Why Middleware Never Happened

In the annals of arrogance — or just corporate sloppiness — the incongruous boilerplate jumped out from the bottom of an OpenTV Corp. announcement last month. The standardized wording proclaimed that OpenTV remains "one of the world's leading interactive-TV companies."

Meanwhile, at the top of that page sat a headline acknowledging that NASDAQ intended to delist the OPTV stock.

Call me old fashioned, but I still think "leader" implies financial security, as well as forefront technology and business stability.

Admittedly, OpenTV subsequently received a reprieve from the NASDAQ. And the dispatch of its middleware through 27 million set-tops (mostly outside the U.S.) gives OpenTV a vague claim to leadership.

But lead position in a declining sector could merely mean "first into the tomb." The middleware prognosis today is certainly grave.

Liberate Technologies Inc., another self-proclaimed leader, will probably engage in another round of layoffs as early as next week, and that's not mentioning its own delisting dilemma and an SEC probe into its accounting practices.

Most assume that new Liberate chairman and CEO David Lockwood intends to wrap up the company's intellectual property position. He has brought to Liberate key members of his old firm, InterTrust Technologies, a group skilled at mining software value.

Liberate has lots of cash on hand right now, but a variety of pending settlements could eat into that quickly. Some scenarios see Liberate becoming an in-house development unit for Comcast, its primary U.S. customer. Cox Communications would probably ride along with the technology — assuring a continuing, but much reduced and very specific role for the once-vaunted middleware.

OCAP impact

Middleware for cable services bubbled up as an über-API (application program interface) at just the wrong time.

OCAP (Open Cable Applications Platform) arrived too quickly after OpenTV, Liberate and Microsoft Corp. (and, in a slightly different vein, WorldGate Communications Inc. and Wink Communications Inc.) began the middleware wars.

As soon as Cable Television Laboratories Inc. and its MSO members focused on OCAP, the commercial appeal of other middleware disappeared.

Implementing OCAP will still require complex collaboration among consumer-electronics manufacturers and cable operators. But if it succeeds, there will be no need whatsoever for middleware as we knew it. Moreover, if and when the industries move toward embedded DOCSIS, a preferred platform for advanced services — including tiered interactive services — will be in place. That leaves middleware in the middle of nowhere.

In retrospect, the lofty middleware pronouncements of recent years did add up to part
of a solution. But it was never enough to create a solid business proposition.

The visions of the middleware vendors — as exemplified by all their vast "partners" programs — centered on recruiting commerce and entertainment providers who had no telecom presence. Middleware companies would give them tools to develop interactive services.

Partial solutions

Each of the middleware opportunists was good at one piece of the process, but none locked it up completely.

Microsoft TV and Liberate had attractive front ends. For OpenTV, it was strong tools and a solid development process.

Canal Plus U.S. Technologies had a reasonable business model, but its late arrival to the sector meant it never could achieve traction. Indeed, amidst the implosion of parent Vivendi Universal S.A., Canal Plus was limited to a short season of scurrying to find any place at all. It sought to buy into key gatekeeper points and once even toyed with the idea of buying Lockwood's InterTrust.

Meanwhile, a new batch of middleware initiatives seems intent on riding along with OCAP. Supporters of the broadcast-centric Digital TV Application Software Environment (DASE) contend that 98 percent of their format is the same as OCAP.

The Advanced Television Systems Committee (ATSC) is now negotiating with CableLabs to develop full compliance — something they've already dubbed "DCAP," as in Digital Cable Applications Platform.

ATSC leaders acknowledge that interactive TV will never be successful without a "ubiquitous platform," and they think DCAP could be the solution.

Looking back on the great middleware descent raises the question of whether it was all too little or just too late. The middleware flop further tarnished the entire interactive TV category.

As one veteran of the middleware wars confides, the cognoscenti knew that the "rule of commoditization" would apply to this embedded layer of software. The new wave of software companies now pursuing cable interactivity eschew the middleware business altogether, recognizing that it offers no profitable margins.

That's something the so-called "leaders" might also recognize by now — if they're still alive.

Contributing curmudgeon Gary Arlen mans Broadband Week's I-Way Patrol.

Gary Arlen

Contributor Gary Arlen is known for his insights into the convergence of media, telecom, content and technology. Gary was founder/editor/publisher of Interactivity Report, TeleServices Report and other influential newsletters; he was the longtime “curmudgeon” columnist for Multichannel News as well as a regular contributor to AdMap, Washington Technology and Telecommunications Reports. He writes regularly about trends and media/marketing for the Consumer Technology Association's i3 magazine plus several blogs. Gary has taught media-focused courses on the adjunct faculties at George Mason University and American University and has guest-lectured at MIT, Harvard, UCLA, University of Southern California and Northwestern University and at countless media, marketing and technology industry events. As President of Arlen Communications LLC, he has provided analyses about the development of applications and services for entertainment, marketing and e-commerce.