The Strategic Role of the Internet Video Portal for Operators

White Paper published August 2008

Authored by Brian Ring
Senior Director, Broadband TV Group
TANDBERG Television, part of the Ericsson Group

* Convergence and the Multi-screen Television Opportunity

* The Internet Video Portal as a Strategic Element in a Converged Video Strategy

* Using Advanced Metadata Strategies to Drive Richer Video Experiences

* The Internet Video Solution from TANDBERG Television, Part of the Ericsson Group

Convergence and the Television Opportunity for Operators

The communications market is undergoing an exciting and challenging transformation. A

proliferation in broadband access technologies, demand for increased bandwidth, the
maturing voice business, and new Internet innovators are heightening competition.
Convergence has enabled more operators to offer voice, video and data services in
every market globally. These market trends are forcing service providers to become
more innovative and more responsive to consumers.

At the same time, consumer behavior—and specifically the way that young people
consume media—is shifting radically in part due to the advent of Web 2.0 technologies,
services and business models.

For consumers, the conceptual definition of “television” is being altered. For decades,
television has been a single-activity video medium in which users ‘lean back, channel
surf and watch’. Now, consumers can ‘search, discover, watch, download, tag, rate,
create, share and personalize’ video experiences across TV, PC, mobile and portable
devices. Young people—and increasingly the not-as-young—are engaged daily in these
new types of multi-dimensional video experiences.

For operators trying to adapt to these market dynamics, the ultimate promise of
convergence is to advance the value proposition of the triple-play from ‘convenient billing
and discount pricing’ to a series of compelling, unified user experiences built out of a
fusion of services and devices. Multi-screen television—as described in more detail in
the following section—is one such experience. Leading operators are already integrating
advanced PC and mobile features into their traditional television offerings. Within a
decade, multi-screen TV will be a mass market reality.

In recent years, Amazon.com, Apple, Inc. and others have extracted billions of dollars of
market value out of economic disruption in the digital music market. Television is now
going through similar turbulence, presenting operators with historic financial and
strategic opportunities to define themselves in new, more valuable ways within the
media & communications industry.

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It won’t be easy. Executing convergence strategies and building multi-screen television
offerings for consumers is a tall order for most network operators. However, for service
providers that already sell Internet and TV, there is a clear first step on the road to
success with convergence, Web 2.0 and multi-screen television—deploy an advanced
Internet video portal that can enable high-value multi-screen user features. This applies
to operators that re-sell satellite TV in addition to those that are pursuing IPTV or other
facilities-based television services.

The remainder of this article seeks to outline why and how the development of an
advanced Internet video portal can be a simple, powerful and profitable strategy that will
put operators on a successful path toward multi-screen television.

What is Multi-screen Television?

The Internet is being used right now to download TV programs, watch VOD movie
trailers and TV show previews, receive personalized TV listing recommendations, rate,
tag and share favorite clips with friends, create and publish personal media, and more.
Today, these experiences are usually disconnected from the existing TV set-top box.
There are numerous websites where a consumer can find and watch a TV clip on the
Web—but none currently have the ability to easily (i.e. 1-click within the same interface)
add that show to a user’s DVR recording schedule.

Multi-screen television seeks to connect these otherwise disparate features and

functions into a cohesive experience.

To illustrate the value of multi-screen television, we should examine two sets of activities
that comprise a consumer’s television experience. The primary activity associated with
television is “watching video content”. An increasingly important secondary activity
revolves around “finding” what to watch and “sharing” the experience with others.1

The TV, PC and mobile devices (and the primary service offerings typically associated
with these devices—video, data, and voice) each have different strengths and
weaknesses with respect to these television related activities. For example, a video
service delivered to a big screen TV is fantastic for watching premium content. Similarly,
high speed Internet delivered to a PC has the best user interface for finding, watching
and sharing viral video content. Finally, mobile video is great if a user is out and about.2

However, none of the three primary devices that consumers use every day are great for
watching, finding and sharing content. All have drawbacks. By elegantly fusing together
a television experience that draws on each device’s strengths and complements
weaknesses, a multi-screen television offering can help to support an entirely new brand
promise to subscribers.

Multi-screen Use Cases that can be Delivered Through an Internet Video Portal

1
To be complete, trends in social media would suggest that producing one’s own videos is a third important
activity. This activity is also well-served by convergence strategies. It is a topic that deserves a separate
discussion and is outside the scope of this whitepaper.
2
The mobile device is also the best candidate for providing a portable, instantly available interface to add TV
shows to a wishlist. Imagine how much more useful a radio ad or billboard for a TV show would be if users
had the ability to instantly add that show to a personalized VOD wishlist.

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Most operator portals have TV listings. Very few of these are video-enabled, bringing in
the seamless ability to “catch-up” on previous episodes or watch YouTubeTM clips about
the show. Most operators are attuned to serving the local communities in which they
operate—but very few bring local video to their portals. These are just two examples of
the ways in which most operators can improve their video offerings.

Several key Web 2.0 trends are easing the deployment of these and other useful multi-
screen use cases. These trends include (a) increased openness and decreased friction
in integrating metadata, search, discovery and recommendation technology via web
services, (b) the invention of new video distribution technologies such as P4P and
adaptive streaming, (c) aggressive experimentation with advanced content syndication
and monetization business models, and (d) continued and explosive innovation in both
e-commerce and advertising supported media business models.

An operator’s Internet video portal should exploit these trends to create a rich,
personalized “search & discover” experience that is contextualized to—and ultimately
integrated with—their existing large-screen TV offering. The portal should deliver an
efficient, high-quality video stream that exploits the operator’s network and it should
provide a range of content from premium to long-tail to local.

An advanced Internet video portal could be used to drive value around the following
multi-screen use cases:

1. Find the best TV shows and movies in a video environment

2. Remotely schedule these shows and movies to be recorded by a user’s digital
video recorder (DVR)
3. Search and discover movies and TV shows that are being offered on video-on-
demand (VOD)
4. Watch trailers and bonus clips of movies and shows offered on VOD or live TV—
or of related movies and TV shows downloadable to a PC
5. Watch user-generated content (UGC) clips, reviews and other non-professional
content that is about the premium content on VOD or live TV
6. Bookmark movies or shows on VOD so that they are easy to find when I turn on
my set-top-box-connected TV
7. Catch-up on a TV series by watching full episodes on the PC and then
scheduling my DVR to record new shows
8. Provide streaming video clips of local news, sports and weather provided by local
broadcasters
9. Personalize the types of local video clips a user wants to see on their PC, mobile
phone or TV set-top

Many of these use cases can be done today in some form or another. An advanced
Internet video portal should focus on two objectives: (1) turning these features from
niche, early-adopter activities into killer apps that are simple enough for mass
consumption; and (2) ensuring these features are integrated into a seamless interface
that integrates with other services and devices.

Business Case: The Financial and Strategic Upside

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Operators that meet the challenges of heightened competition and dynamic consumer
behaviors will have financial and strategic opportunities over various time horizons.

IDC global research commissioned by Ericsson forecasts that the global market for
consumer digital multimedia presents a massive revenue opportunity for service
providers, growing from US$27 billion in 2006 to US$149 billion in 2011.

The most important financial impact of a well-executed multi-screen television strategy

will be to drive more efficient customer acquisition and churn reduction, two key
economic drivers for all operators. Delivering unique killer apps that subscribers get
used to—for example, Time Warner’s Start OverTM feature—are ideal viral marketing and
customer retention tools.

The most critical strategic opportunities an advanced Internet video portal will enable are
selling premium content and targeted advertising online. According to Parks Associates,
11.9 million US households paid an average of $8.19 monthly for Internet video content
in Q3 2007—an estimated total of $1.2 billion. That number grew from just 3.2 million
households spending an average of $4.54 in the prior year. With Amazon.com, Netflix,
Apple and others aggressively pursuing the paid content market with innovative
products, growth will continue apace.

The Internet advertising sector represents a larger near-term opportunity. The Internet
advertising market reached $21.2 billion in 2007. Forrester Research projects the market
to reach $61 billion by 2012 with online video advertising hitting $7.1 billion.

Finally, it’s worth noting that an advanced Internet video portal strategy does not
preclude partnering with leading download or advertising players. On the contrary, it can
and should be used to help to define the functional and economic parameters of these
partner relationships.

Business Case: Realignment of Existing ISP Portal Strategies

Historically, operators have had little interest and/or success with their consumer web
portals. Therefore, the opportunities outlined above are often met with valid objections.
Comments include: “Running a web portal is not our core business.” Or, “We can’t beat
Google.”

According to research released by Forrester in February of 2007, these comments are

accurate. In fact, on average, only 6% of ISP subscribers use their broadband provider’s
portal regularly. More striking, none of the 30 operator/ISP web portals evaluated by
Forrester received passing grades for usability!

However, in a converged communications marketplace, the consumer web portal is an

essential strategic component for delivering advanced services such as multi-screen
television and connected home. Therefore, rather than conceding the Internet to others,
operators must re-visit and re-align their consumer web portal strategies, organizations
and investments.

Fortunately, there is some good news here. While running an Internet portal is a complex
and difficult enterprise, recent technology trends—from open source to cloud computing
to widgets and web services—have lessened this burden over the past 18 months.

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Google has made it easy to monetize traffic. Innovators have emerged to automate the
selling of online advertising. Widget builders, RSS, open syndication standards and
premium aggregators like Hulu and CBS Audience Network have created a “distributed
web” in which compelling web applications and premium content are easier than ever to
aggregate and deploy on a personalized start page.

Nothing here is meant to suggest that operators need to “beat Google” at web search.
Partnering with Google (or other portals) is a terrific way to monetize traffic. However,
the consumer web portal must be viewed in a strategic context as providing a bridge to
additional value-creating businesses—particularly when those businesses will have a
direct impact on a converging media & communications market.

Using Advanced Metadata Strategies to Drive Differentiated Television

Many people decide whether or not to watch a movie based on reviews, trailers,
recommendations from friends or websites, or based on the cast involved. All of these
are non-technical descriptions of metadata at work.

Any piece of information (including multimedia content) that is used to describe video
content is—broadly defined—metadata.3 This includes descriptive data about the video
content, such as its title, subject matter, cast list, related content, etc. It also includes the
requisite utility data such as where the video is located, its format, and business rules
associated with it.

A rich set of descriptive metadata is a key building block to the development of

compelling search & discovery video experiences. To put it simply, it’s impossible to
“sort by viewer rating” if no viewer ratings are associated with the videos. The same
goes for a full range of search, browse, and discover experiences. Whether finding
additional movies related to favorites or getting recommendations about what to watch,
metadata is the key to enabling richer, more compelling Internet video experiences.

This is important to note because a defining facet of Web 2.0 technologies and services
is that they have caused an explosion in the amount and type of metadata being
produced. User-generated metadata, social networking metadata, timeline-based
metadata, and metadata-driven recommendation engines are all domains that have
experienced intense activity and growth over the past three years.

Theoretically, then, there are now many additional building blocks from which an Internet
video web developer might build better search and discovery experiences. Harnessing
all of these new and advancing forms of metadata has great potential to create better
search & discovery user interfaces and experiences around video content.

Technical Description of the Internet Video Solution from TANDBERG Television

At TANDBERG Television, we believe the need for better search and discovery has
grown. We also see a proliferation of descriptive forms of metadata that are required to
build better search & discovery experiences. What has not kept pace, in our view, is the
evolution of content management systems that can appropriately exploit and use all of
3
Some prefer to further define metadata as “objective” data about content. We believe “subjective” data,
particularly in a social media context, can be just as critical.

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these new forms of metadata to rapidly implement the types of digital media experiences
that consumers have come to expect. This is the foundational premise upon which our
next-generation Internet video platform is built.4

Taking advantage of this expanding universe of metadata will require a video

management platform that has the flexibility to ingest video assets in any form according
to any metadata schema. It also must be able to ingest additional descriptive metadata
from any source, and then combine and match that data across the set of ingested video
assets. Finally, the system must enable an operator to easily exploit this enhanced set of
descriptive metadata to drive unique search, sort, filtering, cataloging and playlisting web
features across the universe of video assets housed in the system.

How would this work in practice?

Here’s an example written from the perspective of an operator that has a broadband
access business as well as a facilities-based television service capable of VOD. The
Internet video portal manager might want to implement the following user experience:

The user should be able to visit the video portal, see what TV shows are
available on the VOD system, watch a preview of the show that the operator
hosts, and then watch a YouTube hosted clip about the show. The user should
then have the option of adding that show to his VOD playlist. The user could also
find related TV shows that are not on the VOD system but that will be broadcast
on live TV that week. Finally, the user should be directed to Hulu to watch last
week’s episode of that same show in order to “catch up” on the series.

The TANDBERG Television Internet video platform seeks to provide precisely this level
of functionality and flexibility around a wide range of similar user experiences. The
architecture of the platform is divided into three main modules: (1) Core Video CMS; (2)
Descriptive Metadata Enhancement; and (3) Contextual Processing.

The Core Video CMS has great flexibility with respect to ingesting media assets in any
number of forms. This includes rights-managed files that will be hosted by the operator.
It also includes the ability to ingest open web content that may be syndicated in a variety
of forms, and may use a variety of metadata schemas. In the user story above, this
module would enable the ingest and management of the VOD asset and Hulu videos (for
example) while tracking the YouTube clips associated with the VOD asset.

Once assets are in the Core Video CMS, our platform has the capability to automatically
enhance the metadata associated with those assets with additional data from 3rd party
providers. This could be user generated metadata from a community site, professional
metadata from a growing list of metadata service providers, or some yet-to-be invented
metadata service that may build upon social media. In the example above, the VOD
4
One way to illustrate our approach is by analogy to the much talked about concept of Web application
“mashups”, a development unique to Web 2.0. IBM’s definition of mashups is as follows: “Mashups are an
exciting genre of interactive Web applications that draw upon content retrieved from external data sources to
create entirely new and innovative services. They are a hallmark of the second generation of Web
applications informally known as Web 2.0.”

Broadly speaking, we see promising applicability of some these ideas in the context of video content
management and experience delivery. One objective of the TANDBERG Internet video platform is the ability
to enable the flexible creation of video “metadata mashups” that can provide unique Web video applications.

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asset would be enhanced with a more complete set of metadata, as would the YouTube
clip and the Hulu video. This metadata would then be accessible to the Contextual
Processing module.

Finally, once the system has a robust set of assets, and those assets have a rich set of
metadata associated with them, we can perform some custom and/or advanced
processing on those assets to serve up unique personalization, recommendation or
other presentation layer functionality, such as that outlined in the user story above. In
this example, the Internet video platform can run a complex search query, using TV
listing data, on the entire set of ingested assets in order to find video clips related to
shows that are going to be broadcast on TV.5

With this level of flexibility around the advanced handling of metadata, our Internet video
platform is poised to power a multi-screen television experience.

A screenshot of our MediaModeler CMS is below.

In Summary: Delivering a Multi-screen Television Experience

Operators today face a unique set of strategic challenges. A proliferation of digital

5
Note that the advanced, flexible handling of metadata, including TV listings data, is a core part of all three
modules including the Contextual Processing and Core Video CMS module, and not just the Metadata
Enhancement module.

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technologies can power video, voice and data services, driving heightened competition.
At the same time, consumer behavior is rapidly changing, and the Internet has spawned
a range of new consumer behaviors related to television. Both of these market dynamics
are providing a unique market opportunity for operators that can define, develop and
deliver compelling, innovative multi-screen television offerings.

At TANDBERG Television, Part of the Ericsson Group, our vision for Internet TV is to
enable operators to launch and manage an advanced Internet video portal that it is
specifically tailored to a multi-screen television strategy.

Leading operators are already advancing their consumer web video portals, and they are
focused on connecting existing Web 2.0 features to an existing television experience.
Search, UGC, social networks, feeds, widgets, community reviews, and
recommendation engines are already part of the PC experience—and they are all
required to drive success in the television environment of tomorrow.

TANDBERG Television’s vision for multi-screen television includes the ability to enable a
single, seamless Internet video portal that offers a personalized search, browse and
discover experience around local, premium and long-tail video content. Our platform has
the ability to customize and contextualize this experience to your existing TV and multi-
screen TV strategies.

[ENDS]

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