Discussion on IPTV Operations Modes

Abstract:IPTV is a promising broadband video service to which telecom operators are attaching great importance. However, there are many challenges especially to confirm operations modes. Under the circumstances of industry regulation in China, the telecom operators may adopt a standard IPTV mode, IP+TV mode or pure IP mode according to specific requirements when deploying IPTV services that are personalized and interactive. The development of IPTV faces numerous difficulties such as unclear supervision policy, industry barrier difficult to be removed, vague profit models, and imperfect technology specifications. However, the general development tendency decides a bright future of IPTV.

1 IPTV Values and Challenges
IPTV is a promising broadband video service to which globe telecom operators are attaching great importance. IPTV utilizes broadband IP network and takes TV + set-top box (or computer) as terminal to provide customers with various interactive multimedia services including video program, communication, and game through flexible broadcasting modes: on-demand, living or time shifted.

      In China, low PC penetration rate has become a bottleneck hindering the further development of broadband services. However, China has tremendous quantity of TVs, which may provide a way for the telecom operators to actively promote broadband access market. In order to create new revenue-generating services, besides a traditional terminal, TV may be used as multimedia communication terminal by the operators to deploy abundant multimedia value-added services. Such services are as web-site browse, network game, remote education, videoconference, video supervision, e-business, and triple play. IPTV is integration of communication, IT, radio, film and television, and amusement services, which provides an important approach for a traditional telecom operator to be transformed into an integrated information provider and a broadband services provider.

      The development of IP network and broadband access has laid a strong technical foundation for IPTV. By the end of 2005, the number of broadband access users exceeds 37 million in China. In addition, it is estimated that around 64.3 million users surf the Internet through broadband network, accounted for 58% of total national Internet users. Without doubt, broadband has become main theme in China磗 Internet market [1]. However, main broadband services revenue still comes from the broadband access service now. This is caused by inadequate broadband contents and applications, which is believed as a weak point to restrict broadband from further development. As the market competition gets rigorous, Average Revenue Per User ( ARPU) from broadband access is inevitably decreases. To stop this decreasing trend, more broadband contents, applications, and new value-added services must be introduced with a purpose to increase service revenue, improve ARPU of broadband services and impel broadband industry to higher level. Under these conditions, the development of IPTV becomes imperative.
Presently, the development of IPTV faces many uncertainties and tremendous challenges in China, for example, uncertain policy circumstances. From the view of regulatory management, IPTV covers several industries: radio, film and television, communication and culture. The supervision policies are unclear. Moreover, the barriers between telecommunication and radio, film and television industries are not broken down yet. The State Administration of Radio, Film and Television (SARFT) issued the 39th document in 2004. It named "Administrative Measures on Broadcasting Audio/Visual Programs over the Internet or Other Information Networks", in which restrictions on broadcasting audio/visual programs over networks are eased to some extent. Dozens of service providers have obtained license to broadcast audio/visual programs over information networks by taking PC as terminals. Among those, only Shanghai Media Group (SMG) was granted with a license in 2005 to provide such service by taking TV as terminals. In other word, SMG is the only Service Provider (SP) owns IPTV license in China. Moreover, from the view of commercial applications, the IPTV profit model is vague in China. Nowadays China磗 cable TV users contribute very low ARPU, about $2 dollar, amounting for only 5%-10% of ARPU in developed countries (regions).

      Consequently, the low ARPU has determined low tariff of IPTV services, even lower than ADSL access service. Therefore, the IPTV service revenue is much contrasted to its occupied network resources. Further more, how to acquire and provide attractive programs to users is a significant problem in China.

      In the views of technology and standard, the IPTV technical specifications are not perfect. For example:

• Video codec format is not uniform;
• Specifications on Digital Rights Management (DRM), Electrical Program Guide (EPG), and set-top box need to be stipulated;
• IPTV service requirements are unclear;
• Metropolitan Area Network (MAN) and access networks are not well prepared to develop IPTV services in a large scale;
• There is no sound supporting system adaptive to IPTV service, etc[3].
  

      Recently, IPTV has become a bright-point, attaching great importance in broadband industry. China磗 two incumbent fixed operators are actively involved in IPTV tests and trial systems in an attempt to expand the number of IPTV trial cities and scale. Generally, IPTV is in the stage of market incubation and preparation for scale development. The success of IPTV will depend on the improvements on policy, market and technology. To be delightful, the Central Committee of the Communist Party of China has approved the 11th Five-year Plan for National Economic and Social Development. In this plan, China pledged to reinforce broadband communication network, digital TV network, next generation Internet, and other information infrastructure so as to boost the trend toward three networks convergence, which declares a bright future of IPTV.

2 Features of IPTV Services
Different from traditional TV, the IPTV services have its distinct features: interactivity and personalization.
      (1) Interactivity
      IPTV not only provide traditional TV programs through the broadband network. In deed, it is a brand-new derivative under the broadband network environment. Interactivity is its key feature. IPTV not only receive broadcast programs like a traditional TV, but also implement interactions between users and SPs, or between users and users. With IPTV, users are free from time constraint so that they can choose favorite programs at their pleasure.

      Meanwhile, it can provide an easy way to combine multiple functions together including TV programs, Internet browsing, E-mail, online information inquiry, amusement, education, and business.

      (2) Personalization 
      As we know, TV program is still recognized as a basic IPTV service, the most attractive point is to provide personalized and diversified TV programs to different users. By taking the advantage of interactivity, various
value-added services may be flexibly deployed according to different user age, career, income situation, hobby, and more. For instance, remote education aims at students; TV shopping or consumer consultancy is more attractive for women; young people may choose amusement games without difficulty in complex operations. Furthermore, older people are usually in favor of traditional programs; for special group users staying in hotels, residential area or companies, it is reasonable to provide personalized services: video conferencing, on-demand system, and community services.

      At IPTV initial stage, it磗 better to choose video-broadcast service as basic content, launch video-on-demand, information inquiry and interactive service as its main selling points. As time passes, it is possible to gradually introduce videophone, remote education, interactive game and family amusement services. Looking at the operations experience from foreign operators, abundant programs and customer requested segmentation channels are crucial to the success of IPTV. Based on market research, film and TV play are mostly favored by Chinese, followed by music and game. Looking at China磗 program producing market, we find that CCTV, provincial TV stations and film groups are Content Providers (CPs) who play an important role to offer excellent programs. The IPTV video programs may be divided into traditional cable TV channel, pay-TV channel, video on demand, and more. The fact is that original TV channels are indispensable because of customers？ watching habits, but most of the contents are controlled by CCTV and provincial TV stations. Therefore, the telecom operators may cooperate with TV stations to jointly exploit IPTV market. Please refer to the cooperation model between cable transmission network company and cable TV station for details. The operators are responsible for transmission and forward program as well as collection of license fee from customers. On the other side, TV stations are responsible to produce and update programs. Moreover, the operators may create various pay-program channels to meet personal demands from segmented customers. In this case, the CPs responsible for pay-program channels may be independent content producers, who own copyright.

3 IPTV Operations Mode
      (1) Standard IPTV Mode
      Since it is unlikely for China磗 operators to obtain IPTV license recently, the only choice is to cooperate with traditional media group who owns IPTV license. As mentioned above, currently only SMG owns IPTV license in China. Relying on SMG磗 TV service and audio/video contents, the operators may further develop value-added services over the broadband network. This is called standard IPTV operations mode, which may be applicable of regions where radio and TV station is separated from network, which means the program production is separated from transmission media.

      Taking the traditional broadcast and the interactive on-demand program as breakthrough point, the standard IPTV mode aims at expanding user group (from broadband area to TV area). By using TV as display terminal, IPTV users can enjoy interactive amusement and communication services. In standard IPTV mode, the operators may charge the users for infrastructure access fee and the broadband service fee while CPs may charge the TV program fee. The standard IPTV mode covers all aspects of services including the audio/video program, the interactive service, the communication service, and the amusement programs. Its system architecture is illustrated in Figure 1, where green and red parts are constructed by an operator and CP respectively, yellow parts are constructed upon both parties？ negotiation.

      In the view of content production, audio/video broadcast/on-demand programs mainly provided by CPs own the IPTV license like SMG. The operators will pay more attention to interactive services. To achieve it, the operators may integrate other SP resources. The bearer network is constructed by an operator. Interfaces of supporting system, the DRM and the EPG modules are decided upon both parties？ negotiation. Set-top box, which integrates functions of decoding, decryption and browser, may be selected upon both parties？ negotiation according to real IPTV system in different regions.

      Although this is normal IPTV operations mode, its program source is largely confined. For example, if the broadcast program is only provided by SMG, users in some regions may not have the chance to watch local programs. As we know, local programs will greatly affect consumers, which may further influence other IPTV services.

      (2) IP+TV Mode
      To develop IPTV services in a region where CP doesn磘 own IPTV license, the operators may cooperate with local radio, film, and television organization to provide integrated services of radio, TV and interactive network service. This is called IP+TV mode. In this mode, radio and TV programs are mainly provided by radio, film, and television organization. Of course, integration of other SP programs is practicable. The radio and television programs are transmitted to end-user through Cable Television (CATV) network. However, other interactive communication and amusement services are provided by the operators, which are transmitted to end-user through IP network. In IP+TV mode, the operators will charge users the fee of broadband service while radio, film, and television organization will charge TV program fee. As for other content fee, it may be decided according to the content source. The IP+TV system architecture is illustrated in Figure 2, where green and red parts are constructed by an operator and radio, film, and television organization respectively while the yellow part is constructed upon both parties？ negotiation.

      In IP+TV mode, IPTV service contents come from local radio, film, and television organizations, operators and other SPs. This mode requires operators and the radio, film, and television organizations to independently construct bearer networks. Both parties must jointly construct the IPTV supporting system, DRM, EPG, and relevant interfaces. Because service contents have two approaches: CATV and IP network, set-top box has to support dual-mode. To achieve it, radio, film, and television organizations and operators should work together to tailor appropriate set-top box and conduct corresponding test. This mode will benefit both parties from the aspects of taking advantage of each other磗 strength, harmonious development, and coexistent. To make it clear, radio, film, and television organizations can  reduce large investment on set-top box and enhance interactivity of programs; an operator can effectively expand user group without spending much work on network reconstruction.

      (3) Pure IP Mode
      The standard IPTV and IP+TV modes need cooperation with either CP who owns the IPTV license or local radio, film, and television organizations. However, if there is no IPTV license holder in a region and the local radio, film, and television organization owns its network, i.e. radio and television station is run and controlled by the same organization, it is impossible for IPTV operators to provide audio/video programs due to strict regulations. In this case, the operators need to make adjustment and focus on interactive services such as surfing the Internet on TV, the video communication, and the online game. This operations mode is called pure IP mode.

      In the pure IP mode, the concept of TV does not exist in IPTV services. That is, neither audio nor video programs are provided. The interactive service becomes the main IPTV service and the TV is used as the display device. Through operations platform and IP network, the operators can provide users with various multimedia communication and amusement services. The service focus may be determined according to specific requirements in a certain region. The pure IP mode system architecture is illustrated in Figure 3, where the green part is constructed by an operator, the yellow part is jointly constructed with a partner upon negotiation.

      In pure IP mode, operators will nearly take all responsibilities through the content production, bearer networks, supporting systems to end-user terminals. Of which, partial service content may be produced upon cooperation with SP. Therefore, the system should provide SP with interfaces or virtual operating channels. As for set-top box in pure IP mode, it will be chosen according to different features of services, for example, game player one, video-communication one, and Internet one. This IPTV operations mode uses the TV as display device, through which, the original Internet multimedia applications are moved to the TV. This is believed to be a way for IPTV operators to develop services in such a region with extremely strict policies.

      To sum up, currently the operators may choose different IPTV operations modes while considering China磗 policies on audio/video programs and differential features of regions. Table 1 analyzes the 3 operations modes.
At IPTV initial stage, 3 IPTV operations modes may coexist at different regions or even the same region for a period. The operators may adopt different operations modes and cooperation strategies in accordance with different situations. The practical suggestions are given below:

      (1) Actively to cooperate with CP that owns IPTV license to jointly exploit the IPTV market; gradually provide more attractive and interactive value-added services.

      (2) If no IPTV license holder exists in a region, find the most opportunity to cooperate with local radio, film, and television organization from the aspect of audio/video programs.

      (3) If an organization owns integrated radio, film, and television station and network, it磗 better to adopt IP+TV mode. This mode will not threaten radio, film, and television organization to earn profit. Meanwhile, operators may introduce value-added services on the platform.

      (4) In a region with extremely strict policies, it磗 better to adopt the pure IP mode. At initial stage, anoperator may choose the Internet browsing, video communications, and games as breakthrough points to provide interactive services in the TV web mode. When political circumstances become less strict, the operator may enter in the audio/video market.

      (5) Strengthen the cooperation with China磗 government. In addition, be active in city information applications, such as the government information announcement and the remote education. IPTV services may be promoted as multimedia information services and interactive amusements services.

References:
[1] ?????????. ?????????????[EB/OL]. 2005-07-22. http://www.china.org.cn/chinese.
[2] ??????????. ??????????????????[S]. 2004.
[3] ???. ??IPTV???DSL?????[J]. ????, 2005(7):7-9.

Manuscript received: 2006-03-20

Author Introduce:

  Tang Xiongyan got his Doctor磗 Degree from Beijing University of Posts and Telecommunications in 1994. In 1994-1997 he was a post doctorate of Nanyang Technological University (Singapore), and a researcher of Humboldt-Foundation in Technical University of Berlin (Germany). Since 1998, he has been appointed as the  vice chief engineer of Beijing Telecommunication Bureau in China Telecom, vice general manager of development department in China Netcom, vice dean of China Network Communications Group Corporation Labs. He is the dean of technology committee in China Netcom System Integration Co. (research institute); adjunct professor in Beijing University of Posts and Telecommunications, director of board of Beijing Institute of Communications and dean of Youth Committee. His main research areas are broadband communication, optical fiber transport, access network technology, NGN, and more.

Chi Yuan  graduated from Beijing University of Technology and now works in the solution department of China Network Communications Group Corporation Labs. He is engaged in IPTV research and participates in IPTV technical test and service and technical specifications stipulation.