Pictures of the Future      Fall 2005

Tuning in to Internet TV

W hat’s long been normal on PCs can now also be done by a television—Internet providers can now use fast broadband connections such as DSL to provide television sets with back channels to broadcast stations. This enables them to offer a wide range of services including audio, video and Games on Demand as well as Internet and communication services such as e-mail, video-phoning, SMS and MMS.

As the market leader in this area, Siemens now offers a complete Internet TV package in the shape of the SURPASS Home Entertainment System. Fundamental modules for this system are supplied by U.S. software manufacturers Myrio and Verimatrix. Myrio, which has 75 employees and is based in Seattle, supplies the software for associated set top boxes, as well as the control infrastructure for providers. A module can, for instance, offer the user digital television with pause and record functions, Video on Demand with Pay Per View, digital music transmission, Internet access for the television set and a child lock function. Providers can, in turn, utilize modules to perform subscriber administration, fee accounting and content management. "We analyzed the new home entertainment market segment over three years," says Gerd Goette, investment partner at Siemens Venture Capital (SCV), which provided Myrio with venture capital in 2003. "We soon realized that Myrio was in a unique position with its complete solution." Additionally, the company had already proved its operating efficiency with more than 65 customers worldwide. "For this reason," according to Goette, "Siemens absorbed Myrio into the Group in the Spring of 2005."

Digital Watermark. The downside of digital films, however, is that, like MP3 files, they can be copied, processed and illegally distributed without any loss in quality. "Internet TV can only succeed if it provides interesting content. However, protection has to be provided for the film studios’ copyrights," says Steve Oetegenn from Verimatrix Inc.—a security software manufacturer in San Diego, California.

The Verimatrix solution encrypts the digital video signals between the set top box and the provider’s video server. After identification, the set top box and all other transmission network components request the key from the video server and utilize this to decode the data. Due to the fact that the keys are changed thousands of times during a film, any attempt to illegally tap in on the transmission can be immediately detected.

Verimatrix is also the only software house to brand data with multiple watermarks. The watermarks are small packets of data that are inserted within a film, enabling the identification of the outgoing server, the nodes and the recipient. This allows the complete "history" of the media file to be traced. Verimatrix servers check media files, which are circulated on the Internet, for these watermarks and thus are able to identify pirate copies and their authors. The invisible watermarks cannot be separated from video content and therefore cannot be removed from digital files. Verimatrix cooperates closely with Myrio. "Our collaboration with Verimatrix has proved very successful on a global scale, and we are very pleased that we can now expand our offer to include a complete security solution," says Ryan Petty, Vice President of Product Management at Myrio. In January 2005, Siemens Venture Capital also invested in Verimatrix, thus rounding out its portfolio of home entertainment solutions.

Three major telecommunication companies are already either applying or planning to apply technologies from Myrio and Verimatrix: Belgium’s Belgacom, the Netherlands’ KPN, and ADC from Thailand. Belgacom began tests in the fall of 2004 with around a thousand subscribers in three cities (see  In Brief). Internet TV has been broadcast throughout Belgium since mid 2005. Belgacom now estimates that it will soon have a million customers. Goette is also optimistic. "Business has developed much more positively than we expected," he says. "Myrio and Verimatrix have proved to be the ideal partners for further rapid growth in this young market."
                                                                                                                   Bernhard Gerl