Reports, MRG Multimedia Research Group, Inc.

Internet Video

for IPTV Service Providers

Quarterly Technology & Content Report - September 2007

Published by MRG, Inc.
September 2007, 134 pages

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Executive Summary

Internet Video is a conundrum for IPTV(1) service providers. On the one hand, most IPTV service providers also offer high-speed Internet service, and video sites such as YouTube and Joost fuel a heavy demand for broadband. On the other hand, Internet Video competes with IPTV for viewers, and with the advertising revenues that come from those viewers. So, is Internet Video a threat or an opportunity?

In this report, we come down firmly on the side of opportunity. The fact is that watching video has become an integral part of Internet usage for most people. According to the Pew Internet & American Life Project (2):

The majority of adult Internet users in the U.S. (57%) report watching or downloading some type of online video content, and 19% do so on a typical day.

Almost three-quarters of broadband users (74%) who have high-speed connections at both home and work watch or download video online. For those who have high-speed access only at home, 66% report online video consumption, compared with 39% of home dial-up users.

Roughly one in three (31%) Internet users ages 18-29 said they watched or downloaded some type of video on a typical day during the period of the Pew survey. By comparison, 18% of Internet users ages 30-49, 12% of those 50-64 and 10% of those 65 and older watch or download any type of video on the average day.

In short, Internet Video isn’t going away. So, how can IPTV service providers take advantage of that viewership?

Typical Internet Video Website Architecture

There are Internet Video broadcast services in testing and small-scale deployment. Most of these services focus on sending video to PCs, although some are deploying their own set-top boxes. We don’t believe that either option will represent a major threat to IPTV service providers for several years, because of the business issues related to distributing high-quality licensed content over the Internet.

In short, Internet Video represents a remarkable opportunity to IPTV service providers to expand their audience, generate more advertising revenues and hold onto subscribers once they acquire them. This report is intended to help IPTV service providers to understand and implement their own Internet Video services.

(1) “IPTV” in this report refers to video services distributed over a managed IP-based network; “Internet Video,” on the other hand, refers to video delivered on the public Internet on a best-effort (unmanaged) basis.

(2) Source: Pew Internet & American Life Project Tracking Survey, February 15 – March 7, 2007.

This report is part of the IPTV Tracking Service published by the Multimedia Research Group, Inc.

Table of Contents

1	Executive Summary

2	An Introduction to Internet Video
2.1	Internet and “Over-the-Top” Video
2.2	“Bottom-Up” vs. “Top-Down” Services
2.3	Broadcast (Live) vs. Video-on-Demand Services

3	Applications of Internet Video for IPTV Service Providers
3.1	Key Considerations
3.2	Points of Differentiation
3.2.1	How Else Can You Differentiate Your Internet Video Content?
3.3	Frequently Asked Questions—How IPTV Service Providers Can Exploit Internet Video Services

4	The Technology of Internet Video
4.1	Getting Video Content Into the System
4.1.1	Upload and Tagging
4.1.2	Ingest
4.1.3	Transcoding
4.1.4	Indexing
4.1.5	Review
4.1.6	Search
4.1.7	Discovery
4.1.8	Comments
4.1.9	Advertising
4.2	Interactive
4.2.1	Serving
4.2.2	In-House Servers vs. CDNs
4.2.3	Display
4.2.4	Syndication
4.3	Vendors
4.3.1	Platform Suppliers
4.3.2	Transcoders
4.3.3	Real-Time Encoders
4.3.4	Video Content Management
4.3.5	Content Distribution Network (CDN) Services
4.3.6	Content Protection/Digital Rights Management
4.3.7	Advertising Management

5	Threats and Responses
5.1	What’s the Current State of the Art for “Over-the-Top” Internet Video?
5.1.1	Content
5.1.2	Quality of Service (QoS)
5.1.3	Quality of Experience (QoE)
5.1.4	Broadcast vs. VOD
5.2	How Can IPTV Operators Compete with Internet Video?
5.2.1	Content
5.2.2	Quality of Service (QoS)
5.2.3	Quality of Experience (QoE)
5.2.4	Broadcast vs. VOD
5.3	What’s Coming Next?
5.3.1	Broadcast to PC Services
5.3.2	Broadcast to Set-Top Boxes
5.3.3	Additional Bandwidth

6	Appendix 1: Current TV
6.1	Current TV Web Site
6.1.1	Web Site: Designed to Help Contributors
6.2	140TB of Storage, 1.7 Million Files
6.3	The Current TV Workflow
6.4	Current TV Broadcast Center
6.4.1	Current TV Control Room Runs From Servers
6.5	File-Based Network TV
6.5.1	File-Based Approach Key to Simplicity
6.6	Communications & Storage Center
6.6.1	Remote Production Control – London, L.A., S.F.

7	Index of Companies

Table of Figures

Figure 2-1:	Verizon FiOS Electronic Program Guide
Figure 2-2:	Verizon FiOS EPG—Alternate Format
Figure 2-3:	Verizon FiOS Video-on-Demand Program Guide
Figure 2-4:	Joost User Interface Simulation
Figure 2-5:	Joost Channel Selector Simulation
Figure 2-6:	Joost Social Networking Widget Simulation
Figure 2-7:	YouTube Home Page
Figure 2-8:	Veoh Channel Lineup
Figure 2-9:	Veoh Series Lineup for NBC
Figure 2-10:	Veoh Episode Lineup for NBC’s “30 Rock”
Figure 3-1:	Cablevision’s Optimum Autos Web Site
Figure 4-1:	YouTube Video Upload Submission Page
Figure 4-2:	Audio/Video Formats Supported by Internet-Enabled PCs
Figure 4-3:	Google Text Search Results for “Panama”
Figure 4-4:	YouTube Search Results for “Panama”
Figure 4-5:	Truveo Search Results for “Panama”
Figure 4-6:	Everyzing Search Results for “Panama”
Figure 4-7:	Dabble Search Results for “Panama”
Figure 4-8:	YouTube Video Browsing Page
Figure 4-9:	Comcast “The Fan” Video Browser
Figure 4-10:	RottenTomatoes.com Review Page for “The Bourne Ultimatum”
Figure 4-11:	Video with Overlay Ad for “The Bourne Ultimatum”
Figure 4-12:	Trailer for “The Bourne Ultimatum” Playing in Video Window
Figure 4-13:	VideoEgg Player Showing Menu Options
Figure 4-14:	Video with Overlay Ad for “Hairspray”
Figure 4-15:	“Hairspray” Trailer Playing as Video Overlay
Figure 4-16:	Available Video RSS Feeds from USA Today
Figure 4-17:	CNBC Video Player (PC-Based)
Figure 4-18:	Telstra BigPond Movies Page
Figure 4-19:	Telstra BigPond Music Page (PC-Based)
Figure 4-20:	Lifetime Video Player
Figure 4-21:	Condé Nast Men.Style.Com Video Player (PC-Based)
Figure 4-22:	Teen Magazine Video Player
Figure 4-23:	Esquire Magazine Video Player
Figure 4-24:	Oprah.com Video Player
Figure 4-25:	Maven Content Syndication Options
Figure 5-1:	LiveStation Video Player
Figure 6-1:	Current TV Home Page
Figure 6-2:	Current TV Control Room, San Francisco
Figure 6-3:	Control Room Management Consoles
Figure 6-4:	Current TV Machine Room
Figure 6-5:	Current TV Remote Production Control Room

Table of Tables

Table 2-1:	Who Watches Online Video
Table 3-1:	Traffic Rank and Reach for Leading Internet Video Sites
Table 3-2:	Traffic Rank and Reach for Leading Internet Video Sites, Including Ziddio
Table 3-3:	Online Video Gets Social: How Users Engage
Table 4-1:	Number of Channels Available vs. Viewed
Table 4-2:	Functions Performed by Vendors' Hardware, Software and/or Services

Index of Companies

24/7 Real Media	Limelight Networks
Adobe	LiveStation
Advertising.com	Macrovision
Akamai	Maven Networks
Akimbo	Metacafe
Ant	Microsoft
AOL	Mirror Image
Apple	Motorola (Modulus/Tut)
aQuantive/Atlas	Mozilla
AT&T	MSN
Babelgum	MySpace
BBC	Nagravision
BitTorrent	NBC
Brightcove	On2 Technologies
Building B	Operative
BurstMedia	Optibase
Cablevision	Oxygen
CBS	Panther Express
CDNetworks	pownce.com
Cisco (Scientific-Atlanta)	RealPlayer
CNBC	Revver
Comcast	Rhozet
Current TV	Roo Networks
Dabble	RottenTomatoes.com
Digital Fountain	SecureMedia
Digital Rapids	Sky
DirecTV	Sun Microsystems
Dish Network	Telestream
DoubleClick	Telstra
EdgeCast Networks	The FeedRoom
Envivio	thePlatform
E-Planning	Thomson/Grass Valley
Ericsson (Tandberg Television)	Thruport AdJuggler
Espial	Time Warner
Everyzing	Truveo
Eyeblaster	ValueClick
Falk eSolutions AG	Veoh
Firefox	Verimatrix
Fox	VeriSign
Google	Verizon
Harmonic	Viacom
Hewlett Packard	VideoEgg
Intel	Virage
Intermap/VitalStream	Virgin Media
ITVN	Vudu
Joost	Widevine
Kulabyte	Yahoo
KyLinTV	YouTube
Level3	Zattoo
Lifetime Television	Ziddio
Lightningcast

Internet Video for IPTV Service Providers — September 2007 is 134 pages and is available in a printed English language edition for $2,995 USD, a PDF single-departmental license for $3,495 USD, and is available free as part of MRG's IPTV Tracking Service. For more information or to order the report, contact Rob Smith at 408-453-5553 or rsmith@mrgco.com.

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