Interview with Tom Rosenstein, Vice President, Business Development, SeaChange

ipTVnews talks to Tom Rosenstein about middleware and the global IPTV market.

How does your middleware reflect the cross-service needs of operators?
What we have tried to do is build very modular middleware. If you look at middleware as it is defined by many of these companies in the States, it is the end to-end solution for delivering a TV service, so it can pick an operator who doesn’t do any video, and give them everything it takes to launch their service. The other extreme is you go to an operator who already does broadcast services and needs to support a new application like on-demand services. What we try to accomplish with our middleware is being able to address those markets, so if a certain customer has a preference for video on demand server or a billing system, operational system that they have already invested in, we don’t require them to throw it out, we try to make everything open and modular and that is an important selling feature for middleware, because everyone has very strong opinions of what they have already deployed and they don’t want to have to throw it out.

How do you monitor the level of Quality of Service and Quality of Experience (QoE), in terms of being able to compete with cable and satellite?
That is really important because if you are not as good as cable, no-one is going to buy your service. What we have done is within our on-demand and middleware products, we have components that can talk to network resource managers. So essentially, all these operators who want to do video, voice and data, depending on how much the customer pays, for example in video only, we want to make sure that the video quality is serviced so that the person, who has just paid to watch the movie, is always preferred traffic over someone who watches a free video on demand service. We work with companies like Juniper and Cisco to make sure that we are creating a user-issues-play, before we bill them, before we put something on their credit card, we have gone back and forth in their network to make sure there is enough bandwidth and allocated the network resources appropriately. If someone comes in and wants something and we cant deliver it to them, they will reject the request and work with the operator and try to address that in the network.

Specifically, what capabilities does your network PVR have?
We give the operator the opportunity to get rid of putting that expensive box in the house, and put everything in the headend, so that ultimately all the channels are recorded and available for any user to come and watch at any point in time. There are physical limits that, you can’t store everything forever, some operators have a two week window, where they don’t record every single channel, the only record popular ones. We also have a product that works with the operator to overcome licensing issues. A lot of broadcasters will not allow you to record their channel, so what we have done is we have built a tivo product for the operator so that they can go and negotiate deals on a case by case basis and record just the channels they have rights to and make those available to the customer. So we have got a range of solutions that will allow the operators to do whatever the course, the licensing allows them to get away with.

When looking at the global marketplace, is there a trend in how your middleware has to be adapted depending what market you are offering to?
There is a huge trend. Just to give you an example, right now we are doing some IPTV solutions in India and the cost of the set-top boxes that they are deploying is very low, so the memory footprint is very limited. So we actually have a client solution in that environment that can address the cost and the capabilities of the restrictions of the set-top box. Go over to Europe and it’s a little different, the operator will pay a lot more money to get full feature box, so we can offer client middleware that will do all of those things that we talk of. You go to India, you get a restricted amount of applications that you can do, but it works and it can be sold and it can have the right type point for the customer base.

Which markets can you define as having the most potential in IPTV?
Europe seems ready to go and grow. Europe, because of the regulatory issues here allowing people the lease lines, the full operators allowing IPTV services, that is going to bring all these new market interests in that will have effectively no capital and share IPTV resources at a headend with other companies that offer a branded service. I think that is going to cause this market to grow pretty quickly. The US will do ok, companies like Verizon is doing quite well, but the issues are different, cable is very entrenched in the US, so I think we will see over the next four years, telcos that get into it will have to get more aggressive about advanced personalised features. In Asia, I think we are seeing countries like China being a little slow to grow in telco, cable is growing faster, and obviously regulatory issues still exist, like who gets rights to the content, so I cant really say how that is going to end up working out.

When looking at IPTV in the UK, it is hard to say, BT has not aggressively started to market their IPTV service. We are certainly seeing Virgin trying to become more of a branded video service, versus a cable operator and I think between them and Sky, with the competition focused on those two, it is going to be harder and harder as BT gets late to the market, for them to take away customers from those two incumbents.

When looking at the IPTV market in general, how far do you think it has come over the last few years?
I think the market is generally not where a lot of people thought it would be as we have been hindered by a number of issues. To name one example; the availability of set-top boxes, which seems to have finally come around, because without a decent set-top box you cant record anything, so that has been a hindrance.

So all the predictions that have been made about the potential subscriber success for IPTV, is it really going to be as big as people are predicting?
We look at the research and we see a range. Some analyst firms are predicting 20million subscribers, others are getting around 9million. To be honest I don’t think the answer is going to be either, I think what you will end up seeing is people deploy IPTV services, they are going to run into cost realities, network limitations that will cause them to do hybrid solutions. So incorporate satellite to broadcasting and do on-demand over a DSL line and then they’ll change as the technologies mature and costs drop down, to do more fully on-demand. I think that by 2011, we are going to go you could say 4million, or you could say 40million, depending on how you want to count it.