With 3G handsets at the doorstep to the mass market, entertainment could really become fun for telcos. According to a survey by the Mobile Entertainment Forum and Booz Allen Hamilton, nearly half of Germany’s mobile customers (46 percent) listed ‘fun’ as the main reason for using mobile data services. However, it is rather doubtful if the majority of mobile users will buy 3G handsets primarily for entertainment purposes. The result of a European user survey by TNS Telecoms was that 77 percent rated e-mail and videotelephony as their favoured 3G mobile data services. Downloading music files and video clips only appealed to 40 to 47 percent.

More service offers for mobile gaming might change this attitude. In February, Nokia launched their handheld games platform N-Gage. Mobile operators like T-Mobile, O2, and Vodafone have already established mobile games platforms in 2002. The analysts from Strategy Analytics predict that there will be 100 million mobile gamers by 2006. However, Tim Raby, Head of Games at O2, cautioned telcos against exaggerated enthusiasm. He said that mobile broadband gaming is “no panacea” and added that even with 3G the mobile gaming experience would not exactly going to be high-adventure “shoot-em-ups”.

Even if you add mobile betting and other forms of mobile entertainment, it seems that in the foreseeable future broadband entertainment over fixed lines will further dominate. Especially broadcast television still plays a central role in future scenarios for home entertainment. According to recent Eurostat reports consumers in Europe use about 40 percent of their free time to watch television. In various convergence scenarios, TV is seen as an access point for consumers into the world of broadband services including entertainment. However, if we look at the actual development, the convergence of TV, computer and Internet has not taken off. The recent failure of pay TV broadcasting station Premiere and set-top boxes in Germany is an indication for the reluctance of consumers to do more with TV than just passively consume what is on the broadcasted programme channels. Research by the German BAT institute confirms that the majority of users is not interested in interactive entertainment, but would like to lean back and enjoy the show.

Attempts to converge the TV with computing and interactivity via telecommunications went hand in hand with the digitisation of content. Thus, it is not surprising that telcos participated in convergence activities already in the 1990s. In 1991 TCI, US West and AT&T announced a first video-on-demand trial.

The main reason for entertainment services becoming an important issue for telcos has been the rapid growth of the Internet. The time people spend in front of computer screens is starting to outweigh the time people spend watching broadcasted TV. A large part of this time is devoted to entertainment via the Internet.

Since many of the entertainment services require the delivery of large amounts of data to the customer, one of the main obstacles for telecom operators was the limited bandwidth available at the residential customer. Cable TV companies and satellite operators had a clear advantage, because broadcasting was the cheapest and easiest way for delivering large amounts of content. On the other hand, on-demand and interactive services require an individual channel including a back channel for communication with the service provider and this is not an inherent feature of broadcast content delivery. Equipment that supports the services offered by cable and satellite operators had to be upgraded or the services depended on the availability of a phone line. The introduction of DSL and other technologies for fast Internet access in the telecoms networks clearly changed the situation in favour of the telcos who could now offer bandwidth from several hundreds of Kbit/s up to several Mbit/s. 

Broadband entertainment

The broadband revolution has enabled a broad range of new entertainment services and the enhancement of already existing ones. An overview by Eurescom project ERNIE is covered in this issue.

Higher bandwidth offered by broadband networks allows users to stream full-length movies and other video and audio content such as sports events or concerts. Many radio stations broadcast on the Internet, allowing you to listen to live broadcasts of music, news reports and chat shows from all over the world. Sites such as www.web-radio.com give directories of radio stations that broadcast on the Internet.

On-line purchase and download of movies is offered by on-line movie services that operate over the Internet. Consumers can view the downloaded movies on their computers or on a TV set through a set-top box. Users have access to a library of movies at their fingertips, and save time by not having to visit a video store. 

The success of MP3

The download of MP3 music files from the Internet is probably the most successful online entertainment service of the past few years. The success is due to a complete, easy-to-use service including neat little MP3 players and self-explaining software packages. The download of MP3 music has become so successful that the searchword ‘MP3’ has even outweighed the searchword ‘sex’ recently. While there has been much attention given in the press lately to sites that provide free, but illegal music downloads, there are many legitimate sites – such as the iTunes music store – where music can be purchased and copyright is not violated. 

Interactive applications

For audio and video applications interactivity can be supported by a navigation function that enables the user to find, choose and select content items and products. To obtain information about charges and other conditions of use is a very basic requirement for most services. Electronic program guides (EPG) can support the user to navigate to content by date, time and content provider. Play control functions enable the user to interact and control the delivery of time-based media such as music and video content, by means of VCR playback commands like Play, Pause, Fast Forward, Rewind etc..

Another very different genre of interactive applications is online games (see report in this issue). Broadband can improve the gamers’ experience, but bandwidth alone is not enough. These applications require also low response time for requests and there have been already complaints that DSL is not optimised for this kind of interactive applications. ADSL offers in Germany provide an option called ‘Fastpath’ that improves response time basically by switching off certain error correction mechanisms that take place between the DSL-modem and the first switching node in the network.

Sensitivity for packet loss applies for interactive applications as well. Packet delays are even more unacceptable, since they would cause a time-shifted reaction of the service to user actions. Large buffers are not a solution, especially for services that support voice conversation.

Another aspect of online gaming that should not be underestimated is the desire for personal communication among gamers. Many games have an integrated chat capability, which is used by the gamers to organize alliances and agree strategies. But the chat functionality is also used for personal communication not directly related to an ongoing gaming session, effectively replacing a telephone call.

Producers of online game consoles, like market leader Sony with their Playstation 2, have understood the users need of being connected. They have started to offer online platforms for the gamer community. However, the current situation is not yet as envisaged by the console producers. Millions of stand-alone devices have been sold, but only very few of them are connected to the telecoms network. 

Currently, it is not so easy to play a game via game consoles against other remotely connected players. Even if the technical bits and pieces are available, the complete application is not obvious and easy to use, not to talk of trying to play an online game with game consoles from different producers. Online game console producers seem to be not extremely interested in standardising the online access of their products.

Protection of Intellectual Property

Fulfilling the technical and the user requirements is only half of the success in the entertainment game. To market and deliver the content you first have to have it. This sounds trivial, but as long as content owners are not sure their intellectual property is effectively protected, they are reluctant to deliver. The protection of intellectual property has become a major issue in recent years. Digitisation has provided the user with the capability to reproduce content without loss in quality and give it away for free to friends. In the last few years the music industry has claimed considerable lower revenues and profits due to popular file sharing tools available over the Internet; the most prominent example being Napster.

Today technology exists that can protect the usage of the content, namely Digital Rights Management (DRM). With DRM technology the content is encrypted and the user can acquire a license to play. Different business models and licensing schemes are possible. For example the user can be granted to view a movie once, or be granted to view a movie multiple times within one month etc. The Extensible Rights Markup Language (XRML) is a general-purpose, XML-based specification grammar for expressing rights and conditions associated with digital content, services, or any digital resource (www.xrml.org).

Nevertheless due to the late evolution of standards in this area the market for DRM is fragmented today and there are many proprietary solutions, which is a hindering factor for a faster take-up of on-demand and streaming content services. Eurescom project OPERA has identified this obstacle and is working on the definition and prototypical implementation of an open DRM architecture (see article in this issue).  This architecture provides a common way of handling licenses, by integrating existing DRM technologies and frameworks. It is open in the sense that future DRM technologies can also be integrated. 

Who wins?

Entertainment can be a very exciting and rewarding game for telcos. However, it is not yet clear, who will profit most in the value chain: the content providers, like Vivendi Universal, Bertelsmann, and AOL Time Warner; the platform providers, like Microsoft, Sony (also a content provider); the broadcasters, like Murdoch, AOL Time Warner, Vivendi Universal, and the cable TV operators; or will it be the telecoms network operators? This seems to be an open question. The statement that ‘content is king’ has been controversially discussed without conclusive result. Maybe ‘network is king’, who knows? As US comedian Jerry Seinfeld once said: “There is no such thing as fun for the whole family." On the other hand, the entertainment market may be big enough to guarantee fun for most members of the family.