New Big Blue
IBM aims to enter iTV as integrator
By Karen Brown
from the May 21, 2001 issue of Broadband Week
Although its full name is International Business Machines, entertainment is gaining importance these days for the computing giant--specifically, systems integration and software aimed at goosing the interactive TV market. The question is, can Big Blue gain a foothold in these chaotic markets where there is no short supply of players?
Steve Canepa, IBM's vice president of global media and entertainment, thinks so. He points out that while better known for its computer hardware, IBM has built up a $35 billion service capacity in computing services. The company is now bringing that to bear on the burgeoning interactive TV market.
"As an enterprise looks to make things like wireless applications and iTV real, at the end of the day it is going to come down to being able to create a scalable, robust, global IT infrastructure that these applications can run on," Canepa says. "With our capabilities, where we really shine is in helping to make those infrastructures real."
One example of this is the prototype box IBM showed off at the recent National Association of Broadcasters' confab. It sported a 40-gigabyte hard drive and personal video recorder capabilities--all running on a single Big Blue chip design. While IBM wouldn't build such a box for mass production, it is the chip design and capabilities that it will offer to box makers.
Think of it as a computer inside the set-top box.
"All of the advanced processing capability we are putting into our most sophisticated microprocessing logic for computers is now migrating its way into these very robust consumer electronics devices," Canepa says.
Another piece creates products that help content providers manage production and distribution. iTV content programmers and producers want to make content interactive, but to do so requires some complex computer logic. Canepa acknowledges there are plenty of companies providing some aspect of content management, but he argues none knit the whole process together.
"The reality is today there is a whole potpourri of solution providers, but many of them are providing what I would call a point solution--a part of the overall workflow process, whether it is editing capability or digital compositing or effects or ingest ... there's just a whole set of providers out there," he says. "In many cases a lot of it will be just enabling other third-party providers work within this new ecosystem. So then, instead of solving a piece of the equation the customer can solve the entire equation."
While it may provide the nuts and bolts technology, IBM is not interested in crossing the content provider line.
"There are a number of providers in the technology field that have had trouble finding the line between technology enabler and being in the media business themselves," Canepa says. "We're very clear on where that line is. So IBM will not be in the media business but see our role as enabling the folks in the media business and those that support these new advanced capabilities in bringing them to market in compelling ways."
Aditya Kishore, an analyst with the media and entertainment planning strategies practice for the Yankee Group, does see a need for some systems integration in the early, chaotic interactive TV market. But that is likely going to be a problem, even for a heavy-hitting company such as IBM that now is seeking a foothold. With myriad companies in the field already offering pieces of video production, e-commerce and system integration, a wide-target product may lack the focus to gain traction.
"I do think that there is an opportunity, but it's really a question of identifying the market at a very granular level and really figuring out what niche you are best suited to address," Kishore cautions. "I think the times of broad, sweeping, end-to-end solutions is not really there at this point. You are not at a stage where nobody else is doing it, nor are you at a stage where the market is sort of reasonably mature and there is a clear business model and clear revenue streams coming in so you can step into a moment-share marketplace."
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