New content acquisition choices emerge to help US service providers speed time-to-market and cut costs. Service models offer alternatives to operators considering building their own headends. By Steve Hawley

Satellite distribution

To satisfy the operator’s need to quickly acquire programming and shorten the amount of time required to launch TV services to consumers, a new category of business-to-business service providers is gaining increasing visibility and, now, demand from operators: IPTV content aggregators using satellite to transport live TV programming bundles to Telcos for local distribution.

The cable TV industry has had this category of service for live TV, known as digital turnaround, for years, as exemplified in the US by the Headend In the Sky (HITS) service now operated by Comcast. In the IPTV world, the concept is sufficiently new that it doesn’t have a name, so this article refers to them as ‘IPTV satellite transporters’.

Not only do IPTV satellite transporters help solve content acquisition and time-to-market issues; they also help operators with heterogeneous networks (like Tier-2 Telcos in the US, many of which formed through acquisition), and Telcos in outlying areas where optical transport may be prohibitively expensive. Transporters also have close relationships with IPTV suppliers, allowing them to offer pre-integrated delivery solutions to their operator customers, including one or more choices of customer premises equipment, IPTV middleware, content protection and encoding systems. Further, they promote their solutions on the assumption that IPTV technologies are still a moving target and that their respective IPTV transport solutions reduce the operator’s exposure to capital equipment obsolescence.

Programme relationships

IPTV satellite transporters enter into direct relationships with TV programmers (content owners), which provide license to bring the content - network programming offered nationally and internationally - to a centrally-located encoding facility, and to encode it into digital format (MPEG-2, MPEG-4 and in some cases, VC-1), encapsulate into IP single programme transport streams, bundle into an aggregate, and re-distribute over a satellite transport network to the local operator (hence the term ‘transporter’). Then, any local operator can enter into an agreement with the transporter, receive the programming and approach the content owners only for license to distribute it to end subscribers. The operator supplements the programming obtained in this fashion with additional programming and advertising obtained locally. Hence, the operator’s headend consists of receivers for the aggregated pre-encoded content, plus a small number of encoders for the local programming.

Service categories

There are three types of IPTV satellite transporters: facilities-based transporters, which own and operate centralised headend facilities and satellite transport networks; non-facilities-based operators, which resell transport services offered by a facilities-based provider; and hybrids that own and operate some, but not all of the facilities - entering into third-party agreements to resell what they don’t own. Facilities-based satellite transporters include SES Global, Intelsat (which recently acquired PanAmSat), and France Telecom’s Globecast; all of which serve operators in the Americas, Europe and Asia. Another is Telesat Canada, a Bell Canada Enterprises company, serving the Americas. They sell both direct to operators and through resellers.

Intelsat’s Ampiage

Resellers typically have no headend facilities of their own but have relationships with the facilities-based satellite transporter that allow the reseller to provide programming to the local operator. Intelsat’s reseller offering, which offers a content encoding, aggregation and transport service in the United States, is called Ampiage. Two Ampiage resellers are Falcon Communications of Missouri and Content Services Inc of Oregon, both of which will offer Ampiage nationwide.

Hybrid transporters own headend facilities and have obtained the rights to encode and transport content for delivery to the local operator, but use a third-party for the satellite transport. One example is Auroras Entertainment of Montana, which uses Telesat Canada’s network to deliver IPTV to local operators. Another is the alliance of the National Rural Telephone Cooperative (NRTC), which has the content deals, and SES Americom, which provides the satellite transport.

Service models

Because the IPTV transporter business is so new, it is not known which of these three service models will gain most traction. This is made clearer by comparing companies representing two of the transporter models: Auroras Entertainment and Broadstream Communications. As the IPTV enabling technologies have evolved - most notably, MPEG-4 and HDTV capabilities - both will be offered by these transporters. Consequently, both these and others have come to believe that the time for this service model is now. Auroras has taken the hybrid approach and has built a centralised headend in Atlanta, Georgia. Aurora’s CEO Diane Smith believes that IPTV will go through three phases. Phase one is about getting systems operational and replicating cable and Direct Broadcast Satellite. Phase two, dawning now, adds new functionality like social networking and games, which today’s networks can handle, but software is just beginning to enable. “Phase three is ‘Beyond….’ It’s the on-demand, all the time, anywhere world,” she says. Ms. Smith believes that although most Telcos have deep pockets, most are not philosophically equipped to move through these phases.

“We want to take Telcos from a mentality of ‘we have 98% market share for voice’ to a mentality of ‘we offer the best full range of communications services.’ It’s a very resource-intensive process and it’s ongoing. It’s not about networking, it’s about a vision,” Ms. Smith says. Auroras will launch its service before the end of 2006. By contrast, Broadstream Communications had tried to launch in hybrid mode, but announced in March that it would partner with Intelsat to use the latter’s satellite network and headend in Maryland. For several years prior, Broadstream had utilised a headend located in the state of Washington, and distributed content over the SES Americom network. However, virtually all of the early IPTV service providers were either building their own individual IPTV facilities or partnering into multi-operator consortia to build shared facilities. Many of them already had access to TV content by virtue of existing deals with the National Cable Television Cooperative (NCTC) because they also operated cable properties. For that and other reasons, Broadstream never announced any production deployments, although it had been engaged in trials.

Commercial launch

Although Broadstream will begin to offer transport services commercially to US-based operators in September 2006, Intelsat provides Broadstream the option to expand into non-US markets later - although no such plans have been announced. But there is another reason: cost. “The fact that we no longer have to manage our own facilities wipes out all of the operational risk for Broadstream,” according to co-founder Jay Stark. “This allows us to focus on implementation and professional services at the customer site.”