Tài liệu Internet television pptx

Darcy Gerbarg and Eli Noam I Infrastructure Implications of Internet TV 1 Internet Television: Definition and Prospects 1 II Network Business Models and Strategies 4 Industry Structure a

Internet Television

Jo Groebel, Series Editor

Kevin • Europe in the Media: A Comparison

of Reporting, Representation and Rhetoric

in National Media Systems

Noam/Groebel/Gerbarg • Internet Television

Lange/Ward • Media and Elections: A Comparative Study

Van Ginneken • Collective Behavior and Public Opinion:

Rapid Shifts in Opinion and Communication

Published by Lawrence Erlbaum Associates, Publishers

Internet Television

edited by

Eli Noam

Jo Groebel Darcy Gerbarg

LAWRENCE ERLBAUM ASSOCIATES, PUBLISHERS

Columbia Institute for Tele-Information

All rights reserved No part of this book may be reproduced in any form, by photostat, microform, retrieval system, or any other means, without prior written permission of the publisher.

Lawrence Erlbaum Associates, Inc., Publishers

10 Industrial Avenue

Mahwah, NJ 07430

Cover design by Sean Sciarrone

Library of Congress Cataloging-in-Publication Data

Internet television / edited by Eli Noam, Jo Groebel, Darcy Gerbarg.

p cm.

Includes bibliographical references and index.

ISBN 0-8058-4305-1 (c : alk paper)

ISBN 0-8058-4306-X (pbk : alk paper)

TK6679.3 I59 2003

CIP Books publishedby Lawrence Erlbaum Associates are printed

on acid-free paper, and their bindings are chosen for strength

and durability.

Printed in the United States of America

10 9 8 7 6 5 4 3 2 1

Darcy Gerbarg and Eli Noam

I Infrastructure Implications of Internet TV

1 Internet Television: Definition and Prospects 1

II Network Business Models and Strategies

4 Industry Structure and Competition

Michael L Katz

v

5 Business Models and Program Content 61

David Waterman

6 Broadcasters’ Internet Engagement:

From Being Present to Becoming Successful 81

Bertram Konert

III Policy

Robert Pepper

8 The Challenges of Standardization:

Toward the Next Generation Internet 113

Christopher T Marsden

9 Intellectual Property Concerns

for Television Syndication Over the Internet 143

Kenneth R Carter

10 Internet Television and Copyright Licensing:

Michael A Einhorn

11 Network Business Models and Strategies:

The Role of Public Service Broadcasting 173

Fritz Pleitgen

12 International Regulatory Issues 179

Stephen Whittle

IV Content and Culture

13 Audience Demand for TV Over the Internet 187

John Carey

14 Content Models: Will IPTV Be More of the Same,

Jeffrey Hart

15 The Content Landscape 215

This book is the result of a transatlantic collaboration between the bia Institute for Tele-Information (CITI) and the European Institute for theMedia (EIM) Also participating was the Center for Global Communica-tions at the International University of Japan (GLOCOM) The aim was tolook at the advent of widely available individual broadband internet com-munications and its impact on a new stage in the development of televi-sion: Internet television This global approach produced a broad range offocused, in-depth discussions covering many important issues The com-missioned research papers, collected and edited for this book, providemany insights and much information on Internet television

Colum-This book benefited greatly from the research and administrative helpprovided by many people Among them are the following: Reuben Abra-ham, Keisha E Burgess, Jason H Chen, Gabriele Eigen, Raymond Fong,Danilo “Jun” Lopez, Yuko Miyazaki, Rosa M Morales, Jasmina Pejcinovic,and Stefanie Winde We thank Robert C Atkinson, Kenneth R Carter,Bertram Konert, Koichiro Hayashi, Nobuo Ikeda, and A Michael Noll fortheir managerial and substantive contributions to this project Specialthanks go to the authors and to Linda Bathgate, the book’s editor at Law-rence Erlbaum Associates

Michael Einhorn was an especially important collaborator in the ject, helping in the conceptualization of the issues and in the identification

pro-of leading experts He deserves much credit

ix

We are grateful to the Alfred P Sloan Foundation and its program director,

Dr A Frank Mayadas, for their support of CITI, as well as to David A Schaefer

of Loeb & Loeb, LLP, and John S Redpath, Jr., of Home Box Office, Inc In dition, we wish to thank the State Chancellery North Rhine-Westphalia, Vic-toria Versicherungen AG, and PriceWaterhouseCoopers for their support ofEIM in this project

ad-Our gratitude is no less to those inadvertently omitted

—Eli Noam, Jo Groebel, and Darcy Gerbarg

New York, February 2003

Contributor Biographies

John Carey

Managing Director, Greystone Communications, Affiliated Research Fellow at the Columbia Institute for Tele-Information, and Adjunct Professor, Columbia University Business School

John Carey is Managing Director of Greystone Communications, a mediaresearch and planning firm He conducts research studies of new commu-nication services directed toward homes, businesses, and schools Cur-rently, he is conducting research about broadband web service,e-commerce, interactive television, personal video recorders, and digitalsatellite radio service for cars

His clients have included American Express, AT&T, A&E Television works, Bell Atlantic, Cablevision, Corporation for Public Broadcasting,Digitas, Into Networks, Loral Space Systems, NBC, the New York Times Digi-tal Media Company, Public Broadcasting Service, Rogers, Cablesystems,and XM Satellite Radio, among others

Net-Dr Carey is also an Adjunct Professor at Columbia University BusinessSchool, where he teaches graduate courses on Demand for New Media

He is an Affiliated Research Fellow at the Columbia Institute for mation He holds a PhD from the Annenberg School for Communications

Tele-Infor-at the University of Pennsylvania and is the author of more than 50 tions on interactive media and the adoption of new telecommunicationtechnologies

publica-xi

Execu-of prepaid telecommunication services for deceptive advertising Execu-of tariffrates Mr Carter has a background in media and communications, havingworked for MTV Networks, Island Records, and the international televisionsyndication firm D.L Taffner As Deputy Director, he manages CITI’s re-search agenda, assists the development of the institute’s online researchplatform, the Virtual Institute of Information, and serves as the institute’scounsel Mr Carter’s current research includes the Emerging MarketEconomy in Bandwidth, Over the Internet, and the regulatory and intellec-tual property issues in telecommunications He received his JD from the

Benjamin N Cardozo School of Law, where he was a member of The

Cardozo Arts & Entertainment Law Journal and President of the Asian and

Pacific Law Students Association Mr Carter was awarded an AlexanderJudicial Fellowship, serving as a full-time junior clerk in the chambers ofHon John C Lifland, U.S.D.J He was graduated from Colgate Universitywith an A.B in Economics and East Asian Studies after studying abroad inEngland and Japan, and is proficient in Japanese He is presently admitted

to the bar in New York State and the District of Columbia

Ms Einav taught media studies at the New School of Communications inTel Aviv She is currently a PhD candidate in the communications programand a researcher at the Interactive Design Lab at Columbia University’sSchool of Journalism Her research interests include content models forinteractive media

Michael A Einhorn

Principal in the New York office of LECG, LLC

Michael A Einhorn is a consultant and testifying expert active in the areas

of intellectual property, antitrust, media, and entertainment Dr Einhorn isalso an Adjunct Professor in the Graduate School of Business at FordhamUniversity, where he teaches a course in the entertainment industry

Professor Einhorn has considerable professional experience in mediaand entertainment, having written articles, prepared affidavits, or testified

in matters related to music licensing, antitrust, Internet television,peer-to-peer file sharing, digital rights management, anticircumvention,and misuse of copyright He received a BA from Dartmouth College and aPhD in economics from Yale University He also served as a professor ofeconomics at Rutgers University and worked as an economist in the Anti-trust Division of the U.S Department of Justice and at Broadcast Music Inc

Darcy Gerbarg

Executive Director, Marconi International Fellowship Foundation

and Senior Fellow, Columbia Institute for Tele-Information, Columbia University Business School

Darcy Gerbarg is a Senior Fellow at the Columbia Institute for mation, Columbia University Business School, since 1997 In 2000, she wasDirector of Business Development at Everest Broadband Networks Prior

Tele-Infor-to that time, she held research positions at Courant Institute for ical Sciences, New York University, and the Computer Graphics Lab, NewYork Institute of Technology She has been an adjunct faculty member atthe Interactive Telecommunications Graduate Program and the Film andTelevision Departments at New York University She was an adjunct facultymember at the State University of New York at Stony Brook, where she alsobuilt networked multimedia labs Ms Gerbarg started and directed theGraduate Program in Computer Art and the Computer Institute for Arts atthe School of Visual Arts in New York She also initiated and chaired thefirst SIGGRAPH Computer Art Shows

Mathemat-Ms Gerbarg has lectured, organized, and conducted panels, workshops,and presentations at professional conferences for industries, companies,and universities She has a continuing interest in entrepreneurial activities,start-ups, and venture capital Conferences she has organized for CITI in-clude the Future of Digital TV (1997) and Venture Capital in New Media

(1999) Ms Gerbarg’s edited publications include The Economics,

Technol-ogy and Content of Digital TV (Kluwer Academic Publishers, 1999) and tal TV (Prometheus, the Journal of Issues in Technological Change,

Digi-Innovation, Information Economics, Communications and Science Policy,Carfax Publishing Ltd., June 1998) Ms Gerbarg has a BA from the University

of Pennsylvania and an MBA from New York University

Jo Groebel

Professor and Director, European Institute for the Media, EIM

Jo Groebel is Director-General of the European Institute for the Media inDüsseldorf and Paris, and holds a professorship for media at the Univer-sity of Amsterdam He is a visiting professor at the University of California

in Los Angeles (UCLA) and the University St Gallen He was President ofthe Dutch Association for Communication Sciences, and advisor to theDutch and German governments at the highest levels, the UN, and sev-eral broadcasters and media firms He is author/editor of 20 books Hehas worked on numerous TV and radio productions internationally andcontributed to many publications.

Jeffrey Hart

Professor of Political Science, Indiana University

Jeffrey Hart is Professor of Political Science at Indiana University,Bloomington, where he has taught international politics and international po-litical economy since 1981 His first teaching position was at Princeton Univer-sity from 1973 to 1980 He was a professional staff member of the President’sCommission for a National Agenda for the Eighties from 1980 to 1981.Professor Hart worked at the Office of Technology Assessment of theU.S Congress in 1985–1986 as an internal contractor and helped to

write their report International Competition in Services (1987) He was

visiting scholar at the Berkeley Roundtable on the International

Econ-omy, 1987–1989 His publications include The New International

Eco-nomic Order (1983), Interdependence in the Post Multilateral Era

(1985), Rival Capitalists (1992), and (with Joan Spero) The Politics of

In-ternational.

Michael L Katz

Professor of Business Administration and Economics, Director

of the Center for Telecommunications and Digital Convergence,

University of California at Berkeley

Michael L Katz is the Edward J and Mollie Arnold Professor of BusinessAdministration at the University of California at Berkeley He also holds anappointment as Professor in the Department of Economics Professor Katz

is the faculty leader of the Haas Business School’s e-business initiatives,and serves as Director of the Center for Telecommunications and DigitalConvergence He is a four-time finalist for the Earl F Cheit award for out-standing teaching and has won it twice

Dr Katz has published numerous articles on the economics of works industries, intellectual property licensing, telecommunications pol-icy, and cooperative research and development He is coeditor of the

net-California Management Review and serves on the editorial board of the Journal of Economics and Management Strategy Dr Katz also serves on

the Computer Science and Telecommunications Board of the NationalAcademy of Sciences

Dr Katz served as Chief Economist of the Federal CommunicationsCommission from January 1994 through January 1996 He participated inthe formulation and analysis of policies toward all industries under com-

mission jurisdiction, including broadcasting, cable, telephone, and less communications.

wire-Dr Katz holds an AB summa cum laude from Harvard University and a

DPhil from Oxford University Both degrees are in economics

In-advisor on the editorial board of the research journal Convergence,

pub-lished by the University of Luton Press

edited the following books: Convergence in European Digital TV Regulation (London: Blackstone, 1999, with Stefaan Verhulst) and Regulating the

Global Information Society (Routledge, 2000) His current research is in

le-gal, business, and technical challenges to video over Internet protocol, andespecially standard setting, which is examined in “Cyberlaw and Interna-tional Political Economy: Towards Regulation of the Global Information So-

ciety” 2001 L.REV M.S.U.-D.C.L 1 He contributes to journals including info,

Communications Week International, and Inside Digital TV In 1998, Mr

Mar-sden founded the International Journal of Communications Law and Policy(www.ijclp.org), which he coedits He is also a consultant with Lon-don-based digital communications boutique consultancy Re: Think!

(www.re-think.com), and has been expert consultant to the Chief Executive

of the Independent Television Commission (2000), the Council of EuropeMM-S-PL Committee on digital media pluralism (1999), and Shell Interna-tional’s Global Scenario Planning team (2000) He was UK Regulatory Direc-tor of MCI Worldcom from 2001–2002 when he resigned

Uni-to Columbia in 1990 He served as DirecUni-tor of the Columbia Institute forTele-Information, an independent university-based research center focus-ing on strategy, management, and policy issues in telecommunications,computing, and electronic mass media; and Chairman of MBA concentra-tion in the Management of Entertainment, Communications, and Media atthe Business School He has also taught at Columbia Law School andPrinceton University’s Economics Department and Woodrow WilsonSchool Professor Noam has published over 20 books and 400 articles ineconomic journals, law reviews, and interdisciplinary journals and hasserved on the editorial boards of other Columbia University Press aca-demic journals He was a member of the advisory boards for the federalgovernment’s FTS-2000 telecommunications network, the IRS’s computersystem reorganization, and the National Computer Systems Laboratory

He received an AB (Phi Beta Kappa), MA, PhD (Economics) and JD fromHarvard University

seasoned author of op-ed pieces and a frequent columnist in trade zines He received his PhD in Electrical Engineering from the PolytechnicInstitute of Brooklyn in 1971, MEE from New York University in 1963, andBSEE from Newark College of Engineering in 1961 He is a Senior Member

maga-of the Institute maga-of Electrical and Electronics Engineers (IEEE) and is a ber of the Audio Engineering Society, the Society for Information Display,and the Society of Motion Picture and Television Engineers

mem-Andrew Odlyzko

Professor of Mathematics, Director Digital Technology Center,

Assistant Vice President for Research, University of Minnesota

Andrew Odlyzko has recently assumed the positions of Professor of ematics, Director Digital Technology Center, and Assistant Vice Presidentfor Research at the University of Minnesota Until this year, he was the head

Math-of the Mathematics and Cryptography Research Department at AT&TLabs He has done extensive research in technical areas such as computa-tional complexity, cryptography, number theory, combinatorics, codingtheory, analysis, and probability theory In recent years, he has also beenworking on electronic publishing, electronic commerce, and economics

of data networks Professor Odlyzko is the author of such widely cited pers as “Tragic Loss or Good Riddance? The Impending Demise of Tradi-tional Scholarly Journals,” “The Decline of Unfettered Research,” and

pa-“The Bumpy Road of Electronic Commerce.”

Robert Pepper

Chief, Office of Plans and Policy, Federal Communications Commission

Robert Pepper has been Chief of the Office of Plans and Policy (OPP) atthe Federal Communications Commission (FCC) since December 1989.Under Pepper’s leadership, OPP is responsible for policy questions thatcut across traditional industry and institutional boundaries, especiallythose arising from the development of new technologies At OPP, Dr Pep-per’s responsibilities have included leading teams implementing provi-sions of the Telecommunications Act of 1996; assessing the development

of the Internet; designing and implementing the first spectrum auctions

in the United States; developing more market-based spectrum policies;assessing competition in the video marketplace; and assessing the im-pact of the development of the Internet on traditional communicationspolicy structures

Before joining the FCC, Dr Pepper was Director of the Annenberg ington Program in Communications Policy Studies He also has been Di-rector of Domestic Policies and Acting Associate Administrator at theNational Telecommunications and Information Administration and devel-oped a program on communications, computers, and information at theNational Science Foundation

Wash-He is a graduate of the University of Wisconsin-Madison, where he alsoreceived his doctorate.

Fritz F Pleitgen

Director-General, WDR

Fritz Pleitgen is the Director-General of WDR, Westdeutscher Rundfunk,the largest broadcasting corporation in the German Association of PublicBroadcasting Corporations, ARD He took up this post in 1995 In January

2001, he became chairman of the ARD

Initially a newspaper journalist, Mr Pleitgen joined the WDR in 1963 as areporter for ARD’s main news program In 1970, he was appointedARD-correspondent in Moscow He became Head of the ARD Studio inEast Berlin in 1977 In 1982, he and his family moved to the United States,where he took over the ARD Studio in Washington Mr Pleitgen held thispost for 5 years and then became head of the ARD Studio in New York Hereturned to the WDR headquarters in Cologne in 1988 to become Edi-tor-in-Chief of WDR television and head of the politics and current affairssection During this period, Mr Pleitgen won great acclaim for his reports

on German reunification and the collapse of the Soviet Union He was pointed Radio Director in 1994 In addition, Mr Pleitgen regularly appears

ap-in television programs on WDR and ARD, both as presenter and reporter

David Waterman

Professor, Department of Telecommunications, Indiana University

David Waterman is Associate Professor in the Department of munications at Indiana University, Bloomington, since 1993 He was pre-viously a faculty member of the Annenberg School for Communication atthe University of Southern California At USC, Professor Waterman taught

Telecom-in the Annenberg School’s Communications Management Masters gram and in the Department of Economics Prior to joining USC, Profes-sor Waterman was the principal of Waterman & Associates, a LosAngeles consulting firm providing economic, policy, and market re-search services to communications industry and federal government cli-ents He has also served as Research Economist at the NationalEndowment for the Arts in Washington

pro-Professor Waterman has written widely on the economics of the cabletelevision, motion picture, and other information industries He is coau-

thor of Vertical Integration in Cable Television (MIT Press, 1997) with

An-drew A Weiss His articles on market structure and public policy towardthe media, the economics of motion picture production and distribution,international trade in motion pictures and video products, and other topics

have appeared in Information Economics and Policy, Journal of

Commu-nication, Journal of Econometrics, Telecommunications Policy, Federal Communications Law Journal, and other academic journals and edited

books The Corporation for Public Broadcasting and the National ment for the Arts have supported his research Professor Waterman haspresented his research in testimony before the U.S Congress, and hasserved on expert panels or in an advisory capacity for the Federal Commu-nications Commission, the Federal Trade Commission, the U.S Depart-ment of Justice, and the General Accounting Office of the United States.Professor Waterman received a PhD in Economics in 1979 from Stan-ford University He completed his BA in Economics at USC.

Endow-Stephen Whittle

Controller, BBC, Director of the Broadcasting Standards Commission

Stephen Whittle returned to the BBC as Controller, Editorial Policy, in July

2001 Since 1996, he had held the post of Director of the Broadcasting dards Commission Before moving to the BBC, between 1993 and 1996, hewas the Chief Adviser, Editorial Policy, of the BBC, and was responsible,among other things, for writing the first edition of the BBC Producer Guide-lines Between 1989 and 1993, he was Head of Religious Programs for theBBC In 1977, from the World Council of Churches, where he was the Dep-uty Director of Communications, Mr Whittle joined the BBC in Manchester

Darcy Gerbarg and Eli Noam

Columbia Institute for Tele-Information

Internet television is the quintessential digital convergence medium, ing together television, telecommunications, the Internet, computer appli-cations, games, and more It is part of a historic move from individualizednarrowband capacity, measured by kilobits per user, to one of broadbandwith a capacity of megabits per user This move will have major conse-quences for many aspects of society and the economy, similar to the im-pact the automobile had when it replaced trains, horses, and bicycles Itwill affect, in particular, the medium now called television

putt-What exactly is Internet television (TV)? There is no agreement on a inition It comes with different names—web TV, IPTV, enhanced TV, per-sonal TV, and interactive TV, for example—which signify slightly differentthings At the lower end of complexity, it is merely a narrowband two-wayInternet-style individualized (“asynchronous”) channel that accompaniesregular one-way “synchronous” broadband broadcast TV or cable ThisInternet channel can provide information in conjunction with broadcastprograms, such as details on news and sports, or enable transactions (in-cluding e-commerce) in response to TV advertisements This is known as

def-“enhanced TV.” At the other end of complexity is a fully asynchronoustwo-way TV, with each user receiving and transmitting individualized TVprograms, including direct interaction in the program plot line In between

is one-way broadband with a narrowband return channel that can be used

to select video programs on demand (VOD) What Internet TV is today andcan be in the future forms the context of this book

xxi

This new medium is knocking at the door Already, music is reachingmillions of listeners around the world through the Internet Video clipshave traveled likewise It will not be long before popular video programsare regularly delivered over the Internet as well, at significantly betterquality and lower cost People with broadband connections alreadydownload feature-length films, and in Japan, Yahoo BB is launching aportal of video channels.

Every new medium starts as a substitute and then evolves into thing quite new Internet TV, too, will first be used to access video serversthat store existing programs, making them available for viewing at anytime But soon, going beyond the convenience of viewer choice and con-trol, Internet TV will enable and encourage new types of entertainment,education, and games that take advantage of the Internet’s interactive ca-pabilities This assumes, of course, technical capability and economic via-bility, subjects of analysis in this volume

some-This book is organized into five major sections: Infrastructure tions, Network Business Models and Strategies, Content and Culture, Pol-icy, and Global Impacts Each section is introduced here

Intermediate solutions include the squeezing of more transmission pacity out of an existing basic infrastructure Advanced variants of digitalsubscriber loops (DSL) are one example Signal compression, caching,and mirroring are other approaches The infrastructure consists of net-works, servers, home terminals, various forms of software, and content.Many approaches require the technical interoperability of a variety of hard-ware devices and software Internet TV therefore requires cooperation be-tween several industries, which has contributed to the difficulties indefining technical standards

ca-This section begins with an introduction to the possibilities of Internet

TV by A Michael Noll of the Annenberg School for Communication at theUniversity of Southern California and the Columbia Institute for Tele-Infor-mation He describes the technologies that make Internet TV possible.Noll reviews the past efforts to introduce broadband video and points to to-day’s technical, business, and other challenges Noll defines the future ofInternet TV as the convergence of broadcast and the Internet He ends this

chapter with a discussion of various possible scenarios and identifies certainties in this path.

un-Andrew Odlyzko, of the University of Minnesota, discusses the tions of Internet TV for long distance networks He explains why there will

implica-be plenty of bandwidth in the backbone of telecom networks to carryvideo But, because transmission capacity will be vastly more expensivethan storage capacity, the trend will be toward store-and-replay models

In his second chapter, Noll provides technical specifications and quirements for Internet TV, including reviews of delivery infrastructureand compression He challenges some technical assumptions and usagedata while pointing to problems and solutions arrived at in radio, satellite,and cable distribution He looks at the changes radio has undergone withthe advent of the Internet and projects similar changes for television Hepresents various delivery options and reviews alternative technologicalconvergence scenarios, concluding with a review of open technical andother issues that require resolution

re-NETWORK BUSINESS MODELS AND STRATEGIES

Although the technical issues that must be overcome are complex, theypale before the business challenges Simply put, no one has found away to make Internet TV a financial success Early Internet TV contentcompanies struggled to develop a customer base Some companiestried to create original content to gain new audiences, but this provedvery expensive All seemed to have overestimated the attractiveness ofthe medium at the time A major problem encountered was that audi-ences expect a similar production quality from Internet TV that exists inbroadcast and cable television

The revenue side is equally daunting Audiences accustomed to ing Internet and broadcast TV content for free expect Internet TV to be sim-ilarly priced One major challenge for Internet TV is to create content forwhich people are willing to pay This may entail completely new forms ofcontent or conventional programs offered in new ways

receiv-Advertising has been the major source of revenue for broadcast sion and it may also eventually support Internet TV But despite the prom-ise of choice demographics, transaction tie-ins, and individual viewertargeting, advertisers still do not see a sufficient number of consumerswatching video programs on computers to justify spending their dollars onInternet TV Other potential revenue sources include promotional pro-grams, or subsidies by established media institutions that are seeking toestablish themselves in this new field This last source might well be theeconomic foundation of Internet TV for some time

televi-Michael L Katz of the Haas School of Business at Berkeley addressesbusiness issues, beginning with industry structure Katz seeks to deter-

mine how Internet TV might function in a world without distribution necks He focuses on how Internet distribution will impact the televisionindustry and points out four technological trends that will effect competi-tion in each segment of the television value chain He looks at vertical inte-gration and bundling and analyzes their consequences for consumers and

bottle-TV companies He concludes that consumers will be the winners and cal broadcasters will be the losers

lo-David Waterman of Indiana University identifies five economic acteristics of Internet technology and shows how they will lead to greaterefficiencies Economic models for content providers are developedbased on his examination of the economic characteristics of Internettechnology and how greater efficiencies are likely to shape them Water-man uses historical evidence to predict that niche programs will flourish

char-on the Internet but that high productichar-on value programming, particularlyHollywood movies, will continue to have a broader appeal His implica-tion is that, despite its potential reach, Internet TV may not have the cul-tural impact Hollywood enjoys

Bertram Konert of the European Institute for the Media points out thatnew entrants and audience fragmentation are changing traditional mediamarkets In the long run, as bandwidth penetration increases, Konert seesInternet TV providing the new TV distribution system and recognizes thebroadcasters’ need to explore this distribution channel Nonetheless, heargues for broadcasters to focus their efforts on developing multiple,self-supporting revenue streams and reminds them that return on invest-ment is more important in the long term than the number of web impres-sions Konert also warns against the continued subsidization ofunprofitable engagements with revenues from profitable divisions.POLICY

This section of the book looks at policy issues, including copyright and ulation It begins with a discussion of the regulatory climate for Internet TV

reg-in the United States and expands to a global perspective The role of publicservice broadcasting is reviewed One concern is that an information gapwill emerge in society Other issues involve content censorship, accessregulation, cultural protection, copyrights, and compulsory licensing Theway that governments will regulate Internet TV is an open issue Copyrightlaws may have to be adjusted

Government regulators in the United States and elsewhere are looking

at what role they should play in Internet TV With too much regulation, newentrants may be excluded from creating and distributing new kinds ofInternet TV content But, left to themselves, problems may emerge, such

as monopolization, consumer fraud, and programs potentially harmful tosome viewers There is also the question of which rules apply Several tra-

ditional regimes for regulating telecommunications, broadcast, cable TV,and the print press exist It is not likely that migrating one or another ofthese to Internet TV will work.

Robert Pepper of the Federal Communications Commission takes alook at the consumer content industries in the United States and on whole-sale transmission He sees a credible group of new entrants investing sub-stantial dollars in infrastructure, and is encouraged that competition iswell on its way Pepper explains the past and present regulatory regimes

He points out the current dilemma concerning which regulatory model touse, if any, for Internet TV He believes that complex intellectual propertyissues form the biggest barrier to Internet TV

Christopher Marsden of the Economic and Social Research Council(ESRC) Globalization Center at the University of Warwick identifies and ex-plores seven “pillars” of video over the Internet, namely, security, propertyrights, revenue, quality, access, standards, and competition He contendsthat it is necessary to have a more legally certain international allocation ofproperty rights to secure content from unauthorized use Marsden alsoprovides a review of current and developing technical standards He con-cludes by examining competitive and oligopolistic scenarios for nationaland global market development

Kenneth Carter of the Columbia Institute for Tele-Information points outthe difficulties in implementing boundary-less Internet TV content in atelevision distribution environment divided into geographically definedbroadcast regions He reviews the history of the growth of this distributionnetwork from its roots in analog radio to the present Carter focuses on theintellectual property and distribution rights issues facing Internet delivery

of video content He points to potential consequences for content tors should they fail to grasp the opportunities offered by the Internet.Michael Einhorn of William Patterson University and CITI examinesbroadcast content copyright and licensing issues arising from new cre-ation and distribution opportunities on the Internet He believes thatcyber-programmers will be able to time and space shift, edit, personalize,and repackage digital content at will to create new programs and venues.Einhorn acknowledges that the U.S Copyright Office is correct in its deter-mination that compulsory licensing for pricing retransmission is inappro-priate He then goes on to suggest, however, that such licensing might beappropriate in specific instances

distribu-Fritz Pleitgen of the major German broadcaster, WDR, believes that it isthe role of public service broadcasting to be the communications platformfor all He relates the efforts of German public broadcasting and its dual TVdigitization and Internet initiatives that reflect their position on the futurecoexistence of the Internet and broadcasting

Stephen Whittle of the British Broadcasting Corporation addresses ulatory issues and global inequality He stresses the differences between

reg-illegal, unlawful, and harmful content and how to deal appropriately witheach He addresses the global issue of haves and have-nots—the “digitaldivide.” Whittle speculates that an interest in the public, particularlythrough education and culture, might be broadband’s means to success.CONTENT AND CULTURE

This section looks at what content is available, who is creating it, and howconsumers view Internet TV content Television viewing has been a pas-sive experience in which viewers, often in groups, sit back and relax intheir seats Computers, in contrast, encourage a leaning forward posture,require more participation, and is usually a solitary activity

John Carey of Greystone Communications examines the consumer mand for Internet TV His research looks into the homes of ordinary Ameri-cans to show how technology is being used and how people’s lives andhomes have adapted to accommodate it Carey notes that the use of com-puters in the home, coupled with the new opportunity to view Internet TV

de-on these machines, has changed the way people organize their livingspaces His seeks to understand how people will choose to view televisionprograms in the future based on changing consumer behavior today.Jeffrey Hart of Indiana University asks whether Internet TV will be more

of the same old TV He explores the content companies and their businessmodels, as well as the types of Internet TV content created Hart dividesInternet TV providers into several categories He analyzes both new forms

of intermediation made possible by Internet delivery and the strategies ofleading streaming media players

Gali Einav of Columbia University provides a look at the broad range ofcontent companies that create and distribute interactive TV programsover the Internet Her study gives an overview of the content side of this in-dustry She defines and examines the content provider landscape, whichincludes television broadcasters, Hollywood studios, independent pro-ducers, content syndicators and licensors, and user-generated content.Einav shows that Internet TV content models are based on both originaland repurposed programming Many of the early content companies didnot survive Constant adaptation to the environment has been essential tothe rest The traditional television content developers, including the TVnetworks, sustained losses and encountered technological limitations.GLOBAL IMPACTS

There are differences between how Internet TV is being introduced andreceived in the United States and in Europe Many factors contribute tothese differences, including technology and standards considerations, aswell as Internet adoption and usage patterns that vary by country This last

section takes a look at some future global prospects for Internet TV tent creation and distribution.

Eli Noam, Director of the Columbia Institute for Tele-Information, cludes the book with a discourse on the role the United States continues toplay in television content creation and global distribution To answer thequestion of the role of Hollywood in global content, Noam examines firstthe cost structures for several major different media: broadcast, theater,film, broadcast cable, TV, and Internet video Among the electronic media,Internet TV is by far the most expensive method for distributing content It

con-is also fairly expensive to produce content for it Thcon-is leads to an analyscon-is ofwhat kinds of video content might be distributed over the Internet Thesecontent types are premium VOD movies, specialized programs for dis-persed niche markets, and interactive multimedia programs The latter, inparticular, also requires large production budgets, marketing skills, andadvanced technology Because the United States excels in supplying thesecomponents, Noam believes that it will continue its dominance in contentproduction and distribution for traditional media with Internet TV But, hepoints out, this U.S dominance may trigger cultural and trade wars overInternet TV issues that will affect the move to an individualized Internet TV.Thus, major obstacles must be overcome if Internet TV is to succeed.The road to its success is far more complex than the one from over-the-air

TV to cable Sufficient transmission capacity at the global, national, local,and home levels must be provided Practices long established in thebroadcast and cable industries must adapt New business models and anadjustment in the value chain for TV content distribution are needed Orig-inal Internet TV content productions must take advantage of the uniqueproperties of computers and the Internet Consumer behavior needs toevolve toward an acceptance of paid Internet content, and sufficient audi-ences must emerge Regulators need to adjust their rules to a TV mediumthat is not based on scarce spectrum The difficulties in achieving thesemajor changes, in contrast to the hype surrounding it, have contributed to

a slow start for Internet TV

It may take awhile before both traditional and new kinds of broadcastquality television programming are regularly delivered and viewed over theInternet This provides an opportunity to do a better job creating this newmedium than was done with traditional TV broadcasting It means there is achance to get the economics, culture, technology, and policy right Internet

TV provides an exciting chance to return to the creativity of a new beginning

Infrastructure Implications

of Internet TV

Internet Television:

Definition and Prospects

A Michael NollUniversity of Southern California

The Internet has been increasingly used during the past few years as ameans to listen to radio shows in real time and to download audio Thedownloaded audio could be music recordings (although copyright in-fringement has become an issue) and recordings of meetings and talks.The downloading of audio may extend in the near future to include thewidespread downloading of video programming, perhaps even in realtime, or what today is called video streaming

Broadcast television is increasingly digital (Noll, 1988, 1999), so thetransmission of video in digital form over the Internet on a broad basis may

be appealing Meanwhile, the display technology of the TV receiver andthe personal computer are already similar, and TV sets are increasingly uti-lizing the processing power of computer technology Thus, the technolo-gies of the TV set and the personal computer are converging

All paths appear to converge on Internet television (TV), as depicted inFig 1.1 Perhaps this convergence should be called “The Internet MeetsHollywood!” or “Video Meets the Internet.” It is clear that the term “TVOver the Internet” is probably too narrow because it implies the use of apacket-switched data network to deliver conventional television video.Internet TV could be much broader and all inclusive than just this narrowdefinition All these various forces focusing their energies on Internet TVmight create an implosion of activity in the future, as shown in Fig 1.2, or

1

FIG 1.2 All the forces and developments in computers and television tralize on Internet TV Whether all these forces focusing their energy onInternet TV will cause an implosion or not remains to be determined

cen-all the activity might create so much confusion and diffusion that somereal opportunities could be lost along the way.

INTERNET TV DEFINED

What is Internet TV? The definition depends on the definitions of televisionand Internet Although the two terms might seem quite clear, they both areactually evolving with different meanings to different people

In 1945, everyone knew that television was the broadcasting of movingimages, along with sound, over the airwaves to homes for viewing on atelevision receiver The content of these early days of television was news,movies, drama, sports, and variety shows Later, television evolved to in-clude the distribution of video content over coaxial cable, videotape, andvideodisc Although the distribution technology evolved, the content re-mained mostly unchanged

Today, the media continually touts that “the Internet is everything.”With consumers routinely downloading audio recordings and programsover the Internet, the next wave will be the routine, widespread down-loading of video in real time over the Internet—a technology known asvideo streaming Alternatively, video could be sent as a large file transferand viewed at a later time Either way, this could be the death knell of con-ventional television broadcasting, the video rental store, and such physicalmedia as the digital videodisc (DVD) Consumers would then be able topick and choose any video and television program for downloading andviewing at their convenience The old dream of video-on-demand (VOD)will finally be realized

But the network capacity required to transmit lengthy high quality videomaterial to tens of millions of consumers will be costly and complicated todevelop The Internet is already used to download video shorts and car-toons Some of this new video material is interactive, creating a new form

of interactive television (ITV)

The definition of Internet TV obviously depends on the definition ofthe Internet At the lowest infrastructure level, the Internet is a packet-switched data network consisting of transmission links and packetrouters, linking computers around the globe The Internet also meansthe protocols used for specifying the transmission and routing of pack-ets of information The Internet is the browser, such as Microsoft® Ex-plorer® and Netscape® Communicator™, used to access and displaythe information obtained from Web sites on a personal computer in afriendly and easy-to-use fashion The Internet is the general concept ofthe hypertext markup language (html) that is used to allow easy link-ages between different sources of information along with friendly dis-play And lastly, the Internet is the look and feel of the information

accessed and displayed in color and graphics from various Web sites.Clearly, the Internet is many things.

The various key features of the Internet are as follows: look and feel(color/graphics), browsers, hypertext markup language, Internet protocolfor packet switching, and worldwide packet network for data transmission.What this all means is that the definitions of both the Internet and televisionare evolving Hence, the definition of Internet TV, because it combines ele-ments of both, is also evolving and is not yet clear Therefore, the technologyand future of Internet TV are somewhat speculative because of this uncleardefinition If the definition of the “it” is unclear, then most consumers willnot buy “it,” and the “it” will have problems in the marketplace or evolve into

an “it” that is less hazy and more clearly defined

INTERNET TV CAN BE MANY THINGS

Internet TV is many things, or even a combination of things In its most vious implementation, Internet TV is conventional television obtainedover the Internet Rather than watching television programs broadcastover the air or over cable, television programs are accessed over theInternet and then watched in real time, using a technology known as videostreaming Not only conventional television, but also cartoons and videoshorts, are sent over the Internet with video streaming All this video iswatched on the personal computer Computer technology will be incorpo-rated within future television sets to facilitate television access over theInternet The television set thus converges with the personal computer.Internet TV is the adoption of an Internet-like interface in accessing andwatching television—a new form of video navigation over the Internet.Internet TV is a more interactive approach to controlling the television ex-perience with the ability to obtain all sorts of ancillary information whilewatching television, as promoted by Wink Communications

ob-Internet TV is the use of the home TV set to view ob-Internet sites, as offered

by WebTV Networks, perhaps in conjunction with conventional televisionviewing These kinds of applications of Internet TV create an interactivetelevision experience called Internet-enhanced TV Such Internet-en-hanced TV could then evolve into Internet-delivered TV on a wide basis.Internet TV is the use of the Internet protocol to store and transmitvideo, both at the TV studio and also to various locations Rather than stor-ing and transmitting digital video as a continuous stream of bits, the digitalvideo is packetized into the packets specified by the Internet protocol.EVOLUTIONARY CONVERGENCE

The personal computer is the device in the home used to access theInternet through a modem connected either to a telephone line or to a co-

axial cable The personal computer is situated at the home work center.Television is watched on the home television receiver, physically placed atthe home entertainment center Will the personal computer evolve into anentertainment center? Will the home television receiver become themeans to access the Internet, as promoted by Web TV? Or will televisionreceivers of the future increasingly adapt digital technology for entertain-ment purposes, leaving the personal computer as a separate work appli-ance in the home?

LESSONS FROM WEB RADIO

Radio is being changed because of the Internet Will similar changes cur to television? Consumers in rural areas now “listen” to the radio overthe Internet A colleague in rural New Hampshire accesses WQXR in NewYork City over the Internet to listen to classical music Will radio stations re-turn their broadcast licenses as they migrate to the Internet?

oc-Indeed, there is growing evidence of a much broader market for radiostations beyond their local market But there are more technologically effi-cient ways to extend this reach than the use of the packet-switchedInternet One way would be geostationary satellite transmission of all ra-dio stations Just two satellite transponders could handle 10,000 radio sta-tions in a compressed digital format But would small inexpensive satelliteradio receivers be developed?

Internet TV could then simply evolve into a form of “world TV” in whichall television programming from the entire planet would be transmitted bysatellite to everyone on the earth The capacity to do this would requireonly a few geostationary satellites

A LITANY OF FAILURES, YET CAUSE FOR HOPE

An issue of The Economist characterizes “the digital revolution in

enter-tainment … [as] somewhere between a disappointment and a disaster”(Duncan, 2000) Indeed, much of the rhetoric of Internet television is verysimilar to the words of the recent past about such technologies as videodialtone (VDT), video-on-demand (VOD), interactive TV (ITV), and fiber tothe home (FTTH) Unfortunately, these technologies are a litany of failures,along with such others as Web TV and high-definition digital TV

The stereotypical image of the television viewer as a couch potato isbased much on reality Most TV viewers do not want to interact with their

TV sets, other than to click the remote to change channels (Hansell, 2000).However, the British and many Europeans do interact with their TV sets viateletext—as yet, the only successful form of interactive television (Noll,1985) Teletext transmits a few hundred frames of text and graphics duringthe vertical blanking interval of a television signal Because of confusion

over standards, teletext never developed in the United States The success

of the Internet, which offers access to far more information than teletext,means that teletext has a dim future

Interactive two-way television was pioneered decades ago by WarnerCable in Columbus, Ohio The Warner QUBE system was initiated in 1977,but was later terminated in the late 1980s Although all sorts of wild prom-ises were made for its application, a major use of QUBE was to obtain in-stant audience reaction to new programs

Web TV offers Internet access over the home television receiver using

a keyboard that attaches to the telephone line and to the TV set for play The service has met with very little consumer acceptance (“What-ever Happened to WebTV?,” 2000) Yet, the predictions of a huge marketfor interactive television continue to be made, with Forrester Researchpredicting over 20% of TV revenue from smart set-top boxes by 2005(“Microsoft’s Blank Screen,” 2000)

dis-GTE offered all sorts of interactive, two-way, broadband video inCerritos, California, from the late 1980s to the late 1990s The consumer in-terest simply was not present for the video-on-demand (VOD) service In

1992, Bell Atlantic promised to deploy optical fiber in the local loop forvideo dialtone (VDT) and predicted to have 1.2 million homes connected

by end of 1995 Nearly 6,000 homes in Dover Township, New Jersey, wereconnected to an optical fiber system in 1996, only to be disconnected a fewyears later The service was apparently far too costly to continue to offer.Bell Atlantic has never explained the reasons for withdrawing the service.High-definition television (HDTV) doubles the number of scan lines ofconventional television HDTV is being used in the TV studio to capturevideo in a high quality format HDTV is also being broadcast in a digital for-mat in an additional channel in the UHF spectrum given to conventionalVHF broadcasters Consumers, thus far, have shown little interest in HDTV

A key issue will occur over what to do with all the UHF spectrum given tothe broadcasters for a service that is little watched

The telephone network is a switched audio network It could have beenused as a means to call radio stations to listen to programs on a switchedbasis But the switched public telephone network is not used that way, per-haps because of the cost Listening to radio programs over the telephonenetwork at 5 cents per minute equates to $3 per hour, which is quite pro-hibitive The advantage of the Internet for doing the same thing is that theInternet is “free” to consumers and does not have usage sensitive pricing.The concept of broadband to the home is not new and was first pre-sented in the 1970s The “broadbandwagon” keeps rolling along, rein-venting itself every few years (Noll, 1989) A decade ago, it was fiber tothe home (FTTH) and fiber to the curb (FTTC) Today, it is Internet TV, butthere is a history of failures of this “highway of dreams” of an informationsuperhighway (Noll, 1997a) Those who are able to maintain hope

against the overwhelming tide of failures will say the time is now, but itmight be still just too soon.

UNCERTAINTIES ABOUND

There are technological challenges and hurdles that would need to beovercome for Internet television to become a reality However, the real un-certainties are not technological in nature but involve consumer needsand behavior, industry structure, and finance In addition, there are issuesover copyright and ownership protection that would need to be resolved.The Internet is mostly “free” except for a fixed monthly access chargepaid to the Internet access provider But if there were tremendous use ofthe Internet to send huge amount of video data, usage sensitive pricingmight be needed (Noll, 1997b) Even a usage charge as low as 0.1 µ¢/bit(0.1 × 10–6cents per bit) adds up quickly when video data is sent continu-ously at 4 Mbps A minute of such Internet high quality video would incurusage charges of 24 cents, which is prohibitively expensive However,there are many other uncertainties about Internet television

Are consumers demanding Internet television? Do consumers want tointeract with their television sets? Is it possible to overcome the history ofthe past failures and false promises of video dialtone, video-on-demand,interactive TV, and fiber to the home?

Is Internet TV a revolution or will it become yet another evolution in thedistribution of video programming in digital form? As bandwidth continues

to become available, will consumers demand improved quality so thatcompression is no longer wanted or needed? Is Internet TV a way to be en-tertained or a way to obtain information? How will conventional broad-casters respond? Is Internet TV just an evolutionary enhancement ofdigital CATV? Will new unexpected applications evolve and change theInternet TV landscape? What will Internet TV cost, who will finance it, andwho will afford it? The answers to these key questions are currently un-clear Thus far, Internet TV has been driven mostly by technology push.Will consumer pull develop, thereby leading to success? Only time will tell.ACKNOWLEDGMENT

Many of the definitions of Internet TV presented in this chapter are a result

of discussions with Darcy Gerbarg, and her contributions to this chapterare gratefully acknowledged

REFERENCES

Duncan, E (2000, October 7) E-entertainment thrills and spills The

Econo-mist, p.6.

Hansell, S (2000, September 20) Clicking outside the box The New York

Noll, M A (1991) High definition television (HDTV) In A A Berger (Ed.),

Media USA (2nd ed., pp 431–438) New York: Longman.

Noll, M A (1997a) Highway of dreams: A critical appraisal of the

commu-nication superhighway Mahwah, NJ: Lawrence Erlbaum Associates.

Noll, M A., (1997b) Internet pricing vs reality Communications of the

ACM, 40(8), 118–121.

Noll, M A (1998) The digital mystique: A review of digital technology and

its application to television Prometheus, 16(2), 145–153.

Noll, M A (1999) The evolution of television technology In D Gerbarg

(Ed.), The economics, technology and content of digital TV (pp 3–17).

Boston: Kluwer

Whatever happened to WebTV? (2000, September 16) The Economist, p 75.