Interview with Mark Rooney, Head of IPTV, Pace Micro Technology 

IPTV, Set- top Boxes and the future of the connected home.

Pace Micro Technology is celebrating its 25th Anniversary. From its inception in 1982 as a start-up based in the North of England, focusing on cable modems and software, Pace is now a major player in the global set-top box market. To date Pace has shipped over 27 million set-top boxes worldwide. Amongst other things, Pace has launched DVB satellite and cable services, deployed payTV PVR in Europe and H.264 DVB-S2 set-top boxes, as well as developing IPTV and DTT set-top boxes in the UK.

A key theme has emerged where it is important for Set Top Boxes (STBs) to increase hard drive size for PVR and VOD purposes. What capacity does Pace STBs have and how does this compare to market competitors?
I think the question here is how long a piece of string is! Basically operators are asking for higher than we are capable of doing. In the market we are moving towards about 500 gigabyte this year, by the end of the year and in fact already there is talk of a terabyte. The movement is going towards, as it did with the computer industry and continues to do. The question is at this point, what are the operator requirements and the consumer requirements? What we have seen so far is we’ve gone from 40gig to 80gig, 150 gig and we are going to continue along that route, the technology is there now.

Hybrid STBs
There are really two forms of hybrid, in everything with iptv, it boils down to definition. The first type of box is the pure IPTV box, which is really dependent entirely on the service for IP. It may be in that case as the online has done or as BT has done, they decide to put additional programming from the DTT service so it is a pure IPTV box and it’s got a DTT front end. The second type is where you have a payTV operator who is cable or satellite who decides they want some level of interactivity. The difference between the two is that if you unplug an Ethernet port in a pure IP box it will cease to function. Whereas if you unplug the Ethernet in the hybrid cable or satellite box, it will still function, but you just won’t have the level on interactivity.

To what extent is the take up hybrid STBs determined by geography?
The whole PayTV element has a lot of geographical focus. I think what will happen is successful  PayTV operators on satellite for example will be increasingly looking for a more efficient way of developing the interactive and clearly having that Ethernet port, having some kind of back channel that is driven by IP, is becoming increasingly important.

So what you have actually got with all these areas is the major PayTV operators increasingly looking into how they can drive interactivity and what they can do with that. Clearly we are in a strong position because to do that you need expertise not only with DTT but also with IP and a combination of the two. So the answer is; geographically it will depend on where the major operators want to do and decide to do what they want but technically it is going to become increasingly important and I think by about 2010, over 50% of all IP boxes will be hybrid in one form or another.

How do your STBs enable successful triple play and even quad play?
The success of our offering is really that you have to have all the elements together, so particularly the video, the data and the voice all have to be able to work together.

Where Pace comes from is we understand the various changes within that, because we have come from both DTT and IPTV, we understand what is necessary to make it all fit together and that is the key, it is not just the STB itself, it’s the product of all that knowledge and all that integration and making sure that when the operation goes live it all fits together beautifully.

What we have got with multi-dweller is that one of the biggest barriers in triple-play is the position of multi-dweller, people who live in multi-dweller units and it is something like over half the people in Europe for example, live in multi-dweller units. Often they are restricted by what they can and can’t do, for example their apartment doesn’t face the right way for the dish, or their landlord wont let them put up the dish or their cable operator doesn’t go there. So they are actually restricted in what they get. What the Pace multi-dweller does is put in a device in at the entry point to that unit, it actually enables, down that old copper wiring, the ability to offer voice, data and video and the full triple play, which then can be picked up by any of the people in the multi-dweller unit and they can get all the services. For the operator this means that with analogue switch off, they can actually go back to those end consumers that couldn’t get triple play due to say an old building not due for re-wiring in the next ten years or so, and offer them not only the same television service, but also voice and data with it. So they can keep the consumer. And when you are looking at telco operators it is very important that they keep their existing customers in their database. This is also true for satellite and cable. So what really what it does is just enables the operators to keep the customers that they would otherwise have lost with analogue switch off.

Will cable and satellite hinder IPTV, or help drive the market forward?
No doubt that cable and satellite operators aware of IPTV and the exponential growth, will offer very compelling competitive offerings. So I would say that all of them are going to be really driving to make sure, in their market that the consumer doesn’t churn from them to IPTV and IPTV operators. So in that sense I think we’ve got the view that they are competing. It may be that in part of that competing, there are areas that for example we see with the cable operators who take some of the satellite programming and so forth. So there is this kind of cooperation within it, but ultimately they are competitors and they are fighting for the same end consumer. 

Can Internet TV and IPTV co-exist? And how can popular internet TV services, such as user-generated content (UGC), be exploited using IPTV?
I think the first thing is that again, it is down to definition and very often IPTV and internet TV have been used interchangeably. IPTV has a formed user group and has a geographical focus, it really is operator-led and precise quality is an important concept. Online video is at the other end of the scale, so for example if you wanted directions to come to here, you would go on a website and you would read the directions, you wouldn’t expect to pay for that. If you wanted to read a novel, you would buy a novel and you would recognise that you’ll pay.
I think internet TV and IPTV can co-exist and I think that what we have seen particularly over the last 12-18months, is a blurring of the edges because from a user-generated content goes into the low quality plethora of content. What you have actually got is an opportunity for IPTV operators to embrace it and I think that the special PTV operators will be the ones that actually have within their content offering some element of online video and user-generated content. I think the two can co-exist comfortably with each other and they are not either or. You are not going to get high quality TV programs, high quality live sport at that bottom end and at the same time, UGC in itself, develop a whole host of niche areas and a whole host of charities, organisations, all beyond the internet TV really is moving from the static webpage to video. And actually it is going to work very well together I think.

With regards to content, I think that the Blockbusters will remain with IPTV, I think with UGC and online video, you will just get a lot of different qualities, different levels of professional, semi-professionalism within it. Having said that I think you will find that the bar at the bottom rises, now people know to buy a high definition camera, so the bar will be continually be raised, so at the bottom end you will still get some very good material. And the other thing is that it is not just IPTV that we are plugging into, mainstream TV is actually for UGC more and more, asking people to send their photos in, asking them to send their videos in. So IPTV will be no different than that. Niche access and niche content will be bolstered by that.

Is the Home Network more favourable to IPTV? In the future, will the home network be based entirely around an IP connection?
Basically we have got IP as the active point into the home, it makes sense to have IP around the home and home networking will rely on the greatest IP connected devices in the home. So naturally you have got IP coming in, you have got IP within it, a complete end to end solution via IP. So the home network really lends itself to IPTV. Not saying that cable and satellite couldn’t do it, but there is a nice fit for IPTV.

So what does that mean for the IPTV market?
It means that, if you are an IPTV operator, and bare in mind IPTV is still relatively fledgling, and you are getting people to migrate towards having a done terminal to get their programming through IP, what will then happen is that done terminal ceases to be something that sits at the end of that network and will then become something which then enables service capabilities around the home. So the next step from doing that, from that terminal in the home, is you will then have perhaps eight PVR, 500 gig hard disk drive sitting there, but only residing in one place in the home, with a lot of things line to smaller boxes around distributing so that I can go in and I can watch, in any room in the house, what’s on the PVR, I can download or receive the pictures, I can store everything in that one place watch channels anywhere in the home. And all that will be delivered IP. I think by 2010, there will be about 350million IP connected devices, suddenly we are going to have IP cameras, a percentage of that is going to be IP mobile, the technology already exists for IP fridges telling you when you have run out of food and perhaps even recording goods that have been finished!

The thing is that there are always people who like convergence and having different things all over the place, but the reality is convergence from having things all together in the home, but only if the consumer wants it. The thing about IP and the IP connected devices is the consumer will probably fill a lot less band speed involving connected all together and all sitting together. There is a reduction of the number of wires, the fact that people don’t have to sit in one room just to watch what is on the PVR. So IP and IP around the home and the fact that we now get used to things being watched over many different devices, in many different places and in many ways, and IP lends itself perfectly to that.