The Future of TV: Internet Television Tech on the Rise

Recently on IPWatchdog, we featured a series of AT&T patents in our Companies We Follow series that protect various technologies for Internet protocol television, or IPTV. More and more, we’ve been noticing various television technologies relying on Internet transmission that have been protected by patents issued from the U.S. Patent and Trademark Office. This prompted us to take a closer look at the current state of Internet Television technologies in America and the surrounding world.

A few U.S. cable television providers, such as Comcast’s AnyPlay and AT&T’s U-verse, already offer Internet television technologies. Globally, there were about 66 million IPTV subscribers as of June 2012, and that amount is expected to rise to 102 million by 2018. Domestically, the IPTV market has seen some interesting movement lately; as we noted in our recent Companies We Follow column on the Intel Corporation, which also featured patents protecting IPTV tech, the corporation recently agreed to sell it’s OnCue IPTV business and associated technology holdings to Verizon Communications. In turn, Verizon plans to develop IPTV consumer packages within the United States. Amazon.com is also reportedly shopping for content for its own Internet TV service.

IPTV is much different than the digital video accessed by millions of users on YouTube or other video streaming websites, but it shares a lot of the same ubiquitous, pervasive nature. A single subscription can be accessed by multiple television sets within a home, and Internet-based transmission allows for web-based applications to enhance a viewer’s experience. Our goal today is to explore the the current state of IPTV and Internet television technologies globally, as well as what the near future holds for these entertainment systems.

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How IPTV Works

Internet protocol television differs from other forms of television, such as cable or satellite, simply by sending television data across an Internet connection. This 2006 article from Ars Technica does a very good job of laying out the details of how television content is broadcast across Internet channels. Instead of receiving TV data through a single cable and using a tuner to decode the data signal, an IPTV set displays a video stream sent across a dedicated online channel. Technically, an IPTV viewer has access to only a few channels at a time, in order to manage bandwidth, but a local provider office can process a change in channels by switching users to a different multicast channel containing their selected video stream. This local office is also usually tasked with managing subscriber authorizations and providing video-on-demand services.

Internet television, which includes IPTV but also a number of other developing technologies that we’ll discuss in a bit, has risen in large part due to home network providers that can offer a bundle of digital services. By offering telephone, television and other services across standard Internet protocol language, a subscription service can offer much more consistent quality of service than if those services were delivered by separate means. A closer management of bandwidth used by a home network can ensure that phone, Internet and television services can all work without interruptions.

This overview of IPTV technology published by the British Broadcasting Corporation describes a couple of models through which IPTV is commonly deployed to consumers. Each of these involves a set top box that transmits the video stream for display on a television set. In two of these embodiments, the set top box receives a channel video stream directly from a server; one system uses application code within the set top box to decode video data, while the other requires the set top box to interact with an application on the server in a cloud-like environment. The other two models outlined here utilize a set top box with a personal video recorder to store video data from a network.

Current State of Internet TV

IPTV and other Internet television technologies have been somewhat more available in recent years, but we’re quickly approaching a day where the way we experience television will be greatly altered. For instance, the Comcast Xfinity X1 system that is being offered on a trial basis to Western Pennsylvania customers connects with mobile apps so that a user can perform a voice search for a certain show. Subscribers can even use the app to search for a certain actor or genre to find offerings currently available on TV or through video-on-demand services. This service, which aims to replace Comcast’s AnyPlay service, allows subscribers to access television content through a tablet or smartphone in addition to television sets.

These television technologies are also becoming more accepted across the world, not just in the United States. IPTV networks are available in countries including Russia, Great Britain, Canada, France, Belgium, India, Germany, China, Sweden and even the Dominican Republic, according to this list of global IPTV providers from video data analytics firm Skytide. In Denmark, the Waoo! IPTV package brand from EnergiMidt, an electricity and cable company, was recently voted the top IPTV service in that nation.

Increasingly, television distribution channels are striking agreements with Internet television providers to bring their content to wider audiences globally. Recently, FOX International Channels announced that they would allow the distribution of their National Geographic, Nat Geo Wild and Voyage channels on Freebox TV, a French IPTV provider. This could likely continue until a single provider can allow access to thousands of channels through an Internet subscription.

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Internet TV’s Future

It appears that subscriber content preferences are going to have much greater sway over the services provided to consumers in coming years. As we reported recently in our coverage of the 2014 Consumer Electronics Show, Roku TVs will be offered on the global consumer market within the year, and will likely give users access to more than 1,000 channels with a Roku subscription. Because of the cost-effective nature of private video production and Internet transmission versus typically means of television broadcast, more content channels can be developed and support the rise of niche broadcasting.

Internet marketing behemoth Amazon is starting to get involved, and in typical fashion it looks like it has ambitions to completely change the way consumers experience and obtain digital content. This article published by Bloomberg News reports that the Internet retailer has been contacting American media companies to inquire about building an online pay-TV service similar to the Amazon Prime service for streaming video. Amazon would develop it’s own set top box for the system. Verizon and Sony Corp. have also announced their intention to offer Internet TV in America in the near future.

With these new companies in the mix, competition for television subscribers will likely heat up in the coming years. Companies currently offering web and television services could likely be enticed to open up their regional basis and begin competing for customers across the country. Telecom companies that develop their own IPTV services may be able to keep the complete price of their Internet and television bundle down the most, but unless they offer both a wide selection and large degree of customization, but Internet-based streaming services like Netflix, Hulu+ and Amazon Prime already enjoy a great number of customers without providing Internet.

Hybrid broadcast broadband TV, or HbbTV, is one recent innovation that will likely increase options for television subscribers. HbbTV is focused on synthesizing multiple broadcast technologies, including Internet, cable and satellite, into a single platform. This could increase the complexity of web applications offered to users through set top boxes while also delivering TV services. The first HbbTV system involving IPTV to be deployed anywhere is coming in Germany, thanks to television provider Eutelsat KabelKiosk.

The idea of the “second screen” is a recent concept growing quickly due to the development of IPTV technologies. As the Comcast Xfinity system described above portends, customers will likely begin accessing broadcasted content through tablets and other Internet-connected mobile electronic devices. As this interview with Liberty Global’s vice president of programming Lukas Kernell states, soon these services will allow users to access video-on-demand and other broadcast services through a device while outside of the home.

Although the infrastructure for television broadcasting may not change drastically in the United States for a couple of years, other global markets that are poised for growth may show dramatic changes more quickly. A recent report on IPTV growth in various global regions found that IPTV revenue in Latin America should grow by a compound annual growth rate of 56.1 percent between 2013 and 2018. In the Middle East and Africa, IPTV revenue is forecasted to grow by 22.1 percent during that same time.

Just as Netflix has upended the movie industry, an IPTV provider like Roku may be poised to flip the entire television production and distribution model of today upside-down.