Microsoft Mediaroom: Bring on the IPTV Developers

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Microsoft IPTV
Microsoft IPTV middlewe enters ‘Phase Two.

Microsoft IPTV middleware has officially entered ‘Phase Two,’ as the software giant delivers a development toolkit to carriers and third parties, indicating that the renamed Mediaroom platform is stable enough to hand over the innovation keys.

In conjunction with a June 18 release of its new middleware version, the development kit and an additional suite of Web services, personal media access and other advanced features, Microsoft also played its IPTV marketing strategy hand, unveiling an “ingredient brand” around the new platform name. It will encourage, but not require, carrier customers to incorporate “Microsoft Mediaroom” in their own IPTV service marketing and has developed mockup advertising slicks and user interfaces featuring the platform’s new logo to demonstrate how that might be executed.

“By leveraging Microsoft Mediaroom as an ingredient brand, service providers can take advantage of the worldwide awareness, positive attributes and consumer preference for Microsoft-based solutions,” says Christine Heckart, general manager of worldwide marketing for Microsoft TV.

The momentous shift, however, lies with the unveiling of a Multimedia Application Environment for developing interactive services and advanced applications, along with the Microsoft Mediaroom Application Development toolkit.

“We think this is the next phase of the industry,” says Jim Brady, communications manager for Microsoft TV. Now that nine of 17 Microsoft carrier customers including AT&T, BT, Swisscom and TOnline in France and Spain have launched commercially, he says, “It’s very similar to the Windows model. We’re basically turning over the keys to them and to third parties to develop the applications.”

That step suggests that Microsoft believes it is has largely solved debugging and scalability missteps for which it has suffered frequent criticism over the past year. Service providers themselves will certainly remain the gatekeepers of their IPTV networks and set-top box platforms, developing their own Mediaroom applications and deciding which third-party apps gain access to their service menus. Yet taking the step of selling the toolkit required some level of certainty at Microsoft that the platform has become stable enough to accept features no longer carefully shepherded by Microsoft hands.

“Over the course of late last year and early this year, we were really fine tuning all aspects of the platform, and just about all of that is behind us,” Brady says. “We feel confident we’re right where we need to be, and this new announcement indicates we’re taking a step forward.”

At the same time, he concedes that Microsoft and the carriers will continue to balance innovations against risk. “We and our customers know we can’t be stagnant, but at the same time, picking up the remote and sitting down to the TV has to be enjoyable, and we can’t lose sight of that.”

An AT&T spokeswoman said the carrier is not commenting on Microsoft’s new products at this time.

The new Mediaroom middleware release introduces new capabilities including richer support for Web services, enabling service providers to deploy dynamic video-on-demand portals, casual games and interactive TV services. According to Brady, Mediaroom will accomplish this through an xHTML environment that supports video, imagery and text and will interact with Web services, such as an outside photo service site. “It’s browser-like capability, not in the sense of a PC browser, but can browse the Web and integrate aspects of the Web,” he says. “Some new apps will be driven by passions and social networking and recommendation. We just don’t know what’s going to happen.”

He suggests that Mediaroom’s portal creation capability will fundamentally alter the living room media search paradigm in ways especially attractive to carriers and their content partners. “There could be one portal for all of a content provider’s assets organized a certain way with posters, enabling easy search to find what they want. HBO obviously has Sopranos, Sex in the City—certain things they own. This could be a powerful way to present it in a way that’s not a hunt-and-peck grid guide where it’s hard to find VOD content. This way allows aggregation and display to make it easy to find.”

The strategy of integrating aspects of the Web in a fashion largely out of the consumer’s sight promises to deliver a middle ground between passive and interactive navigation. “We learned a while ago that people expect a certain experience in front of the TV,” Brady says. “We want to use the Web to enhance TV, but not have the Web 15 feet away on your couch.”

In the interim period before third-party innovators produce new applications, Microsoft has added more applications to an original suite that has included digital video recording, video on demand, high-definition television and instant channel zapping.

The new application suite features support for more easily finding and playing or viewing music and images stored on a home PC for display on the TV. The connection can be wireless or wired. Stored content would be integrated into the navigation scheme under music, photos or other “folders,” Brady says. “This feature would be one a part of the guide that says ‘Photo and Music Sharing.’ It will find the content on your PC. You don’t always have the equipment or time to burn a DVD of photos from a vacation. This makes it easy for any TV user with a PC to get that content to the best screen in the house, the TV.”

The new middleware version also supports “Enhanced MultiView” capabilities that allow viewers to see multiple channels, programs and camera angles on one screen. Microsoft expects IPTV programmers, on behalf of news and sports fans, will exploit the feature for major events like the Olympics or World Cup Soccer with multiple simultaneous contests occurring at multiple venues.

Mediaroom now also supports integration of digital terrestrial television (DTT) access, something it has developed for British Telecom’s integration of IP on demand and FreeView DTT linear channel services in the U.K. and has now productized for others.

Although IPTV set-top box suppliers will no doubt compete to produce more and more powerful hardware down the road, according to Brady, the current generation of system on a chip (SoC) set-tops that emerged earlier this year will support the applications they hope will now be unleashed through the development environment. “Mediaroom is predicated on existing set-tops, chipsets, servers,” he says. “The set-top has to be sufficient to support all these applications for some time. These boxes are approximately two-thirds the cost of cable set-tops, but they are by far the single largest cost for service providers and need to have the longest lifetime possible.”

In the larger picture, as with its Windows history, Microsoft will retain a copy of the Mediaroom innovation keys for itself. Asked whether the company will serve as an aggregator and marketer of future third-party Mediaroom applications as well, Brady says, “We’ll probably end up getting involved at some point, but this is really a toolkit for service providers to do what they want. It’s certainly possible that we’ll continue to build and offer apps, but we’re opening it up to others. It will be available on the platform over the coming months. It will be a case by case scenario.”

Given Mediaroom’s support for Web services, Microsoft has, in any case, ceded away some control to outsiders. According to various reports over recent months, a number of carriers had already snatched the development keys for themselves in some areas. Now the opening of the platform is formal. If the resulting innovations open consumer wallets, the development kit will help bring to fruition industry analyst iSuppli’s recent projection that IPTV revenue will grow from $960.5 million last year to $39.1 billion in 2011.

“I think there will still be caution,” in terms of how the telcos pace further application development, says Michelle Abraham, principal analyst for In-Stat. “The telcos in general have always been careful about maintaining reliability of their service. They also don’t want to throw something new at the consumer every week. On the other hand, they want to use this platform they’ve created to offer new things.”

Brady points to the “think big, start small, move fast” refrain that Microsoft has often used in respect to building the IPTV market from scratch. “We’re still in the start small phase, but we’re beginning to move into the move fast phase. The industry is beyond dipping toes in the water. They’ve all jumped in. Some are in the deep end. We want to make this a premium package from which our customers can choose whatever they want. It’s exciting,” he says. “Continually innovating is going to define the industry from now on.”

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