Microsoft Corp. threw its hat into the video-transmission ring last week, unveiling what it described as an end-to-end video-compression solution for cable operators and telephone companies around the world.
The core of Microsoft's strategy is to lobby the world that Windows Media 9 is a better compression standard than MPEG-2 — or even MPEG-4.
The Redmond, Wash.-based software giant said international telephone companies can use its Windows Media 9 to create end-to-end Internet-protocol television services over their high-speed digital subscriber line platforms more efficiently than using Moving Pictures Experts Group transport.
Further, Microsoft believes even U.S. cable operators could use Windows Media 9 as a transmission standard on ever-expanding Internet-protocol platforms, to more efficiently transmit video to the home.
"This is next-generation television over existing, two-way broadband networks," said Microsoft TV division corporate vice president Moshe Lichtman. "This will enable cable companies to improve and extend digital TV services, and enable telecom operators to enter the pay TV market with a secure and scalable end-to-end IPTV service. It is superior to what is out there today."
The initiative kicks Microsoft's interest in television up a notch. After years of failure, the company unveiled a new guide product, Microsoft TV Foundation Edition, earlier this year.
It was greeted more warmly by cable operators than earlier iterations of the guide. Comcast Corp. and Time Warner Cable both plan to test it.
Microsoft's cable aspirations go far beyond the guide, and include software and video transmission.
"Cable operators can take advantage of this solution and address the limitations on existing networks," Lichtman continued, since 65% of cable's bandwidth is consumed by analog channels.
"That's going to get worse with HDTV and network-based DVR and VOD," he said. "We think two-way networks enable IP delivery that will enable them to realize significant cost savings.
You can bring all three services onto to the same infrastructure with cost savings," he noted, and do so even more cheaply than the much talked about all-digital MPEG-2 network, with a $35 converter for older analog TV sets.
The core ingredient for Microsoft in its IP TV strategy is Windows Media 9, which the company sent to the Society of Motion Picture & Television Engineers last month for standards approval. It's the first time Microsoft has sent such an important keystone in its software strategy to a standards body for open sourcing.
"We think it's the best compression technology out there," Lichtman said. "It has surpassed MPEG-2 by a factor of three," he said, adding that Microsoft feels it's even better than MPEG-4, in some respects.
"We can deliver Windows Media 9 to a range of embedded operating systems," he continued. "It is an open solution and it is an end-to-end turnkey solution that is built from the ground up with IPTV and two-way broadband networks in mind."
And why is Windows Media better? "It will take the user to the next level. You will see things you can't do, like a multimedia guide with multi-picture-in-picture presentations and instant channel changing," Lichtman said.
"Our solution scales to millions of subscribers cost efficiently," and carries with it Microsoft's digital-rights management software to provide security for content providers, he added. "This will enable some cutting edge services and user experiences that is tremendous value proposition to cable operators. The ultimate beneficiary will be the consumers."
But Microsoft will likely face an uphill fight. The world runs on MPEG-2 today, and there is billions of dollars of legacy, imbedded equipment running MPEG-2. At a recent private summit hosted by Reed Business Information, several programmers were asked about moving to Windows Media 9 as a video transmission format. Those programmers said there was little reason to move to that standard for TV since most TV platform providers—cable and satellite—were using MPEG-2.
While MSOs have talked about moving video around using IP, it's been confined to regional transport, not headend-to-set-top TV delivery.
The reasons are many, but largely stem from the legacy MPEG-2 transport technology and set-tops already installed.
In an interview last month, Comcast Cable chief technology officer Dave Fellows said his IP vision differed, somewhat, from the Microsoft vision. For now, IP is used for video transport for VOD.
"I have a very specific clear vision by what I mean by an IP platform — there's a provisioning layer and all sorts of layers," he said. "It doesn't have to be all IP. Where it makes sense to go IP, you go IP.
"Right now, the standard footprint we're rolling out is a server that contains the video that spits Gigabit Ethernet out to a GigE switch, a real IP switch, that talks to a GigE metro network to the edge," Fellows said. "That then goes into a box which is GigE in and a bunch of RF [radio frequency] QAMs [quadrature amplitude modulation systems] out, where the IP is stripped off and it's MPEG transport to the home."
With that setup, he said, "I don't have the overhead of IP and the 10 million set-top boxes I have still work. Now, as we look at the $35 set-top box, it ought to be able to speak IP, and yes it should, but it's going to start off speaking MPEG and broadcast."
There is much theoretical discussion about switched broadcast, where any piece of video ever made could be accessed by any home at any time. To Microsoft's view, the best transport method for switched broadcast, sometimes, called unicast, would be an all IP network.
"I don't want to have an architecture where I have to have everything unicast because it's IP," Fellows said. "It's not only the overhead in the last mile, it's all the switching equipment and routing equipment I have to put into my metro network. Someday everything will be HD, on demand streams and you'll have access to every piece of video that's ever been recorded everywhere. But that's someday, out when marketing figures out how to make money at it and my customers get sophisticated enough to know they want it."
Lichtman said he recognizes all those issues. "In the short-term, there is going to continue be MPEG 2," he said. But he points to Microsoft's SMPTE initiative to make Windows Media 9 an open standard for licensing that MPEG's grasp doesn't have to last forever.
Further, he said, "our solution will ingest existing content and take care of the encoding in secure way, "in effect, converting MPEG 2 to Windows 9."
As to the cable operator's legacy plant, Lichtman said: "Think about maintaining two separate infrastructures over time, and the OSS aspects of that. To transition everything to IP, they'll get cost savings."
"And think about the multitude of devices in the home today. IPTV allows the cable operator to take existing content to all those devices in a secure way. It's a very competitive space."
Microsoft has begun wooing hardware makers to integrate its vision into their products, including Harmonic Inc., Tandberg, Intel Corp., Pace Micro Technology plc, Juniper Networks Inc. and Thomson.
Notwithstanding its pitch to cable, Microsoft acknowledges its best shot for early traction is overseas. "We think Europe and Asia are significantly further ahead than North American telcos," Lichtman said. At the same time, Lichtman said: "The economics of pay TV services over telco networks do not change whether you are in North America or Europe. We've talked to all the [regional Bell operating companies]. They are thinking seriously, 'What is the end game?"
And though the telcos offer service bundles that include direct broadcast satellite, Lichtman doesn't believe DBS is their end game-video solution.
What all this would cost, even on a per home basis, Lichtman wouldn't say, other than to suggest "We think it's going to be cost effective for them."