Net TV poised to make the switch

By Graeme Philipson
July 5, 2005
Digital image: Karl Hilzinger

Digital image: Karl Hilzinger

Last month the BBC said that it would launch an internet service allowing people to download its TV shows for later viewing. The service will require a proprietary piece of software called the BBC Interactive Media Player (iMP), which will ensure that only subscribers watch the content.

This is a significant development for a couple of reasons.

First, it shows the increasing tendency of TV broadcasters to regard the internet as a valid medium of distribution. Second, the BBC system will use P2P (peer-to-peer) file-sharing technology, which has thus far been mainly associated with illegal file-swapping.

Radio stations have used the internet as a transmission medium. You can listen to most leading radio stations on this planet simply by accessing the station's website and streaming the sound through your computer. This is possible because radio needs only a small amount of bandwidth - about 64 kilobits per second - about the same as an internet phone call.

But to get better quality we need higher bandwidth, which is almost here.

High-fidelity sound needs higher bandwidth, and video higher still. As our internet connections achieve these higher bandwidths, more applications will be available. The BBC application, while interesting, is an interim technology. With sufficient bandwidth (about 2Mbps), it will be possible to stream video over the internet just as radio stations stream audio. Internet TV (also known as IPTV) is almost upon us, and it will change the world.

When TV stations start to broadcast over the internet there will be no need for pay TV. Pay TV succeeds because it uses a proprietary broadcast network, based on satellite or cable, as its transmission medium. It controls who can receive the signal by controlling the technology.

When any TV station can broadcast over the internet and anybody with a high enough bandwidth Internet connection can receive it, pay TV will cease to exist. Like the BBC black box, it is an interim technology. I give it 10 years, which means Foxtel might become profitable at about the same time its technology becomes redundant.

I was in a cab the other day with a Turkish taxi driver. He was telling me how fantastic it was that he could watch Turkish TV via satellite, but complained about the high price. I told him that in 10 years he will watch Istanbul TV as easily as he now watches the ABC.

In Korea, where most households have broadband (and I mean true broadband, not ADSL masquerading as broadband), most TV stations let you watch stuff you might have missed on the broadcast channels on the net. They charge about a dollar for the privilege.

This technology will also enable video-on-demand, and vastly lower the cost of entry to TV broadcasting. Anybody with content can set themselves up as a TV station, just as anybody today can publish a newsletter or a blog. You can download any movie or TV show ever made, any time you want.

High bandwidth will mean that people can swap movies and TV shows as easily as they swap music, which will greatly intensify the battle between copyright holders and consumers. That's what makes it so interesting that the BBC experiment will use P2P software, because that technology is the primary vehicle by which people exchange digital media.

Last week the US Supreme Court ruled that the suppliers of P2P software are liable for the activities for which their software is used. That ruling reversed a 1984 ruling that said Sony was not responsible for people using its VCR machines to copy movies or record copyrighted material from TV, and is regarded by many as a victory for both Hollywood and the recording industry.

But last month Microsoft announced it is working on software called Avalanche, a file-swapping technology similar to BitTorrent, which will greatly facilitate the sharing of digital content over the Internet. As always happens, technology is moving faster than the law - with Microsoft and the BBC endorsing P2P file sharing, the battle is over how the technology is used, rather than the technology itself. The US Supreme Court, like many people, is stuck in a 20th century mindset that technology will render irrelevant sooner rather than later.

The BBC's move shows the likely future direction of P2P technology. It is technologically unstoppable, because it makes so much sense, which is why Microsoft is moving in that direction. But by facilitating the sharing of digital data, P2P threatens the existing order of things, where film and recording companies control the distribution of their industry's content.

The key to reconciling these opposing forces is digital rights management, technology that attempts to restrict content distribution through devices such as encryption, passwords and special software codes. All DRM systems essentially rely on paying someone for hardware or software that unlocks content that digital technology allows to be distributed for free.

The digitisation of all content, along with high bandwidth and file-sharing technologies, are an enormous threat to the established order. Keep on eye on DRM over the next few years - it will be where most of the battles over content and distribution will be fought.
