iTV - United we stand (divided we fall)

March 2002

After years of being just about to happen, it looks like 2002 will be the year when interactive TV really comes of age, as evidenced by substantial deployments worldwide and encouraging statistics from the first enhanced services. But, asks freelance industry consultant Jonathan Peachey, has the emerging industry already shot itself in the foot?

We used to know where we were with TV: a tape was a tape wherever you were and the world's analogue TV standards were sufficiently similar that all programmes could easily converted for viewing anywhere. Even with digital television, the majority of TV distribution systems share a common development platform, making it easy to distribute programmes over different networks. Finding a common platform standard for interactive digital television (iTV), however, is proving a problem - and setting the economics of TV back.

Currently, a commercial TV channel gets paid for the number of people watching - once through subscription revenues paid by the distributor and again through advertising revenue. Additionally, programmes made by channels and content providers can be syndicated to other TV stations to offset the cost of production, thereby earning further revenue.

With broadband iDTV, however, a tape is not a tape wherever you are and content development is being hindered as a result. There has been much talk of the 'chicken-and-egg' situation: 'should the networks develop in order to deliver the content (which has yet to appear) or should the content be made as an incentive for the networks to invest and improve'?

The answer appears to be that until the networks can agree a platform standard - enabling content developers to make TV programmes for all networks, affording them economies of scale and attractive profits - the content will not be made and the chicken-and-egg situation will not be resolved.

There are currently four types of middleware standard available for iDTV and three types of channel platform. For content owners this creates a very serious problem: interactive enhancements to TV programmes must be separately authored for each of the middleware platforms. And cable, satellite and terrestrial TV distributors around the world are now busy rolling out interactive digital TV services that rely on middleware software that are almost entirely incompatible with each other.

Developing software applications and content for even one of these platforms is currently a long and costly process; developing for all three is prohibitively expensive, and therefore unlikely to be delivered.

Root causes

Of course, a reasonable question to ask is 'how did the industry arrive at this problem?' The legacy of this lies in the development of interactive television over the years. In the 1990s, simple systems made it possible to run interactive services on low powered set-top boxes.

This provided a standard environment in which developers could write set-top software independent of the make or type of box. However, this was less attractive to content developers, as continuous software development was required, leading to huge costs.
The answer to this was to deliver both content and operator applications using HTML and JavaScript, effectively dispensing with traditional application development as all key functionality would be available through Web pages. Whilst this provided great flexibility for content owners, it is the source of problems for the platform operators because current set-top boxes (STBs) are too low powered to utilise Web processes.

Content developers face a challenging situation: no standard platform for content to benefit from economies of scales and an installed hardware base too slow to accept faster technologies. Compatibility across networks has been lost and with it the ability to maximise revenues. If this issue is not solved, the industry will not be able to progress and operators will face continuing challenges and costly development programs.

A standard year?

2002 does look like it may be the year when this impasse situation could be solved, however. One issue in relation to a standard platform looks like it may be on the verge of solution, with the introduction of MHP (Multimedia Home Platform).

There have been substantial deployments of iDTV worldwide and there is a vested interest in finding a solution. There are encouraging statistics that users are impressed by the first enhanced services they have experienced and want more. These factors are going to be crucial in justifying the deployment of a standard such as MHP, as it is inevitably going to be a costly development.

In theory, widespread adoption of MHP should end the headaches for content developers and platforms alike. MHP supports an application model, based on Java, which should create a worldwide market in standard platform applications like EPGs, VoD clients and mail clients. A standardised browser running as an MHP application can support low-cost content development.

Further, the auspices for the standard look good. Although MHP is an European initiative, the last few months have seen growing international support. It is perhaps important to note that the mobile telephone industry only started to become mass market once a worldwide take-up of the European GSM standard was underway.
Although MHP does look like the answer, it is not a solution that is going to have immediate impact on the economics of the iDTV market. The reality is that the majority of set-top boxes already deployed in consumers' homes are not capable of running MHP. It is a more expensive box that will be able to take advantage of the true benefits.
The cost of replacing all current STBs will be immense and may well have to be borne by the operator. This means that the deployment of an MHP platform will not be either economically or practically possible in the short to medium term.
This situation leaves the industry with two challenges:

• Can MHP be agreed upon as an ITV industry standard?
• What to do in the interim to keep the industry moving forward?

The future

In the long term, the industry must standardise or face the possibility of a static market that is in no position to generate sufficient revenues to sustain its existence. Efforts should be made in the imminent future to agree a standard in order to start implementing a strategy towards a long-term achievement.

By agreeing and deploying a standard, the economics of iDTV will start to develop and become truly viable. The more standardised content can be, the more channels it can be broadcast on, the more revenue it can generate. It goes without saying that the more attractive the content, the more likely it is that subscribers will want to watch, use and interact with it.

In the meantime, however, the industry needs to find a solution that can speed up existing STBs without changing the hardware. It needs to find ways to deploy content and technical updates quickly and efficiently, enabling the delivery of more interactive and sophisticated programmes. In all of this, the customers experience must be paramount.

The time between now and the deployment of a standard platform will be best spent improving the service for current consumers and identifying ways around the shortcomings of the STB hardware already in place. This is achievable and there are some products that are already beginning to emerge that may well hold the answer for this issue.

The interactive digital world is well aware of the problems and potential solutions available to the chicken-and-egg situation currently faced. The task is to unite as an industry to agree a common platform standard that will enable viable economic achievement and growth, or face an uncertain future. 2002 will very likely become the year in which interactive TV comes of age, if only in agreeing as an industry to work together for the greater benefit of the future.

top