Reuters has reported that Microsoft is in talks with pay-TV networks to roll out its own subscription service based on a “virtual cable operator” model. According to Reuters’ confidential sources, the service would not roll out for at least another year.
There is increasing availability of over-the-top content (catch-up and premium) on the Internet – but lack of standards for non-PC connected devices has made it hard for content providers to reach multiple distribution channels, as virtually every device requires adjustments to their service.
Initiatives such as YouView in the UK and Google TV in the USA are examples of ‘topware’ – specialised over-the-top middleware specifications that can be used across devices – and could represent a step forward in the standardisation of OTT services for connected devices (see image below – click to enlarge).
However, as demonstrated by the ‘Internet TV Principles’ charter published last week by French broadcasters, content providers are inherently uncomfortable with players such as Google TV, who they fear will sell advertising over their content. Walled-garden connected platforms such as Youview* and country-specific HbbTV initiatives (such as TNT 2.0 in France) are more likely to succeed in developing a secure environment where content providers feel under control.
As more premium content becomes available online and more devices implement topware specifications, the major challenge for these platforms will be to ensure that content is secure and specifications are correctly implemented by manufacturers.
With its dominance in the DRM space as well as the TV middleware experience acquired through its Mediaroom product, Microsoft will be the platform best-positioned to address connected devices and become the de facto standard for over-the-top services – provided it can make content providers comfortable with its approach.
*As of November 2010, Youview (former Canvas) shareholders include the BBC, Channel 4, Arqiva, ITV, BT, TalkTalk and Five