Tuesday, February 13, 2007

The Long Road To Convergence

I've been looking at the "triple/quad play" service providers (TV, Phone, Broadband, Mobile), and with all the talk of convergence, I think we're still a long way off from a truly "converged" service.

In my mind, a converged service would work something like this:

The phones in the house would be fairly intelligent devices. VOIP based, there would either be a full blown "Domestic PABX" box somewhere in the house or a "Virtual PABX" provided externally by my service provider. The wired phones would be internet terminals, with video messaging capabilities (like an ad-free, VOIP version of the Amstrad E3). The cordless phones would be dual WiFi/3G internet enabled devices which would connect to the home network at home and my providers 3G and WiFi services when away (similar to the current BT Fusion/Openzone offering, possibly combined with something like the iPhone). There would be at least one "house number" that would ring all the phones (both in the house and mobile) and every member of the household could have thier own personal number.

Video (and audio) wise, each TV would not need a set top box - just a network connection. They would connect to either a home video server (ie, a centralized, multi-tuner, networked PVR) and/or my providers video server (ideally, it would also connect to video servers provided by anybody with the rights to host the video that is on their servers).

I think getting there is going to be a struggle. Starting with Video, there's a host of challenges to overcome. An elegant solution (especially for those, like myself, who have limited space) would be centralized PVRs - my service provider would host my video storage space. This space would most likely be virtual (why have multiple copies of the same Star Trek episodes) and probably based upon hours and not gigabytes. This isn't going to happen anytime soon, because broadcasters won't allow it - most of them seemingly insistent on somewhat dubious PayPerView schemes. With a home server PVR based approach, if I have Sky, Homechoice/Tiscali or (as far as I'm aware) Virgin Media there are neither compatible PVRs that are network capable or even tuner cards for a PC so that I could build my own - so if I use those services I'm stuck with either a non-network PVR or some form of clunky network PVR|PC setup that involves re-encoding the video and some remote blaster to control the set top box.

With telephony, convergence should be simpler. Next Generation Networks are designed with convergence in mind. However, I'll bet it will end up as a mine field of confusion marketing. It will be a while before the concept of voice traffic needing it's own per minute pricing scheme disappears. One other obstacle to overcome is emergency service - not just the phone knowing your location, but emergency power to the phone as well.

Of some (possibly more) interest will be seeing what services and technologies fall by the wayside. My personal dead pool is:

  • Top Up TV Anytime - This is a service that combines spare DTT capacity with a PVR to simulate a VOD service. It's fairly expensive for what is a very limited offering and there have apparently been a lot of complaints about the quality of the PVR used. DTT space is at a premium, so somebody is bound to come along with a better (probably Freeview based) use for that spectrum and they'll be willing to pay more than TopUp TV for it. BT have a slightly better idea (ie, a Freeview PVR that uses a broadband connection for the VOD service), but the VOD service seems a bit expensive and needlessly tied to BT's broadband offering.

  • PC Based VOD services - such as 4od, fivedownload, Sky Anytime and even the forth coming iPlayer fom the BBC. Just as the TV is not the place to surf the web (at least for most people), the computer is not the place to watch TV (again, for most people). More importantly, if you have the knowledge required to use 4od and the like, you probably have the knowledge to use Bittorrent and get a free and uncrippled copy of the programme instead. It's why Apple have the Apple TV - make it convenient for people to watch what they want, on the device they want and people might just be willing to shell out a few quid (though, I would bet more for movies than TV shows). Most of these services are also Pay Per View and I have my doubts about most PPV services over the long term - they seem expensive compared to PVRs (especially once PVRs come down to the 50 pound price range, which about the same as watching 1 or 2 American TV series at current PPV prices). As for the iPlayer, once the initial excitement disappears and the limits (as currently proposed by the BBC Trust) become noticeable, interest in the use of the iPlayer will dwindle to the the point that a few years down the road the service will either be scrapped or overhauled in attempt to justify it's use of licence fee money (especially in world where the BBC is having a harder and harder time justifying the licence fee itself).

  • Broadcast Media - In the longer term, I don't hold out much hope for broadcasters. PVRs and VOD will change the market. However, just as there's still a place for radio, there will still be a place for live TV. News and Sport will be around for a long time, even the movie channels might remain competitive, possibly offering a bargain basement way to access movies compared to the VOD services. Even the linear entertainment channels might still have a roll, but more as marketing services for the download services (much like Radio stations playing music). Note, that by download services, I don't mean PPV, I mean I pay X amount of pounds and I get to watch every episode of a series, for as long as I want (an online version of DVD ownership, not an online version of DVD rental).

  • The UK Television Industry - this is a combination of the above two points in what will become a critically ill industry. A lot of the broadcaster's offerings (of both the live stream and nascent VOD varieties) are propped up by (mostly American) imports. What happens when what's left of the American Media industry (in an attempt to grab a larger share of the profits) decide to skip the middleman? Disney, Warner and Viacom all have operations over here, how much longer will they need local partners? (not long) I expect to see a lot of consolidation.

  • VOIP providers - Skype, Gizmo et al are going to be in for a rough ride once convergence really kicks in. The telecoms companies are starting to get really competitive, and as convergence kicks in, a lot of the benefits of VOIP will disappear (as it will all be VOIP). Not only will the telcos get competitive against the VOIP providers, as time goes on the VOIP providers will become less competitive compared to the telcos (Skype Journal recently had a rant on how Skype had introduced a call connection charge - something most telcos do, but are starting to get away from).

  • Over The Air vs Over The Wire - not really a dead pool item, more a question on if the "Negroponte Switch" will happen or even if it matters. Nicholas Negroponte pointed out that it was an accident of technology that phone calls were delivered over wires but television and radio were broadcast. Once everything becomes IP based, the low level medium becomes far less relevant. There might come a point where it's no longer viable to broadcast, instead the current broadcast spectrum could be reallocated for two way communications

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