What is IPTV and Internet Video?
The rapid increase in number of
households and businesses with access to fast internet connections[1], capable
of streaming of downloading compressed video content, has allowed a market to
emerge for the provisioning of video content – whether of TV, short-form or
feature-length. The popularity of short-form, user-generated video site YouTube
from its creation in 2005 has spearheaded the emergence of a multitude of services
which now provide access to all sorts of video content.
At this point it's useful to
make clear some technological distinctions between different modes of delivery
of video content over the internet. What is referred to as IPTV (Internet
Protocol Television) is a platform used by television service providers to
“deliver multiple streams of continuous content over private networks to
viewers who watch the content on normal television sets”[2]. Though
the IP protocol used is common with internet traffic, the network is not part
of the open internet. In this way, service providers have built and exploited
proprietary fiber-based networks and CDNs (Content Delivery Networks) to avoid
issues with bandwidth which have prevented broadcast quality streaming of multi-channel
video over the “open” internet. In this sense, IPTV is closer in concept and
execution to cable television. Indeed, there has been convergence between the
two in recent years as cable television companies such as Virgin Media in the
UK have added internet video functionality to their set-top boxes[3].
In contrast, what is generally
referred to as “Internet Video” covers all other forms of delivery of video
content over the internet. Such content is delivered over the open internet,
with service providers hosting content on a number of servers which respond
on-demand to multiple concurrent users. The Internet Protocol facilitates this
concurrency and scale through its ability to break up digital audio-visual
streams into multiple packets and deliver it over a network across potentially
different paths, depending on current bottlenecks or outages in the
infrastructure. Though this can present challenges in terms of latency (the
time it takes to deliver data) and the potential loss of individual data
packets, the flexibility and open nature of the network has allowed a
multiplicity of content providers to emerge. And, as broadband speeds have
increased, the possibility of broadcast quality streaming and fast downloads
have increased the viability of paid downloads and subscription businesses for
online video.
Historical Context
It's important to place any
market for online video into the wider context of the home entertainment
market. As mentioned above, the development of IPTV closely mirrors that of
cable television, where small communities – perhaps due to factors such as
geography – are served through a purpose-built network, enabling the provision
of multi-channel video[4]. Cable
and satellite television emerged throughout the 1970s as a method of bringing
television to otherwise inaccessible parts of the US and other countries and
developed into a means of providing extra choice in mature markets served by
traditional broadcast television. Crucial to the salability of such offerings
has been so-called “big ticket” items including major sporting events and major
Hollywood feature films[5]. Cable
television built on the success of home video in providing home access to
feature films and negotiated contracts which introduced an extra exhibition
window closely behind a film's home video release. The growing importance of
the Video-on-Demand market and the relative decline of the DVD market have
ensured that this delay has gradually decreased:
The window used to be several months after video, but as
video has matured from a rental to sell through business, and as the
preponderance of DVD sales has become frontloaded, the residential PPV/VOD
windows has become accelerated ... it would not surprise me by the printing of
this book if the window has crept even further forward.[6]
It has been in the field of
sports coverage that cable and satellite has been most successful in terms of
differentiating offerings from broadcast television and other home
entertainment formats such as video. The ability to offer multiple channels of
live coverage of major sporting events has been a major sales driver. In the
UK, BskyB's development of Premier League football has been an incredible
success and has – in tandem with packages of Hollywood films and premium
television series – driven widespread adoption of Sky's satellite TV platform,
with around 10 million subscribers[7].
Central to the appeal of cable
and satellite has been premium content and a breadth of channels which aims to
ensure that there is always something on television which will engage the
subscriber. Cable television has advanced the notion of fulfilling viewer
desires by introducing true on-demand programming. Leveraging the capability of
fiber-optic networks, cable platforms through the 90s developed to allow
subscribers to select a range of programming for instant viewing. It is this on
demand access to a range of media content which is heavily exploited by
services which are being developed on the internet.
The breadth of sources across
the internet brings the reality of truly on demand content closer, as the
provision of all types of video and other content is only limited by
availability of physical masters and the licenses required ensuring that such
access properly compensates rights holders. The breadth of feature film (and
other types of media content) that has already been digitally mastered for
distribution on physical media formats ensures that the transition to online
distribution is smooth. As with previous home video formats, however, it is legal
issues which may present a greater barrier to the availability of content, as
rights holders seek to maximise value while preserving existing revenue
streams.
Major Companies in the Market Today
Despite the challenges to the
establishment of paid models for online feature film distribution, several
businesses have emerged who are simultaneously exploring new technological
modes of distribution and fulfilling content value demands made by rights
holders. The film industry has followed the music industry, who were first to
respond to large-scale decimation of their business by piracy, to embrace
online distribution as a way of preserving revenue streams. Online music
vendors such as Apple's iTunes and Amazon's MP3 Store have been popular with
music listeners and have provided music labels with at least some of the
revenue lost through illegal downloads. Also contributing to label's revenue
has been subscription services such as Spotify, with a library of music
available for on-demand streaming for a monthly fee. In addition, the music
labels have themselves set up portals on their own websites providing downloads
of albums and individual tracks. Partnerships with mobile phone companies have
also exploited the popularity of music played back on new portable devices[8].
Extending this business model,
iTunes and Amazon have expanded their existing music offerings to offer
downloads of feature film content. Until recently, broadband provision would
have reduced the viability of such services, where file sizes for an average
feature are likely to approach 1 GB. Also experiencing significant growth has
been subscription film services – with Netflix leading the way. The service,
which is currently moving beyond its initial market in the US, has a large
installed base[9],
built on the back its original physical DVD rental service. It has offered a
film streaming service in parallel to DVD rental since 2007 and has recently
introduced streaming-online subscription plans[10].
It has also moved into the content creation sphere, picking up the initial
screening rights for the Kevin Spacey television series House of Cards,
outbidding traditional cable and broadcast rivals in the process.
Despite the global nature of
companies such as Apple and Amazon, offerings such as iTunes have been
prevented from selling certain titles in all of the countries in which they
operate. Complex licensing issues have ensured that download rights have to be
negotiated for each geographical territory. In addition, services providing
access to feature films for streaming or download have had to implement
geo-blocking technology which prevents users from outside of the licensed
territories from accessing content. Online video companies who operate across a
number of countries operate applications and web portals which can look
markedly different, dependent on from which country the user accesses them.
Services such as Mubi – a company which aims to provide access to international
art-house film – implement this by colour coding films on the website menu,
allowing users to filter out those which are not available in their own market.
Others, such as Sony’s Crackle movie portal, filter out content in advance –
which, in the UK at least, results in a very sparsely populated website. It
could be argued that this approach is preferable to the sadly ubiquitous error
message, “This content is not currently available in your territory”, which is
seen on countless online video websites at present, when accessed from the UK[11].
Geographical licensing has
ensured that, while the internet is truly a global platform, each country may
have its own online distribution players. In the UK, the dominant company for
legal access to streaming video content is Lovefilm, which has operated in a
similar fashion to Netflix in the US, providing access to a number of titles
for online streaming alongside a traditional physical DVD rental offering.
Blinkbox is a pure streaming video service, which provides access to a large
number of film and television titles on a pay-per-view basis. It also provides
free, advert-supported access to a limited range of less popular titles. While
both Lovefilm and Blinkbox, in common with international services which operate
in the UK such as iTunes, carry a number of niche and documentary titles, their
main focus is mainstream Hollywood films. A number of specialised websites have
been established in the UK market which provide access to low-budget,
independently-produced feature films, shorts and documentaries. Services such
as ChannelFilms and jointhedocs.tv have partnered with art house DVD labels and
film festivals to provide a legal online source for niche content. Many of
these services are supported by government – such as the now-defunct UK Film
Commission[12]
and the EU’s Europa Film Programme.
[1] 70% of UK households were connected to
broadband internet in Jun 2010. "OECD place UK 5th in Broadband
Penetration", Techwatch.co.uk, Dec 6 2010. http://www.techwatch.co.uk/2010/12/06/oecd-places-uk-5th-in-broadband-penetration/
[3] http://tivo.virginmedia.com/
- Virgin's TiVo-powered range of cable set-top boxes.
[4] See the example of Canby Telecom, in Simpson
& Greenfield, p. 43. The company serves an agricultural community in
Oregon, providing voice, data and "up to 200 standard definition
channels"via an IP network.
[5] The Business of Media
Distribution, Jeffrey C. Ulin,
Focal Press, Oxford, 2010, p.369
[6] Ulin, p.371
[7] Nebusiness.co.uk, "BskyB customer base
is close to 10 million", Oct 23, 2010. http://www.nebusiness.co.uk/business-news/latest-business-news/2010/10/23/bskyb-customer-base-is-close-to-10-million-51140-27527677/
[8] For example, Vodafone Music - http://music.vodafone360.com/gb/en
[9] Almost 25 million subscribers in the US
alone. Gigaom.com, "Netflix by the Numbers", Aug 9 2011. http://gigaom.com/video/netflix-by-the-numbers/?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+newteevee+%28GigaOM%3A+Video%29
[10] Mashable.com, "Want netflix DVDs &
streaming?", July 12 2011. http://mashable.com/2011/07/12/want-netflix-dvds-streaming-thatll-be-16-a-month/
[11] Probably a common problem for anyone accessing
from outside the US. Most online video websites are owned and run from the US.
Popular exceptions include dailymotion.com – from France – and youku.com – a
Chinese alternative to Youtube.
[12] The Telegraph, "UK Film Council
Abolished", 26th July 2010. http://www.telegraph.co.uk/culture/film/film-blog/7911109/UK-Film-Council-abolished.html
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