Italy the next digital receiver battle ground...
"Irdeto". Hmm, that sound familiar...
UNCERTAINTY AHEAD FOR ITALIANS
02/22/99 Inside Digital TV
(c) 1999 Phillips Business Information, Inc.
It's a well known fact that the destiny of digital receiver manufacturers is closely linked with the strategic decisions made by pay-TV operators. In Italy, the decision to introduce digital boxes with Seca conditional access and the Media-Highway API, which followed the entrance of Canal+ as the majority shareholder in Tele+, brought about a change in direction for receiver manufacturers.
A prime example is Nokia, present in the Italian market since the launch of digital TV in 1996. Nokia has sold 150,000 digital boxes, out of which between 110,000 and 120,000 use Irdeto conditional access (CA). In November 1998, Nokia started distributing the first leased boxes containing the Canal+ Seca CA system and up until now 35,000 have been dispatched. Although Nokia claims to have received assurances from Tele+ that it will continue providing its service to all Nokia consumers with a Irdeto box, the pay-TV operator is clearly backing Seca. In fact Tele+ will soon launch a special offer aimed at enticing those subscribers who own an Irdeto box to substitute it with one which is Seca compatible, offering a six months free lease on the new decoder as an incentive.
Dutch electronics giant Philips, on the other hand, did not have to change its marketing strategy, having been the first official supplier of Seca boxes for Tele+'s parent company Canal+. Philips entered the Italian market in 1997, supplying Tele+ with decoders, which were offered for lease to subscribers (32,000 units have been supplied so far).
Pace, which has sold 100,000 digital decoders in Italy, has also bet on Seca, having given up more than a year ago on producing Irdeto boxes.
The Italian digital decoder situation is further complicated by the fact that market leader Tele+ has chosen to use two different technologies. This has caused problems, especially after the recent introduction of movies and sports events on a pay-per-view basis.
To date, Canal+ has guaranteed the compatibility between two technologies, Irdeto and Seca, by adopting Simulcrypt and thus transmitting two sets of codes. However, senior Canal+ managers are pressing for the substitution of the Irdeto boxes, which are not capable of managing the new interactive services. The Irdeto boxes which are available on the Italian market have been constructed to work with the OpenTV application programme interface (API), while Tele+ prefers to use the proprietary software MediaHighway, developed to work together with the Seca conditional access system. Simulcrypt overcomes any problems created by the CA, but the near-interactive services require the use of the Application Programme Interface (API), the software which enables the management of the "on-board computer" of the digital decoder.
At the moment the different API 'languages' are not compatible with each other which in practice means that the digital operators transmit their services in only one language. Consequently, subscribers with an Irdeto box have no possibility whatsoever of accessing the interactive services.
There are several possible solutions to this problem. First of all, the installed base of Irdeto boxes in Italy could be easily converted to a different API, which means that the digital operator would have to conduct the remote download of the new operative software.
However, much will depend on the exit of the negotiations, which could see Rupert Murdoch's News Corp Europe buying an 80 per cent stake in Stream, Italy's second digital platform. Stream has chosen Irdeto as the CA system and API Open TV. If Murdoch should chose to bring the NDS system VideoGuard to Italy, Pace would start in pole position, since it already has the license to produce NDS boxes and are one of the official suppliers for Sky Digital in the UK.
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