With ad-based model, IPTV goes Dutch

A Dutch company is trying to bring IPTV to the masses over the Internet via a business model that uses corporate sponsorships to subsidize distribution of a key piece of hardware that ties together Internet video with existing video products.

In essence, United Content Distributors is doing something very similar to what AT&T’s HomeZone product does, which is to use a distinctive piece of hardware – AT&T uses a 2wire box – to tie together cable or satellite video service with Internet video access and present it on the television screen.

UCD is going several steps farther, however, in its approach. Its Daily Media product features a set-top box that it expects corporate sponsors to provide to consumers at no charge, in exchange for placing their corporate brand on start-up pages. The Daily Media set-top box connects to the Daily Media portal and enables open access to Internet-based video of all types and multimedia applications as well.

“With the model we are using, the box is not being sold, it is being delivered to the consumer for free by distribution partners,” said John Goedegebuure, spokesman for UCD. “It can be part of a loyalty program from Walmart or Sears or a local car dealer. You buy a new Dodge and get the box for free, provided by Dodge or Cadillac. The box connects to a whole bunch of things on the Internet, plus you can link your cable TV or satellite TV service into the box, but you watch all that through branded pages that are Dodge-branded pages. You switch on your TV in the morning, and it shows what is the most important thing – local weather and traffic – but you also have a Dodge-branded page for the user interface. In addition, there are two positions which are branded positions, which could be resold to third parties.”

Daily Media will be field tested this month by Vigcom, a cable operator in Krimpen, The Netherlands, and with OBR, a triple-play provider with a fiber-to-the-home network in the City of Rotterdam. The company expects to have a base of 200,000 customers in the Netherlands by the end of 2008, Goedegebuure said.

Daily Media supports Windows DRM 10 and Macrovision Copy Protection and is intended as an open platform that doesn’t interfere with access to any content, he said. The box costs about $210 to manufacture, which UCD is doing in Asia, and because it doesn’t have a hard drive, it doesn’t have major cooling or power issues, Goedegebuure added.

There are 28 different potential revenue models for the service, which include revenue-sharing of video-on-demand offerings or video subscription services.

“In addition, it comes with a Web cam, also for free, and a wireless keyboard,” he said. “Everything is done with a remote control, which actually enables customers to use their TV set as well, so you can go from a number of remote controls to only one.”

A consumer phone system can be connected to enable a voice/video connection for things such as medical monitoring, he added. “As long as there are boxes on both ends, you can talk to anybody,” Goedegebuure said.

UCD is prepared to deploy its boxes globally and believes the technology will evolve to enable greater communications of all types with the home, he added.