Sunday, April 30, 2006

What is IPTV?

So many people have asked me what IPTV is about, that I have finally decide to write it down. Read on...

In IPTV, IP stands for Internet Protocol. In the world of networking, this protocol is the third layer out of seven layers that together create a complete network capable of transporting content from point A to point B on the Internet. This content can be text, pictures, voice, and, this is where our interest lies - video as well.

Although most people think understanding IPTV is complicated, the basics are very simple. At one level, all we are talking about is the transmission of a file from a server on the Internet (the same server that might also host and transport web pages) to a users PC. In fact it is not very different from the process of serving up web pages - with one exception.

In other words, and this is important, the transport mechanisms of the Internet do not care what you are transmitting. So, a video file can be transmitted in exactly the same manner as say, a web page (an HTML file). The difference of course is that a video file is going to be much, much larger than just about any web page, hence taking (you guessed it) much, much longer to move from point A to point B on the Internet (the exception I was talking about).

You know that famous phrase about a picture being worth a thousand words? True or not, a picture can take about a thousand times more storage than a word. Now, multiply that by 30 (the NTSC frame rate, 25 for PAL – if you are not sure, never mind approximations are OK) to get the amount of information in one second of video. Impressed? Now you can understand why everyone thinks transmitting video over the Internet is a “big” deal! It has less to do with complicated technology than size (i.e. the amount of information transmitted). Of course video files are compressible depending on the type of video in the file, but the point is that they are many orders of magnitude larger than almost any other file.

About three paragraphs ago, I said, “…a video file can be transmitted in exactly the same manner as a web page…” Luckily for me, I did not say “is transmitted”, and that gives me the opportunity to talk briefly about “Streaming Video”, which is often (incorrectly) used interchangeably with IPTV.

First, let me point out that there are many ways in which a video file can be transmitted over the Internet. And most methods of file transfer can be used with most files. The simplest and oldest method of transmitting files uses the File Transfer Protocol (commonly called FTP). A recent and very popular method called BitTorrent allows very fast transfer of files under some conditions – for example, it excels in peer-to-peer networks.
Streaming Video is a more specialized method of transmitting video files. In this method, a portion of any video starts to play in your video player (for example Windows Media Player or Real Player) while the rest of the file is being received. To do this the software essentially creates a “buffer” which fills up as the video is received. At any time, if the connection becomes slow or is briefly interrupted, the video continues to play uninterrupted from the buffer. Meanwhile, in the background, the player attempts to download more of the video into the buffer.

That is the theory anyway. In practice, interruptions and slowdowns of Internet connections are rarely brief. That is why Streaming Video cannot succeed unless, and this is important, unless the people doing it also own the network.

And you cannot own the network unless you think small. But more on this in a later article or blog. Stay tuned.

Copyright (c) Anil Gupte 2005, All rights reserved.

Sunday, April 09, 2006

Bollywood's "Long Tail"

Forget squeezing millions from a few megahits at the top of the charts. The future of entertainment is in the millions of niche markets at the shallow end of the bitstream.
The Long Tail

To understand what I am about to say, it may help to know about The Long Tail, first an article in Wired, then a blog, then a best-seelling book. The author Chris Anderson talks about “The Long Tail” - in content, it refers to the niche audiences for certain types of content i.e. "hard to find". And there is no doubt that there is a long tail for content - having proved its existence at, for example.

At the initial audience served is the approximately 3.2 million Diaspora of Indian origin in North America (plus similar numbers in UK, Australia, Africa and the Middle East). Most people can immediately grasp that immigrant Indians in the US want content from Bollywood. After all, if Bollywood has created a buzz even among Middle-Americans, it must be the what this Indian Diaspora is looking for, right? Wrong! It goes deeper than that. Yes, of course there is a demand for Bollywood content, and it cuts across the entire group. But, there is a thriving movie industry in every one of the seventeen regional languages of India (no we are not talking dialects – there are some 300 plus of those). So there is an even longer tail beyond Bollywood audiences, and if you do some “area-under-the-curve” math, you will find those numbers are even bigger than the numbers for Bollywood.

L3 Media is all about “The Long Tail”, and more importantly about monetizing it.

Okay, so you have an audience for Marathi (substitute your favorite language here – Swahili, French, Russian) films in the US. The average market size for each of the Indian languages is roughly 200,000 (about 50,000 households). How do you deliver content to this audience; and more important, how do you monetize it?

But first, let us talk a little bit about how you cannot. Take any one-to-many, traditional, system such as Cable TV or Satellite TV. There simply are not that many channels that these technologies can deliver. If you wanted to service all the Indian languages (or all the Eastern European languages, or all the African languages), you would need about twenty channels even with a single channel per language. And one channel for all the movies, news, interviews etc. that this group might want is simply not enough. There are 65 new movies made in Marathi each year, and the numbers are higher for some of the other Indian languages.

Even if you could shovel all the content for each language into one channel there is only so much of it that could be made available at prime-time. You could hope that people would record it on their PVRs, but then how would you monetize it? Certainly not from commercials, because once the content is on a PVR, there is no mercy from that thumb on the fast forward button.

Coming back to those 50,000 households to whom you want to deliver content. If you leave out the one-third or so who live in New Jersey or Los Angeles or one of the major metro concentrations of Indians (just look for the “paan” stains on the walls) you have approximately 200 households per ‘B-size’ city (another third) and then a dispersed remainder. Tell me Time Warner or Comcast cares about this market, and I’ll sell you a bridge in Bombay. But aggregate them online and suddenly you have a market! Even at a conservative $10/month average per household (alternative entertainment), you have a $6 Million market. But what if you could give them tons of free content (supported by ads of course), you could see a business that is 5-10 times that. Only problem is, with the current paradigm it is practically impossible to do the latter. How do you insert an ad for the sale at Boston Store in downtown Milwaukee into the current episode of “Kyonki Saas Bhi Kabhi Bahu Thi”. (If you just went “Huh?”, think “Dallas” or “As the World Turns” 20 years ago). The answer to that question is – you can … with L3 technology.

Copyright (c) Anil Gupte 2006, All rights reserved.