Yes TV - the proof is is in the pudding

June/July 2002

While many companies claim to be at the forefront of digital multimedia convergence, fewq have better credentials than Yes TV, which has been operating IP-based Broadcast TV and Video-on-demand services for many years. Broadband caught up with the company’s CEO, Thomas Kressner, to discover ist secret of success

Can you give me a brief overview of the company?

I founded the company in 1996 with my CTO who believed that IP would come to dominate everything, including the TV. I was to establish the retail operation enabling us to gain customer ownership. We would then focus on interactive services like VOD and then we would take over the running of the platform on behalf of the client.

In 2000, we tried to float the company but, unfortunately, the market was not there for us. Since 2000, we have changed the whole structure of the company. We are today what we call a ‘white label partnership for operators of digital platforms using broadband networks’.

What exactly does that mean?

We are a technology supplier; we supply a digital entertainment platform, which can be used for multiple devices. We are the only company that has launched a fully commercial digital IP-based platform streaming to the TV, including broadcast TV, VOD and Web access – which we launched in February 2002 in Hong Kong. We are also the application suppliers to Kingston Interactive.

We started on the TV side, but today we have a number of products. One is the retail product, which can go into the homes of residential customers, but it is not labelled Yes TV; we are the application provider. We also focus a lot on the hospitality side, which includes hotels, hospitals and multi dwelling units. Additionally, we are looking into the PC space because we believe there will be a need for our software applications in this market. Furthermore, we are potentially looking to go into the mobile space, which includes mobile phones and PDAs.

For a small company, that is a lot of sectors to address. Aren’t you spreading the company too thin?

It sounds like a lot to focus on, but remember that with the digital entertainment platform that we have today, we are seeing and solving exactly the same problems that all operators have everywhere - content management. And we have potentially one of the most efficient content management systems in the business. To give you an idea of it, we have over two and half thousand hours of content in Hull in the UK and we have got only two people managing that, which I believe is unparalled.

Back in 1996 when we launched our service, it was more about just supplying a solution. Today, however, it is more a question of supplying the cheapest possible solution. Over the next two or three years, VOD will be probably be something that every cable and ADSL customer will be able to provide. Therefore, it is about becoming the lowest cost producer and enabling operators to keep their cost as low as possible. We also have a lot of experience of content and we have a media division in Yes TV that acts a consultant to operators.

Who would your ideal customer be?

It really depends. If we look at the ADSL television product, then telcos and pay TV providers would be ideal customers. If one day Sky decides that it wants to go over ADSL then, of course, we would be extremely keen to sell our white label platform to the company. When we talk about the hospitality side, then we are marketing our services together with network integrators to offer our VOD services, for example; then the hotel chains become out ideal customers.

On the PC side, any dot.com that has any video content that it needs to manage is someone that we would definitely like to speak to. And then, of course, the mobile phone operators that want to stream video to the phones. We have a very broad range of potential customers because we have chosen a very open standard for our platform. The critical thing is, however, that there are very few companies that can show services up and running in commercial deployments.

Who are your main customers?

In the UK, our main customer for VOD is Kingston Communications, which is the largest ADSL provider of a multi-product. The company offers broadcast TV and VOD. On the hotel side, our customers are mainly coming from the US and then we have one or two important ADSL customers in the Far East.

How is that you do so much business in the Far East?

We found that Hong Kong was the only market globally that any commitment to roll out ADSL with a bit rate that we can use. We did not choose Hong Kong because we like Chinese food; we chose it because we have to go where the networks are. And this is now why we are in Japan because they believe here that there are going to be potentially 10 million ADSL customers, which is an enormous amount of potential users.

What about South Korea, aren’t they leading the world in ADSL roll out?

I would probably challenge that today. I think that Japan is coming very close to them; also the problem we have seen in Korea is that the bit rate that they are supplying on an average basis is not as high as you can get in Japan today. We need about 2.5Mbps for our service. Korea is important to us, but so far, we have not seen the deployment of broad enough pipes for us to utilise on the television side.

We are hopeful for the future with regards to Europe, but if you look at the UK, France, Germany or the Scandinavian markets, the only thing we have seen is just an enormous amount of delays. As a company, we can’t just sit and wait for it, we have to go where we believe we can find some business.

How would you define your strategy?

Over the last six years, Yes TV has developed a quality digital entertainment platform that we can utilise for multiple devices. We are a VOD company, but we are also provide applications for video emails, networked personal video recorders (PVRs); we are combining broadcast television together with Web access via the same interface.

It’s really that we are moving in the same direction as the TV customers. We are not a retail service, we are an enabler for operators like pay TV providers and telcos that want to get into this space. We started with the TV because that is the most difficult thing you can do because you need 24x7 quality of service, but we are now looking into other markets. We are not an end-to-end solution, we don’t do billing, and this is why we are working in partnership with system and network integrators.

Who are your main competitors?

We have a few main competitors, that is, on the global side. The problem is that if you group us all together, you have to ask how many of our competitors have commercial deployments - I am talking about tens thousand subscribers - then they really fall away. There is ImagicTV, which is focusing mainly on broadcasting, as is Minerva; the only one that has done similar things to us is Video Networks’ Home Choice in London.

But they do not sell their technology, they are a retail brand. So, it is difficult to highlight exactly who our competitors are. The problem that we have in our business is that a lot of people are claiming that they can do it, but there are very few who have six years experience running these things.

What are the most popular aspects of the your application from a customer perspective?

The most popular thing is the VOD application, where subscribers can go in and choose the movie they want to watch. Also, the ability to combine the interface, where you are watching your broadcast channel and then you move in to the VOD element is also very appealing to customers.

Are there any technical developments on the horizon that you think either threaten or enforce your position?

What we are starting to see, which is quite interesting, is that the wireless world is focusing much harder on trying to emulate the fixed network world. What I mean by that is that you are starting to see wireless and mobile LANs in offices, et cetara. And because of the almost total lack of deployments of ADSL, I think that wireless networks will one day become a major threat to ADSL. This is why it is important for us to be technology agnostic. We have had deployments over cable and wireless point to point – as long as its IP-based, we can do it.