Verismo Networks, an Internet TV platform provider headquartered in the US, has an R&D centre in India. It has developed a customisable end-to-end solution for delivering Internet videos directly to the TV without the need for a PC.
Satish Mugulavalli, co-founder and chief architect of Verismo Networks, spoke to Dilin Anand of EFY about the Internet TV set-top box and its comparison with Apple TV and Google TV
Q. What made you think of direct delivery of Internet videos to the TV?
A. When we started in 2005, we noticed two things: Broadband penetration was growing at a tremendous pace worldwide. We had broadband starting in 2000 but pretty much in 2003, 2004 and 2005 we began to see ADSL2, ADSL2+ and cable modems with higher bandwidth. These were capable of large data transfers at high speeds.
At the same time, a lot of things were getting digitised. Digital cameras had reached a pretty serious tipping point, and cellphones started coming out with integrated digital cameras. As the cameras started getting more digital, their cost also dropped. For instance, if you were a wildlife enthusiast, you could take a non-professional camera like a digital camera and actually shoot decent-quality content. So you as a normal consumer would have started generating content.
So there was an increase in digitisation on one hand and growth of the Internet as a medium for high bandwidth on the other hand. We realised that there was a serious case for the convergence of these two. So if there was a product that brought digitised content over the Internet to the TV, there was business to be built.
Right now, our product is in its fourth generation. You must have seen the TV set-top boxes that make use of close-loop content providers. Now all that content is also being made available on the Internet as the content providers have moved to the Internet and all devices are now Internet-capable.
Q. What exactly is the product called?
A. It’s an Internet TV set-top box. In 2009, the Indian Semiconductor Association (ISA) judged it as the most innovative electronic product built out of India. We don’t go to the consumer directly, but rather work on an OEM model. For example, Netgear, a company that makes routers and other media products, will license the whole technology from us and probably put its own casing and sell to the consumers.
Q. What differentiates it from similar products in the market?
A. Essentially, the innovation centered around how to shrink the device so that you could keep it even in your pocket.
The US consumers—our initial market—are very picky about these things. For example, this being a TV-connected product, you need to keep it near a TV. These consumers would keep the TV on a rack that is designed such that the DVD player is fixed in one place, screen at another place and so on. They are very sensitive about where do they keep the box, where does it look good—they can’t leave it hanging somewhere. We told them not to look at this as just another box. It is so tiny that you could keep it at any part of the system. The idea was that you could keep it at a trivial part of your entertainment system—you could even Velcro it. So it’s like there is no box.
Another big differentiator is a lot of software. We have incorporated a media processor and very powerful electronics within the device but the whole integration is done through software. There are broadcast solutions, on-demand content, a slick user interface, support for a variety of formats and codecs. In the last two years, we have seen H.264 video compression standard. But when we started we had Windows Media, Real Media format, MPEG-2, MPEG-4 and H.264. So another challenge was to be able to tell the content providers that they could provide the media in any format. Integrating all these formats itself was a big challenge.
Q. What are the latest trends in this field? Can smart TVs integrate this entire product into them?
A. Technically, smart TVs can do so. But when we do that, we have to balance out the benefits in order to make successful business out of it.
The fact is that TV margins are already very thin. So if we add another component to it, we have to balance the economics of it based on how much value it gives. On one hand, the value addition might attract more buyers to the device. On the other hand, there is the risk that consumers may return the product because one component doesn’t work. This risk increases with TV complexity. So if you have bought a 35,000-rupees TV and its one component worth a few thousand rupees is not working, you will definitely return the product. In an industry that survives on such low margins, the product returns might break the company.
However, you could see this function coming in premier TVs. The cost of these TVs includes a premium for the advanced technology of the device integrated into the TV.