisers on the effectiveness of their offerings. Advertisements Attached to VOD Content As discussed earier, not a VOD content needs to be paid for by viewers on a pertransaction basis. As discussed in Chapter 3, many different modes can be used to pay for on-demand content. Deciding how to impement an advertising-supported VOD system can be quite interesting. One of the most basic decisions that must be made is to decide when the advertisements wi appear. Many viewers have become accustomed to pre-ro advertisements, where a few short spot ads are payed before the desired content begins to pay. This is, of course, common practice in movie theaters (previews of coming events, reminders to not smoke, and advertisements of the snack bar in the obby are common themes). Pre-ro advertising is aso common on Web sites and is part

145 120 IPTV and Internet Video of many purchased content items such as DVDs and VHS tapes. The secret to not upsetting viewers is to ensure that the ads are brief and few in number. A more controversia form of advertising consists of advertisements actuay inserted into the content itsef. This technique certainy does not appea to some viewers. However, if the service provider makes it cear that advertising is required in order to pay for the content, then viewers are more ikey to understand. One very controversia aspect of advertising and VOD content is whether commercia zapping shoud be aowed. Commercia zapping occurs when a viewer decides to fast-forward past a commercia. Most ive video recording devices (such as DVRs) aow users to fast-forward through advertisements. Lega Bues for SonicBue Today, viewers reguary skip or zap commercias using DVR devices. This technoogy, which was incuded in Repay TV units sod by SonicBue, ended up being the subject of a awsuit against the company by a number of major media companies. SonicBue ended up in bankruptcy in 2003 before the case was decided so there wasn t a cear ruing in the United States about the egaity of this technoogy. However, TiVo, other DVR devices, and zapping continue to thrive, resuting in an ongoing content provider strugge to retain the attention of their audience through more inventive ads, interactive features, and product pacement. Servers and storage wi continue to pay a key roe in the emerging broadband video deivery word as new content providers find that going onine is the easiest way to penetrate a competitive U.S. or goba programming market. The broadcast era is over, content is not king anymore...distribution is king, says MMAX Enterprises sports channe executive Chuck Vaughn. Maybe that s a temporary situation, says Vaughn, but the fragmentation has shifted everything on its head which is why everyone in Hoywood is nervous. The two sides of the controversy regarding VOD service ad monetization can be summarized as foows. If zapping is not aowed, then users who are not wiing to see advertisements wi become ess ikey to watch the content. This in turn coud transate into fewer overa viewers, meaning that revenues that depend on viewers (such as subscription fees) wi drop. If zapping is aowed, then advertisers wi be ess ikey to pay for advertising, as there is a ower probabiity of their ads being viewed. Service providers may then find it necessary to charge more for VOD content. Of course, it is not necessary that this decision be made on an a-or-nothing basis service providers are free to vary the amount of advertising for different

146 Sizing up Servers 121 types of content. They can aso experiment both with advertisements that aow zapping and with ads that don t, at the risk of truy confusing viewers. Push VOD as an Aternative to Centraized Servers Push VOD uses hard disk storage ocated inside the viewer s STB to store content ocay that can be viewed on demand. Push VOD is being used to provide VOD over networks that don t have interactive capabiities. This is certainy the case with sateite networks, which simpy don t have the bandwidth to create a separate video signa stream for each user. In an IPTV system, push VOD may be usefu for a few reasons. First, by storing video fies ocay in each user s STB, the burden on the network coud be reduced when a viewer is watching a VOD program, and the oad on centraized VOD servers is ightened. Second, ocay stored content coud be used to provide entertainment or troubeshooting information to users in the event that their network connection faied. Third, oca storage coud be used to provide highy interactive programming or entertainment (such as games) that woud be difficut or impossibe to provide from a centraized server. Of course, some factors must be considered before using push VOD. First, a very strong DRM technoogy wi be required, as push VOD content is iteray sitting in a hard drive in the viewer s home. Second, a fairy sophisticated contro system wi be needed to manage which content gets deivered to each STB and to coect the payments from viewers who chose to watch the content. Vendors are appearing that offer to manage both of these issues for service providers, and as hard drive capacities increase, more content can be stored. One interesting concept that can benefit both viewers and service providers is instaing a partitioned hard drive in an STB. In one partition, the service provider can push a dozen or two popuar movie tites being featured for VOD. The other partition can be used to give the viewer a DVR capabiity for their favorite broadcast shows. This combination gives system operators two ways to pay for the extra expense of purchasing and maintaining hard drives in STBs by seing push VOD content and by increasing the renta fees to viewers for STBs that incude DVR capabiity. STB manufacturers have responded to this market by pacing arge hard disk drives into STBs and supporting partitioning in the STB operating software. Summary This chapter discussed a variety of different server types and examined in detai three types often used for IPTV and Internet video systems. VOD servers can be arge or sma, centraized or distributed, but they are aways rated on the number of simutaneous streams they can support. Advertising servers are typicay not

147 122 IPTV and Internet Video Tabe 8.1 Key Attributes of Different Types of Servers Server Type Capacity Speed Cost Key Attribute VOD Varies High stream capacity Archive As arge as possibe Not important Low to moderate Lowest cost per terabyte Bandwidth number of simutaneous streams Large capacity at ow cost Payout Low Low High Reiabiity/ redundancy essentia Advertising Low Abe to hande mutipe channes simutaneousy Live Streaming Very ow High stream capacity Medium Medium Easy to operate software, exceent record keeping Bandwidth number of simutaneous streams Ingest Low Low Medium Fexibiity for video inputs, good software for metadata workfow arge or hugey powerfu, but they need to be abe to monitor mutipe ive network feeds, insert ads reiaby, and keep good records. Live streaming servers need amost no storage but are rated ike VOD servers on their tota throughput in terms of number of simutaneous streams. Tabe 8.1 summarizes some of the simiarities and differences among the various types of servers.

148 9 The Importance of Bandwidth Here we go again! First music, then TV shows, and now movies. Steve Jobs Both IPTV and Internet video services are criticay dependent on adequate bandwidth as more and more media content moves from on-air to onine networks. Without it, Internet video fies can be excessivey sow to downoad and streaming video won t work. IPTV simpy cannot operate without sufficient bandwidth to carry the signa. As a resut, ensuring adequate network capacity is extremey important for operations and quaity of service (QoS). Ony a few years ago, skeptics maintained that state of the art in broadband was not sufficient to deiver bandwidth-hungry teevision channes. One compaint has aways been that operators woud be chaenged to ensure that they have enough bandwidth over their DSL infrastructures to compete with cabe. We, times have changed. IPTV is cooer than cabe, AT&T now boasts about their popuar U-verse service. As mentioned in Chapter 4, U-verse has grown rapidy and surpassed a miion subscribers in 2008, just four years after the teco giant announced that it was going into the teevision business. Having aunched across the United States in 2006, they now even offer IPTV through the word s argest retaier, Wa-Mart. According to AT&T, their goa is to provide a better experience than cabe. They wi match the quaity of SD and HD content offered by cabe companies, says spokeswoman Destiny Varghese, and then surpass them with interactive features for programming U-verse s DVR from PC or mobie phone and the abiity to create custom TV weather, sports, and stock dispays by setting preferences from your Internet porta. We ve ony begun to scratch the surface of what IP is capabe of says Varghese when integrated with wireess devices, PCs, and your ce phone. 1 The Corner Office View Greenfied: Forrester says there wi be a huge bandwidth crunch for teco, cabe, sateite providers. What do you think? Mark Cuban: [That] is right. There isn t enough bandwidth for a the existing TV networks; some wi die, some wi stay standard definition, some wi go HD. Any IP video soution depends on adequate bandwidth from head end to home viewer. Just as buiding a fire requires a baance of fue, heat, and oxygen, eements 1 Interview with Howard Greenfied, October 2008.

149 124 IPTV and Internet Video needed for the IPTV consumer experience are equipment, network services, and content. Bandwidth is what sparks and sustains the combustion. Without understanding how to suppy adequate throughput for data packets to produce smooth payout, the quaity of service wi degrade and subscribers wi not pay. The standard has aready been set by conventiona TV service. An audience wi accept an occasiona dropped pixe or an audio bip, but reaisticay, the threshod for picture defects, bocky video, or frozen frames is ow. By provisioning enough bandwidth to deiver on the exciting promise of personaized, interactive IPTV content, a whoe new market opens up. However, the QoS issues that accompany scaabe, bandwidth-intensive HDTV and tripe-pay service offerings wi increasingy go with the territory. To date, these chaenges and costs for infrastructure investment have been significant, but most industry anaysts see these as a minor speed bump aong the way. Among the initia soutions for addressing improved bandwidth, which is discussed ater in this chapter, are advanced DSL technoogies with higher bit rates or greater range, media compression advances, and depoyment strategies, such as constructing remote terminas coser to the home. Bandwidth requirements vary greaty depending not ony on the type of content being transmitted, but aso on the quaity of service expected. In the 1980s, a modem speed of 2400 bps aowed for basic text communications. Networks soon reached ISDN speeds at 128 Kbps but were sti too imited to carry significant mutimedia content. Today s goba DSL speeds average 1.5 Mbps with many at much higher speeds, such as cabe modems at 6 Mbps and higher. It is forecasted that over 32 miion homes in the United States wi have 10 Mbps or higher by We are fast approaching a widespread, mass commercia IPTV capabiity. Advances in compression are steadiy making headway in deivering video services over broadband. MPEG-2 video broadcast, once standard for digita teevision and DVD, requires 4 to 6 Mbps for standard definition signas. However, new and more efficient codecs, such as MPEG-4 H.264 and VC-1, ony need 1.5 to 2.5 Mbps and can render DVD-quaity video within 2 Mbps. Decent-quaity HD signas can be achieved with 5 to 8 Mbps. Additionay, more recent casses of DSL can carry far higher bandwidth than before, such as ADSL2þ and VDSL2 at roughy 24 and 50 Mbps, respectivey. Nonetheess, the bandwidth bar is continuay being raised as more and more network services are bunded together for deivery to each subscriber. The next section examines various forms of DSL and their capabiities. Digita Subscriber Line Technoogies Twisted pair based DSL faciities are widespread, with more than a biion teephone ines gobay; of the 350 miion broadband subscribers wordwide in 2008, an estimated 66% are DSL based a number forecasted to grow by a 13% 2 U.S. Broadband Update, Parks Associates, 2008.

150 The Importance of Bandwidth 125 compound annua growth rate (CAGR) through As an incumbent technoogy, DSL is a popuar, cost-effective way for tecos and other service providers to enter the new market for deivering broadband and video services without having to ay new cabe and reconstruct a system. Aso, because of the popuarity and prevaence of high-speed data DSL teephone ines, many consumers are aware that they can purchase DSL service for Internet access. Many service providers now routiney offer video content using DSL service. To understand the mechanics of DSL, it is usefu to consider the main components in data and video traffic over DSL transport. A DSL systems make a trade-off between speed and distance: onger distances must operate at ower bit rates because osses in the cabe increase as the ength of the cabe increases. As technoogy improves, these imitations are easing, but network designers sti need to pan accordingy and usuay make compromises due to these constraints. The foowing are key DSL network components (Figure 9.1): 1. The main hub, or centra office (CO), the source of the signa 2. Remote terminas (RTs) positioned between the provider s main offices and customers 3. The feeder pant where fiber-based voice, video, and data signas often trave over different transmission equipment 4. The DSLAM, ocated strategicay reative to the homes being served, which generates the DSL signas and paces them onto the pair of copper wires (or oca oop) eading to each home Among the more crucia factors in this equation is the DSLAM, which we earn more about ater in this chapter. Every DSL customer must insta a DSL modem to Centra Office (CO) Feeder Pant IP Video Services Data Services DSLAM Teephony Services DSL Spitter Digita Subscriber Loop DSL Spitter Voice DSL Modem IP Video IP Data STB Video + Audio Loca RT Figure 9.1 DSL system diagram. Viewer s Home 3

151 126 IPTV and Internet Video receive DSL signas from the DSLAM and convert them into the proper form for the customer s other devices, such as a PC, a data router, or a teevision set. The modem aso takes data signas from the customer and transmits them back to the service provider. Of the more common types of DSL services avaiabe, each has its advantages and disadvantages. These can be summarized at a high eve as shown in Tabe 9.1. Actua bit rates that can be achieved on a DSL circuit can vary somewhat and depend on many factors, incuding the ength of the subscriber s oop and the amount of noise or interference present on the ine. In addition to using existing wires aready run to many homes and businesses for teephone service, another advantage of DSL circuits is that they are normay designed to fai gracefuy. This means that if a customer oses power or the DSL equipment fais, norma teephone cas can sti be made. A disadvantage of DSL services for video is that ony a handfu of broadcast-quaity signas can be sent down a DSL ine. Aso, a separate stream must be dedicated to each teevision or other video-receiving device (VCR, digita recorder, etc.) and each must be equipped with an STB. We ve earned the basics of how DSL technoogy works. It s equay important to see how IPTV systems are impemented over advanced ADSL and VDSL circuits to understand the dynamics of home deivery and regiona penetration. Tabe 9.1 DSL Service Type Options for Broadband and IPTV Bandwidth Advantages Disadvantages G.ite ADSL VDSL ADSL2þ Up to 1.5 Mbps downstream; up to 512 kbps upstream Up to 8 Mbps downstream; up to 1 Mbps upstream Up to 50 Mbps downstream; up to 12 Mbps upstream Up to 24 Mbps downstream; 1 Mbps upstream Provides greater reach; does not need the spitter required on ADSL circuits to separate voice and data signas Mature technoogy Better bandwidth at short distances Smoother ro-off; as you go further from the source there is a gradua decrease in performance Not fast enough for video Wi hande a few SD channes or at most one HD; spitter required to separate voice and data signas Maximum distance is quite short (1000 feet) May not work on a existing copper cabe

152 The Importance of Bandwidth 127 More about VDSL and ADSL It is said that there is broadband and then there is broadband, varying widey depending on geography, standards, and adoption rates. Most companies depoying IPTV currenty use VDSL and ADSL2þ, and ro-outs abound wordwide. In Germany, Deutsche Teekom, which has invested EUR 10 biion in its DSL technoogy 3 since 1999, has opened up its VDSL whoesae service in parae with the German government s expicit goa of deivering 50 Mbps broadband to 75% of a househods by CenterTeecom in Russia is about to offer IPTV over its ADSL in the Moscow metropoitan area 5 whie performance continues to advance as Ericsson has announced 500 Mbps VDSL2 over copper. Compared to what s ahead, prior generation DSL technoogies, such as Asymmetric Digita Subscriber Line (ADSL), provide reativey imited amounts of bandwidth from the service provider to the consumer and even more restricted inks from the consumer back to the provider (hence the asymmetrica eement of ADSL). With H.264 compression technoogy, this is barey enough for one SD video and audio stream, with a itte eft over for Internet access. To keep overa speeds reasonabe and to enabe other services (such as Internet access) on the ADSL ink, it is norma to find ony one, or at most two, video signas on a singe ADSL circuit. However, ADSL2þ has become more prevaent for IPTV because, for one thing, its downink speed is twice that of ADSL. Aso, ADSL2þ is capabe of 24 Mbps performance (in theory) and supports port bonding, which doubes bandwidth again wherever the DSLAM supports it. Performance is dependent on the proximity of the home to the exchange. ADSL2þ provides a smoother performance ro-off than ADSL as this distance increases, but has the disadvantage of not being compatibe across a existing copper cabe and modem devices. Very high-speed Digita Subscriber Line (VDSL) technoogy supports significanty more bandwidth on each subscriber ine. Accordingy, more video channes can be transmitted to each VDSL subscriber, with three or four simutaneous videos possibe. HD video signas coud aso be transmitted (possiby mutipe ones), VDSL speed permitting. One drawback to VDSL is that the range of operationa distances is ess than that of ADSL so subscribers need to be coser to the service provider faciities (which is one reason why VDSL is more popuar in Europe and Asia where housing densities tend to be greater). Aso note that the speed of DSL services varies with distance, so good panning for varying data rates is essentia (Figure 9.2). Each teevision set that receives IPTV signas over DSL requires an STB to decode the incoming video. Some STBs can act as the residentia gateway in the home and provide connections for other voice and data communications equipment. Because of DSL speed imitations, each time a viewer changes channes on the DSL IPTV system, a command must be sent back to the service provider to indicate that a new video stream needs to be deivered. We ook more cosey at both home gateways and channe changing atency issues ater in this chapter

153 128 IPTV and Internet Video 60 DSL Distance Comparison Data Rate (Mbps) VDSL ADSL2 ADSL 10 0 Figure Loop Length (kft) ADSL, ADSL2þ, and VDSL rate and distance performance. DSL Depoyment: Homes Served, Homes Passed Cacuating ROI on IPTV and DSL business cases can become a compex cacuation. There are many costs to take into account, incuding network infrastructure, operations, and maintenance; content rights and royaties; and customer marketing. One way to keep an eye on the bottom ine is to use a depoyment measure, homes passed (HP), which refers to the number of potentia subscribers who are ready to be served, athough they may not actuay choose to subscribe to the service. Creating a network with a significant quantity of homes passed is an up-front investment for provisioning fu service to communities. In traditiona OTA and sateite broadcast settings, the ratio of homes passed to homes served (HS) is not a significant issue because the abiity to broadcast to a region is mosty about skifu broadcast tower and sateite transponder depoyment: essentiay, a singe transmission reaches a. In IPTV impementations, however, covering a region requires more panning and depoyment steps to connect a ine to pass in front of every home and arrive at an optimum, profitabe ratio of homes served to homes passed. The penetration ratio of HS to HP is what counts. One rue of thumb for achieving adequate ROI is that penetration must reach 20% at an eary stage of depoyment. Because most business case data about IPTV systems is a cosey guarded secret, there is not enough pubic information to determine what s working and what