TelcoTV 2009: A quick, comprehensive, not-yet-complete review

While looking over my notes from TelcoTV 2009 last week, I noticed several trends and potential future storylines jumping out at me. There are more of them--and they require deeper discussion--than I can adequately get into here, but I'm hoping that further exploration of some of these themes will fuel much of our coverage of the TV service provider sector in the coming weeks. So, here's a quick rundown and review of what people were talking about at TelcoTV 2009:

-Cloud content: This turned out to be a much more popular topic of conversation than I would have thought going into the event. While cloud service and content delivery network architectures are top-of-mind for big carriers like AT&T and Verizon Communications, I didn't expect that to be the case for the mostly small, independent telco contingent at TelcoTV, but from the conference sessions to the show floor, several telcos in attendance voiced an interest in having content in the "local cloud" for easier distribution, as Rick Vergin, CEO of Wisconsin's Mosaic Telecom, put it.

Joachim Roos, CEO of Edgeware, also said he is seeing interest from telcos in deploying his company's streaming appliance in a central office and other places in the network. "Telcos want to put the CDN capability into their own networks, both for themselves and for other carriers to use as a wholesale service," Roos said.

There was even talk of middleware as a cloud-based service (see middleware section below).

-Multi-screen services: This leads directly into the following topic, but multi-screen content distribution, sharing and management were, as expected, issues of frequent discussion. However, it's not clear that telco TV providers, some of whom already delivery content to three different screens--TV, PC and mobile device--are ready for real IP Multimedia Subsystem-based sharing and moving of content from one device to another.

"When you look at multi-screen right now, there is still a lot of division between what you get--or can get--on different devices," said Craig Knudsen, director of business development for IPTV at Tandberg Television. "When you show a service provider what's possible over IMS when you have a content management system that authenticates, recognizes presence, handles rights management--it opens the eyes of service providers to see that this is possible."

For multi-screen to move ahead, several show exhibitors said the content management and back office issues--as well as legal issues around content rights--remain key areas for further innovation.

-Content management: Just one aspect of the multi-screen evolution, but arguably the most important. The emergence of the multi-screen environment ups the ante for reliable management and distribution of content (and billing for it) in a highly complex service environment. Some companies like Tandberg, with its WatchPoint Content Management System ecosystem, showed demonstrations of how this would work, while several more companies talked about content management likely being at the center of major partnerships--and potentially even acquisitions--to come in 2010.

-Hybridization of consumer video services: A couple of conference sessions focused on the basics of the TV Everywhere concept and the overall aspects of creating a foundation for a hybrid broadcast-online-video-on-demand TV and video environment. The sector as a whole still seems to be at the fact-finding stage. Heading back over to Edgeware, Roos showed off separate streaming appliances, one designed to support broadcast IPTV streaming and another to support Web TV. But, seeing the twin boxes one on top of the other, it's clear that the two could be used in tandem, or perhaps even further integrated, as service providers make good on the promise to deliver a hybrid content environment.

-Middleware: A much-maligned segment of the telco TV sector over the years (More than one person described it as "stagnant" during TelcoTV), middleware nevertheless remains an important part of the IPTV deployment picture. And, while detractors of some individual firms continue to rail against the lack of innovation, and the need for more consolidation in the segment (Will they be calmed by Kudelski's takeover of OpenTV?), there may be hope for the future.

Long-standing firms like Espial are still winning deals (see link below), and Microsoft seems to be successfully adapting its Mediaroom software to make better economic and management sense for small telcos. Nokia Siemens Networks won an award for its Interactivity Markup Language Framework, intended to spur greater open applications development, and NSN (and former Myrio) executive Brook Longdon made a push from the keynote podium for open app development as the key to future growth.

Meanwhile, if you thought there were no new, fresh ideas in the middleware segment, you must not have talked to 180Squared. The three-year-old company based in Pleasanton, Calif., was started by former Microsoft types--thus, they know their way around a middleware environment. The company's v.Unison suite allows multiple carriers to share a cloud-based, installation of a middleware platform such as Microsoft Mediaroom, enabling them access, via an abstraction layer, to the application components that allow them better differentiation in their own competitive scenarios.

"We wanted to bring Tier 1 services to this under-served market, where many providers are still using older-generation middleware," said Amir Littman, vice president of business development for 180Squared. He added that the middleware vendors themselves should like the idea because it will help them realize greater revenue potential to have their suites used by more carriers. Meanwhile, a single carrier willing to supply the cloud for other service providers to access the abstraction layer, also will see a new revenue opportunity. Finally, service providers who have heard of or experienced nightmare scenarios regarding their middleware deployments don't have to make the full, expensive commitment to get the middleware benefits they need the most.

-The future of set-top boxes: A long-debated issue, going back to TelcoTV 2008 and perhaps earlier. It has seemed that some of the functions usually housed in set-top boxes could move to either more functional, broadband-enabled TVs or a new class of high-powered residential gateways. A year ago, calling the decline of the STB market (Would it be 2012 or 2013?--assuming the world doesn't end in 2012) was good sport, but STBs continue to experience software innovations and acquire capabilities to support hybrid content environments. Companies like Motorola and Amino Communications say future STB needs could vary greatly from one service provider to the next. That means STBs could be very smart and quite crucial in one network, and perhaps a bit dumber and less central to enabling applications in another network. Either way, the predicted death of the STB may have been greatly exaggerated.

-The evolving U.S. market opportunity: Languages heard being spoken on the show floor at TelcoTV 2009: German, Swedish, Dutch (I was told), Korean, Japanese, French, Arabic, Spanish, and, oh yeah, English. There are probably others I'm missing, but it was clear that several non-U.S. exhibitors in particular viewed TelcoTV 2009 as a key spot to engage with U.S. telcos.

This year's event probably was not as big as last year's, nor as busy, but to me, a shift in attitude was quite apparent. For the last several years, many vendors have rightly viewed the U.S. market as still maturing, still complicated by more risks than other markets, and still not worth their full, undivided attention. In short, the U.S. was viewed as an immature market. But, in recent months, a few more foreign vendors have been opening or expanding offices in the U.S. and the market opportunity seems to be gaining some weight for them.

What is the opportunity? To some extent, it's in the providers who have already deployed--AT&T, SureWest Communications, Consolidated Communications, for example--but to an increasing extent, it's in the hundreds (800? 900? 1,000?) of other small telcos who are just beginning their TV/video adventures. That's big market in aggregate, but vendors also need to go extra miles to make sense of it. One deal--or even 10--will not pay the rent on the new U.S. sales outpost. Vendors need to look for clusters of telco partners, or ensure their platforms have mass appeal, combined with flexibility for cheap, quick customization on an individual basis. The opportunity is there now, but you aren't dealing with the incumbent telco giants of Europe anymore.

Believe it or not, there are a number of trends I didn't even touch upon here, and there is still some news from last week's show that I haven't had the chance to write yet, so stay tuned for ongoing coverage of TelcoTV 2009 news and further exploration of these trends and others in the days and weeks ahead. And do let us know what you thought were the hot topics at last week's event.

Before I go, here's a quick guide to our recent TelcoTV 2009 coverage:

AT&T U-verse TV Multiview garners TelcoTV award [1]
Telechannel offers a Yellow Pages TV application [2]
Espial highlights multiple customer wins [3]
Amino shows off its Sodaville-base set-top box [4]
Iowa Network Services signs deal with CloverLeaf [5]
Day One keynotes feature AT&T and Avail-TVN [6]
Horizon Telcom works with SeaChange, RGB [7]
Motorola deepens integration with Mediaroom [8]
Smallest telcos may find strength in partnering [9]

-Dan [10]