This month we interviewed Richard Bennett, president of Smart Video to find out why content licensing is important to the IPTV industry. What we learned surprised us and there are some things that you should know about obtaining content that can dramatically impact your business now and in the future.

Smart Video has been providing Internet video directly to consumers since 1999. Smart Video started as a technology business by directly distributing video content distributed on public Internet. Smart Video has evolved into a content distributor that is focused on providing video media to consumer audiences. Smart video targets distribution to any device capable of receiving IP video protocols. This includes IP set top boxes, IP Televisions, PDAs, multimedia desktops and even portable media players such as the iPOD.

Content aggregation is important because the cost of doing business with a content aggregator is more efficient than doing business between content owners and content distributors. Bennett explained that Smart Video provides content aggregation on both sides of the equation. For the left side (left brain), they work with content owners, developers and traditional media companies. For the right side (right brain), they manage all the relationships with telephone companies (Telcos), cable companies (MSOs), Wi-Fi and other types of IP distribution systems. He explained that the main reason why content owners and service providers use content aggregators is that one distribution agreement gives a content provider access to many programs and hundreds of markets. 

Smart Video works with cellular carriers, wireline carriers (DSL/TelcoTV), fiber optic carriers, IPTV distributors and satellite companies. Smart Video has two key types of distribution relationships; carrier distribution and independent distribution. Carrier distribution is the providing of media through service providers (such as cellular service providers) on a revue-sharing basis. Independent distribution allows Smart Video to distribute through any service provider that can provide an IP Connection to a consumer.

Bennett expressed how content owners, developers and producers are very concerned about keeping their content rights and avoiding 

the pirating of their content. To enforce and maintain their rights, they need to have technical ability and also should preform due diligence with their content distribution partners. By using a content aggregator who continually invests in content protection and DRM systems, the content owners can focus on producing or acquiring content to sell. 

He also explained how service providers (IPTV carriers) have thousands of choices for suppliers of content. IPTV carriers cannot afford to find, qualify and manage so many content providers so content aggregators simplify the process of gaining access to content. With regard to content licensing, Bennett mentioned that while there are many aspects to content licensing, there are two critical components: the technical platform and geographic limitations. 

The technical platform is the medium of distribution such as radio broadcasting, IP video to computers or video to mobile telephones. He warned that unlike certain types of agreements that allow a service provider to broadly define the technology platform (such as mobile or fixed access), content distribution agreements specifically state the type of technical platform or distribution medium that is authorized for distribution. If it is not explicitly described in the licensing agreement, is not included. For example, if a content licensing agreement states that it can be used for mobile phones, it does not necessarily authorize the distribution to multimedia computers.

He explained that content licensing agreements typically have geographic limitations. These limit the country or region where the content may be distributed. Bennett discussed that while traditional distribution networks that have physical locations can control the location of distribution points. This can be very different for networks that are IP based which may not be able to accurately determine the exact physical location of a customer.

Bennett express that there are many new licensing risks for content licensing that established companies and newcomers need to prepare for. These risks include knowing what content rights are available to assign and obtaining content from companies that are not authorized to provide the content. 

In general, the larger the number of media programs a company

manages, the less they may know about the specific rights that may be available to them. Some IP rights may have already been assigned or the company may not know the specific rights they are authorized to have.

For companies that are new to licensing video content, they may not understand the risks and penalties associated with distributing unlicensed content. These companies may not perform due diligence (research) to confirm the rights are available to license from the company that is providing access to the content. There are hundreds of people and companies who offer content who may not actually have rights or may not have sufficient rights to distribute in this medium. He said that "The single biggest challenge to content licensing is ensuring that the rights you think that you acquire are the rights that you actually own."

If content is distributed without a license, both the content distributor and/or access provider may be liable for copyright infringement. Bennett explained that there is no statute of limitations on copyright infringement so legal disputes can appear 5 to 10 years after the copyright infringement has started with potentially devastating civil and even criminal penalties. Companies will likely go after the companies with the deepest pockets.

To protect against this risk, content distributors and access providers must perform due diligence (research) to confirm who actually owns the rights. Content aggregators due this on a regular basis and they may be able to insure and protect against potential licensing disputes that arise.

Another content distribution issue is government imposed restrictions on the distribution of content in certain countries and violation of these restrictions can result in significant penalties or fines. The restrictions on content can dramatically vary between countries. Some of the restrictions include limits on product brand images (product placement), gambling services, allowing advertising commercials and recording information the viewing habits of consumers, culture-determined content such as nudity and violence.

Some countries (such as South Korea) impose product placement restrictions. Product placement restrictions are supposed to remove potential product bias (preferences) or associations that may be a result of the audience seeing a specific brand or product that is used in a movie or television show.

Another example about content restriction is not allowing gambling transactions (such as the United States) to be conducted on television. Muslim countries tend to have restrictions on nudity and violence and Canada is very restrictive on violence in video programming.

Because IPTV is a relatively new medium, it is not well monitored yet. This means that IPTV service providers may be able to distribute the restricted programming without being detected. However, as governments begin to monitor IPTV programming, penalties and significant fines can result. Content aggregators can help to identify and filter restricted media avoiding this potential risk.

Bennett discussed that there is a blurring of the boundaries of what is a service provider and what is a carrier. There are many new types of companies entering into the television industry; telephone companies (Telco), Internet service providers (ISPs), Wireless broadband (WBB) providers, data over powerline and other data service providers who will offer television programming. It is hard to describe what is a telco and what is a cable company. Soon there will be content providers and bit pipe providers.

Bennett states that there are a lot of old services that are being offered with new names and definitions. A key challenge will be speaking the same language.

Another important role for content aggregators is to provide accounting and auditing for the transfer and use of content. Content aggregators should provide daily metrics on program viewing, which are available online. The reports should include trend analysis that can 

be used to determine when programs are successful and when they are not successful. With IPTV, you can tell when people are not watching and when they stop watching.

Smart Video has proprietary video streaming technology that allows them to provide a high-quality viewing experience to virtually any multimedia devices that can be connected by an Internet protocol (IP) address.

Mr. Bennett is a co-founder of SmartVideo and since 2002 has been President and CEO of the Company, which delivers full-motion live and on-demand television to mobile devices. Prior to helping create the Company in 2000, Mr. Bennett spent two decades developing his management, entrepreneurial and technology skills with senior positions at such companies as Barco Display Systems, Electromagnetic Sciences, Zenith Electronics and InSouth Microsystems.

If you would like to contact Smart Video:

support@smartvideo.com