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ADSL TV up and running in Hull, UK June/July 2001 By Tony Morbin

Hull has long been an anomaly in the UK telecommunications landscape, retaining local telco monopoly Kingston Communications outside of former PTT British Telecom's area of operation.

Free of the restrictions which applied to BT when it was privatised, and unattractive to cable companies who entered the fray with their own protected local franchises, Kingston in East Yorkshire was able to experiment with ADSL as a content delivery platform. This led to the introduction of one of the first ADSL content services - Kingston Vision - running a trial of 250 homes in November 1998.

Since that time Kingston has gone on to create its own full commercial interactive service on ADSL, Kingston Interactive Television (KIT), launched in September last year. By March 2001 the company was able to report that 9,405 homes out of a possible 115,000 homes (250,000 people) had taken the service, a penetration rate of just over eight per cent. The system is available from 15 Kingston exchanges, including Hull itself, west to Brough, east to Beverley, Hedon and Bilton- and more recently spilling over into the BT franchise area of Driffield. This latter step is a precursor for expansion elsewhere in the country - and to date it has achieved a 10 per cent penetration rate of the 4,000 homes there.

There are actually more requests for the service which cannot yet be delivered - reasons for non-delivery range from the usual customer vetting issues of credit rating etc to the service being restricted to 2.5 km from the exchange to ensure reliability.

Earlier trials showed that while longer distances, of say 3.5 km, were possible, the quality of service became variable. However the company says that unbundled TV would not have been a problem at 3.5 km, which is the target distance for next year, however KIT decided to err on the side of caution in its initial deployment. Andrew Fawcett, KIT Content and Service Development Manager (left) commented to advanced-television, "DSL is not a static technology and other options such as VDSL are developing." Currently the system is able to deliver content over ADSL at 6Mbps to 7Mbps, with an average of broadcast speed of 4.3 Mbps.

The system works with content played out as IP via a POTs splitter to an ADSL modem, supplied by 3Com, with the signal received by an ADSL set top box, manufactured by Pace Microtechnology. A keyboard with infra-red sensor can also be supplied to subscribing consumers.

Currently the KIT package is designed to include multichannel TV, video on demand (a new supplier contract to be signed 'shortly'), Internet access, email, home shopping and local link- a broadband portal of news and local information.

The service's EPG, using listings from PA Listings, is to be revamped this year to highlight the new offerings as the company moves to strengthen its content deals.

A £50 sign up fee is charged, plus £6 per month for the 'Basic' package of digital ITV and BBC channels, and £15 per month for the 'Popular' package of 40 plus channels. KIT has capacity for 60 TV channels, and currently delivers all the Sky channels, film four, and it is adding Wellbeing next, as well as seeking e4, with the expectation of new local BBC news channels in September this year on its local link portal. The company says that the system also provides better reception of terrestrial channels BBC 1 and 2, and ITV, Channel 4 and Channel 5. The company conducts special promotions with channels such as a current competition in conjunction with Discovery.

Local Link is a free guide to local information - news and sports; events; shopping and services, and classified advertising. Partners include the local newspaper, the Hull Daily News. Its service is currently text based, but video is to be added at a later date. It contains a localised web site including the classified advertising, with content repurposed on a section of the web for display on the TV set. Initially there had been some hostility from the newspaper, seeing KIT as a rival, but by working in partnership, each is now leveraging the expertise of the other. This service is now an active example of on-demand TV with news on demand available weekdays from Yorkshire Television. This service has already won a technical innovation award in the BT sponsored North of England Media Awards 2001. It is in this area that the BBC is to begin a broadband trial in June/July, offering specially localised news, sport, weather, travel and archive programming.

KIT operates in a quasi-autonomous manner, as a separate interactive services provider owned by Kingston Communications, but effectively provides that company's interactive service. The intention is that it should become a new type of service covering comms, entertainment, and information, possibly even made available over other platforms.

Fawcett described to advanced-television.com how the company first has to consolidate its role as a broadcaster delivering over copper wire. "We have already tested each of the components, and this year we are bringing them together to create a rounded, integrated concept. As there is a slowing of local loop unbundling, we believe we have a year to build a showcase platform.

"Virtually all (our services) are new projects. We see a bluring of VOD, broadcast, and converging of what is advertorial and editorial content. What we will eventually end up with will be quite different (from conventional TV).

"The big question is how will advertising work in this world. There are two models:
The web model uses bill-board banner adverts to drive users to TV optimised web sites, seeking revenues from placement, and a revenue share based on click-throughs.

"The content sponsorship model entails the use of advertiser-funded content, which can meld advertising and valued content such as sports and music. It can enable us to increase the quality of content without increasing the cost of acquiring it. This would not be appropriate to use for news or some other categories. However, it is already seen in a broadcasting environment where there is blurring of branding between the advertising and editorial - such as food and drink type programmes, and this will increase in the 'on-demand' world.

"Advertising is a more difficult proposition in the on-demand environment, but it is also offered the opportunity to target niche groups in a more focussed fashion. Adverts can be targeted specifically to be associated with particular services, and new advertising models need to be created to take advantage of consumer viewing data."

The KIT system has been fully Video On Demand (VOD) enabled for the last four months, and has 7,000 hours capacity of video storage on its Ncube server system - a bank of 36 servers, believed the largest of its kind in the world. "Completing the content deals has been more difficult than sorting out the technology," comments Fawcett. With Kingston having its roots as a telco, the company does not want to become a content provider per se, but sees itself more as a platform provider for third parties.

"This includes deals with content aggregators who are providing branded content, as well as direct with content owners, including studios, owners of archive material etc. We do find that the latter group need more hand-holding to provide their content for VOD deals, including the encoding and classification of material to be used for navigation (in the EPG)."

"We have our own technology - effectively providing the department store in which other branded media can sell their product, such as the Hull Daily Mail and Yorkshire Television. We will keep an arms-length relationship on branding while building our own relationship with the customer, and usually with the advertiser. We are very much a pure play platform provider which is why we work with partners."

"We've been very encouraged by the uptake in both our own area and going into a BT area. We are only setting our sights on expansion in the UK at the moment. The key is to build this system with an eye on national roll out by next April, and we're already working on it. It's just taking longer than initial expected.

"The return path is probably less than ideal (for full two way interactivity) but provision is the easy bit - it's providing sensible interactivity that is crucial. We are working on interactive concepts in a broadcast environment, with content repurposed for a video library that viewers can drill into. This enables things such as a personalised news feed."

Within home shopping, there is gambling, via KIT's relationship with Blue Square and Ladbrookes, and for music shopping KIT works with CDWOW. In addition there are a number of providers who whose games can be played on the TV screen - not at the playstation level but more interactivity than say play.jam. These are not initially against other players (over the broadband network), but players can compete with others to get the highest scores.

"There are some other concepts which we are introducing at the back end of this year. Plus there are vast untaped sources of archieval material and these will become more important as viewers become less committed to schedules.

"We expect to see genres of broadcast material arrive with the ability to drill down into for more - either in the programme or at the end - such as outtakes of that programme, trailers, factual content," says Fawcett

Some £20 million has been spent developing the system in Hull, including £14 million on the DSLAMs at the exchanges - funded from the company's floatation revenues. Around 20 per cent penetration is seen as the target for breakeven, and it is expected that some areas will be more highly developed than others. This target is seen as well within the achievability forecasts, with near 10 per cent of potential recipients taking the service within six months.

Within Hull and East Yorkshire, the service is an additional modular package to add to subscribers' current Kingston phone line whereas outside the heartland, the package includes delivery of telephony - achieving 10 per cent penetration in the 4000 homes passed in a BT franchise within six weeks.

While the plan for national roll out envisages use of BT exchanges, the logistics may mean that vaults are used next door. To date there has been no reciprocal move by BT to enter the Kingston franchise.

Advanced-television.com asked about practicalities in setting up the system. "There were some pure engineering difficulties as we scaled up - we were pushing the envelope on some of the technology, but the DSLAM to exchange ratios were known. Naturally there were one or two unexpected surprises on the way, but we already had the infrastructure to hit 30,000 subscribers.

"Word of mouth has been very good. It has not been a simple consumer decision. This is not the web on TV - itós a different user environment. The challenge has been to keep a complex range of services as simple as possible. There is also a complex navigational structure that needs to be hidden. Simplicity has been important as some users will not previously have even used a cursor on a screen as only 20 to 25 per cent have home PCs.

Unlike most ADSL offerings, this one is not led by a broadband access proposition, but nonetheless, it does have one, with a £10 pcm offer for always on unmetered Internet access at up to 256Kbps via the TV, to be extended later to include PC access.

All web site material repurposed for TV will be accessible, though much of the 'walled garden' content has required manual re purposing. Content deals are being added with new providers, currently including various ecommerce operations such as on-screen ordering of Domino's Pizza, CDs from CDWOW, car insurance quotes from Prudential, KITbag Sports and gadgetshop.com.

"A lot of content is best treated as a linear operation, with consumers given the content, ordering, and accessing in a primarily linear experience. Greater expectations of interactivity will come later, along with larger user numbers. However, consumers are already aware of their importance, and have a surprising level of sophistication when valuing themselves as TV consumers, in terms of what they want in return for providing personalised data. We do subscribe to the IMRG code of practice when dealing with subscriber data, not analysing or selling on an individual basis. But we expect the use of such data to change the way TV is delivered."

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