Broadband: Home-Delivered Video

by Roger Wyatt
Summer/Fall 2002

The technology of broadband video takes your favorite movie from the server to your living room TV set.
It used to be that big-screen movies, videos, cable and telecommunications were all comfortably nestled in their own well-defined niches. As consumers, we could tell them apart and all was well with the world. You can forget about all that now. Once again, the forces of digital convergence are on the move, mixing things up and inventing the future of home video viewing in the process. Imagine having access to every movie ever made, at any time and at extremely high quality. How is this possible? Good-bye video store rentals and hello Internet broadband video-on-demand (VOD). How is this possible? Is there an echo in the room?

Convergence
Starting at the beginning, convergence is the means by which technology and content merge and morph into innovative processes and products. From an industry perspective, it's sometimes hard to tell whether that convergence is a public embrace or some company trying to throttle another. Throw into the mix a heady brew of broadband services over both cable and satellite, video-on-demand along with a dash of interactive TV, and we're looking at some serious convergence.

To make it more interesting, let's not forget folks from the Hollywood dream factory the producers and the studios. Recently, MGM, Paramount, Sony Pictures Entertainment, Vivendi Universal and Warner Bros. announced a joint VOD project to stream movies, first-run and old, to broadband users. From across the communications and information media spectrum, companies are reaching out and forming all sorts of broadband streaming video alliances. Cable's rivals, the satellite broadcasters including EchoStar Communications' Dish Network and DirecTV, are moving into VOD. AT&T, Comcast, Cox Communications and Time Warner Entertainment are gravitating toward delivering video-on-demand. Cable companies hope to move beyond basic cable TV service into the profitable world of advanced digital communications including VOD. This is convergence in fast forward.

Today, more than 5 million broadband households have created a market big enough to support a VOD system. And, according to a Jupiter Media Metrix analysis, broadband is going to grow. Whether by cable, satellite or DSL, it's estimated that by 2006, 41 percent of all United States online households will subscribe to a broadband Internet connection service.

So, we've got bandwidth, what do we do with it? Is the expansion of broadband creating a market for VOD or is VOD creating a reason to step up to broadband? It's hard to tell.

Some predict that the VOD market can become a $9 billion a year industry. However, not everyone thinks broadband video on demand is such a wonderful idea. These new distribution channels can be a big threat to video rental chains, which as intermediaries between movie and customer, may end up being bypassed. VOD could end up causing the end of video rental stores as we know them. On the other hand, Internet-delivered VOD could be a major booster of recordable DVD-producing PC sales.

Getting There
How do you stuff a movie onto the 'Net? In a word: compression. At present, the broadband 'Net can accommodate video-on-demand streaming at near-VHS quality (albeit VHS with compression artifacts). For example, RealVideo G2 encoded at 320x240 for 300Kbps streaming appears adequate when viewed at full-screen. Compression techniques and quality will continue to advance. Advanced codecs for Apple QuickTime from or Microsoft Windows Media, MPEG encoders, wavelet algorithms and other compression methods will eventually deliver a pleasing full-screen viewing experience over broadband. And this is just the beginning. Remember Moore's Law. In the 1960s, Gordon Moore, co-founder of Intel and co-developer of the computer chip published his famous law that stated that computer chips double in capacity every 18 months. For decades, Moore's Law has been applied to everything digital and for more than 30 years it has held remarkably accurate. Given this, it's merely a matter of time until broadband video-on-demand has the specs that rival those of HDTV.

For instance, On2 Technologies (www.on2.com) uses VP4 compression for up to a 15 percent reduction in bandwidth usage. Last summer, On2 posted Sleepaway Camp, a feature-length cult film on its Web site, proving that a company was able to deliver streaming video at acceptable quality levels. Clearly, quality of download vs. speed of download will become a major selling point between competing VOD services.

Transmitting costs for a typical two-hour movie over broadband runs around $5. That's about $2 more than most of us pay for a video rental. However, faster downloads due to new compression capabilities drops that cost to about $1.25.

By using compressed video and audio streams, regional phone companies and others can reach more customers, use less bandwidth and provide higher quality service. Selling VOD over broadband could be an incentive for telecommunication companies to provide increased DSL service rather than shutting them down.

Players and Wild Cards
With all this multi-industry focus, VOD services like MeTV, iFilm, and BMW, films are sprouting up all over the media landscape. Intertainer (www.intertainer.tv) is another new VOD service. It is widely available in 35 cities and growing. Taking convergence to another level, Intertainer has now partnered with Internet portal giant MSN.

Partnering with Goliath Microsoft means video delivery by means of Windows Media Video 8 codecs. For a high-quality viewing experience, Intertainer encodes all videos at a minimum of 500Kbps. This becomes a value-added proposition that takes advantage of the viewer's broadband connection. This is especially true when the customer watches the download stream in full-screen mode. Additional benefits from partnering with Microsoft include promotion and marketing. Intertainer will be prominently displayed on the MSN Web site and featured on windowsmedia.com as well.

By means of comprehensive licensing agreements, Intertainer can offer first-rate content from a variety of Hollywood studios including Universal, Warner Bros., Dreamworks SKG, Artisan Entertainment and New Line Cinema. Through various television and recording company agreements with NBC, A&E, Discovery Channel, EMI and Warner Music, Intertainer can now offer a wide range of films, programs, music videos and more on an on-demand basis.

Consumers will have to consider the costs of these services. For starters, let's look at Intertainer's pricing models. To access the VOD service, a viewer first subscribes at $7.99 per month to FirstPass, which provides basic TV and music content. For an additional $3.99 (older movies are $2.99) subscribers can access new releases on a pay-per-view basis. There is also some free content and film previews, so potential subscribers can try out the service before deciding to buy.

Another VOD service, CinemaNow, offers a different subscription model. Its service, Premium Pass, is $9.95 a month and offers users downloadable films and pay-per-view movies. Viewers don't have to subscribe to the service in order to watch pay-per-view movies. Clearly, as these services emerge, customers will have to carefully compare various pricing offers in order to arrive at the optimal streaming viewing solutions.

The Speed of Progress
In the end, the play's the thing. But does great content motivate consumers to buy into these services? Consider that by today's standards, 500Kbps is such a high bit rate that it could limit Intertainer and other VOD providers from access to their audiences. Here's a little reality check. When one averages the speed of all deployed modems in the United States, ranging from 28.8KB slowpokes to broadband speedsters, what emerges is an average modem speed of only 34Kbps. Those VOD services that offer a wide variety of content over the public Internet, even for those with 56KB modems, will be very competitive. For example, CinemaNow keeps its broadband content to a relatively low 300Kbps. Whether name-brand content or ease of access and innovative offerings become the deciding factors in consumer acceptance of these services remains to be seen. One wild card is how fast experimental efforts like the high-speed Internet 2 move into widespread public service. If that happens quickly, then a 500Kbps-compression rate will become a non-issue.

Another factor is DRM (digital rights management). It's the key to continuing film studio participation in VOD. Can you say Napster? That single word conjured up visions of horror for film producers. They watched in terror while the public downloaded record label music with impunity from peer-to-peer networks such as Napster and Scour. Not too long ago, movie moguls hesitated to provide distribution content for the Internet for fear that the same thing would happen to them. However, in recent years, there has been great progress in developing effective DRM software. Software development is a very dynamic industry, but for that matter so is the hacker, cracking industry. If cracker technology becomes so effective that the studios no longer believe that it provides adequate protection for their products, they will abandon VOD and leave a lot of consumers and companies in a lurch.

Bringing it all Home
Now that all this broadband video-on-demand content is streaming your way, how do you get it on your screen? Where do you store it? For starters, you need a Broadband Internet service provider a service that offers a way to put a broadband signal in your home. These include cable services like Roadrunner, DSL services like AT&T Broadband, satellite dish providers like DirecTV, and many others.

You could set up a home gateway based on a cable modem or DSL modem to provide networking capabilities to digital devices, and TV sets your home. You would store video content on high-capacity storage devices, such as video servers or personal video recorders (PVR) like TiVo. In a pinch, a desktop computer with a very large hard drive would do.

Connections
From there, three viewing alternatives emerge. Possibility one requires placing a PC in the living room with a standard video output to a TV screen. A variation on that would be to provide a digital signal to a VGA/TV monitor. All the search, download and play functions would occur in the living room.

A second approach involves working with a PC located in a home office. That machine would be configured for wireless audio/video transmission to a TV screen in the living room, family room, bedroom or any desired place in the house. Apple's Airport wireless transmitter is only one of many wireless transmission products offered in the market today. With this approach, all search, download and play functions would come from the home office, but viewing would take place in the living room or any other room in the house.

The third viewing possibility involves two networked PCs. One would be located in the home office and the other would reside in the living room. An Ethernet kit or a Wi-Fi (IEEE 802.11b) can easily do this. This route has the search and download functions performed in the home office, but files would be transferred to the living room PC and played from there. With these alternatives, plan carefully and choose the method that is best for you.

Future Promise
What does the future hold for the viewer? A pervasive around-the-clock, customized viewing environment. No longer will viewers be dependent on the current stock of video rental suppliers. It is possible that AI (Artificial Intelligence) consumer service devices will develop to trawl the 'Net looking for viewer-specified content at the best price. If consumer authorized, the AI agent could complete the transaction and supervise the download of the content to the viewer's hard drive in a home server or PVR.

With access to this much content, viewers will certainly require in-depth content guides to guide them in their searches through the worlds' holdings of every moving image ever made. Full speed ahead.