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The most obvious drivers for deployment of IPTV make it clear that it is far more than the latest fad. IPTV gives users a choice. IPTV gives users control over content alternatives. And IPTV allows content producers the ability to bring truly interactive programming into a subscribers living room. Sports fans can get the statistics they want on their favorite player during a live broadcast or select which camera angle they want to watch. Drama fans can pick from more than one ending to their favorite program. Hot spotting from creative advertisers would tease program viewers to click on an item in order to view a short video clip on that item while the main program is on pause.
Another dramatic trend is the shift from voice-centric revenue to broadband IP-centric revenue among the global service providers. They all have finally seen the light at the end of the tunnel and it is rapidly nearing. With less than 25 percent of household revenue allocated to wireline voice and 45 percent (and growing) now devoted to video and broadband, there will be a fierce battle between Telco and cable industry operators to capture the largest pieces of consumer business.
Video services are a natural progression for broadband providers of any type and the cornerstone of their triple play service offering of voice, data, and video.
In their quest to pull themselves from the commodity voice business, telcos have one major hope: IPTV (Internet Protocol Television). The technology promises to transform television and, in the process, re-energize telcos by reducing churn and introducing new revenue streams. Yet, IPTV is as uncertain as it is exciting, and making it work will be most challenging.
With the potential for IPTV to increase per consumer revenue by nearly 50 percent, the market is in a rush to develop and deploy the technology through profitable business strategies, improved broadband networks, evolving access technologies, and innovative delivery devices, while focusing on achieving and sustaining a solid ROI.
IPTV is expected to grow at a fast pace in the coming years, as broadband is now available to more than 100 million households worldwide. Many of the worlds major telecommunications providers are exploring IPTV as a new revenue opportunity from their existing markets and as a defensive measure against encroachment from more conventional cable television services.
The convergence of broadband and broadcast delivery will inevitably disrupt existing telecommunications and television industries as they collide and collapse conventional boundaries. The network television revolution will change channels of distribution and fundamentally affect the way television is viewed in the future. Billions are being bet on the outcome that could radically transform the media landscape forever.
The television we know today, with a few hundred channels, will soon seem archaic. Viewers will eventually be able to choose from thousands of programs and channels from around the world, much as do with streaming audio already. The network will, in effect, become an infinitely expandable personal video recorder. Viewers will truly enjoy the interactive programming and other benefits from the convergence of Internet and TV.
IPTV is a big step forward when combined with the latest advancements in picture quality, such as high definition (HDTV) and new AVC (Advanced Video Compression) standards like as MPEG4, H.264, or WM9. Not only are set-top boxes becoming smarter, but they will also interact with other devices, such as PDAs, mobile phones, and the Internet to provide a truly flexible solution, allowing local information to be tailored to specific regions and personal preferences.
Success in the IPTV services market requires understanding of the core value chain, including how content flows from creation to consumption and making the right infrastructure decisions to support growth and competition. DRM (Digital Rights Management) is the single largest challenge. The ability to secure the content is paramount in convincing content providers to stream their most valuable content over IP networks.
The network is the essential enabler of a competitive IPTV deployment. The pay TV market in the United States is reaching saturation, so IPTV providers need to capture market share through more effective differentiation. Compelling content packaging, on demand, interactive applications, and, ultimately, integration of video and video devices into the digital home are more than the goals: They are the requirements.
What will be IPTVs biggest competitor?
Internet Television will be IPTVs biggest competitor for our attention. Internet Television enables anyone to offer a service or TV channel and empowers video producers and programmers to build broadband businesses. Internet Television also gives viewers more choices and control over their use of video and television. This approach gives the content producer and the viewer much greater control over what gets published and what gets viewed. The content publisher is able to directly reach the consumers on multiple devices independent of any specific carrier or operator. Internet Television also aims to be as device independent as possible. Thanks to open standards and formats, which have helped create this opportunity, Internet Television wants to be just as the Web is today, accessible from any computer and IP connection in the world, and not physically tied to the user living room or set-top box.
Internet Television unites the visual impact of television with the dynamic interactivity and measurability of the Internet. This grassroots approach is an outgrowth of the existing Internet users experiences. People want flexibility, convenience, and as many choices as possible. Internet Television is open to any rights holder, no matter whether it is an individual creating a video for a very small audience or a traditional publisher offering linear cable channels.
As the explosion of blogging has shown, many of us want our moment of fame through content creation. The ability to create any type of video content and post it for distribution will give us all more options than we will have time to view. The ultimate goal is for each user to have the ability to build their own custom channel.
Internet TV also is ideal for marketing and distribution; it facilitates a distributed and collaborative environment for media production. The Internet is capable of counting how often content is viewed and by whom This is an advertisers dream. But it challenges advertisers to come up with new, creative, and entertaining ads that capture the viewers attention, since Internet TV gives the user the ultimate choice on what they watch.
Internet Television is able to ride on existing infrastructure including broadband, ADSL, WiFi, cable, and satellite. In addition it doesnt tie the user to a specific service provider.
If the user wants to use the TV as the viewing device, there will be numerous ways to accomplish that, thanks to the hoard of new devices that will make it easy to connect the Internet TV channel of choice to the TV set in your living room.
The real question is what option will the user select? If nothing else, the fact that Internet Television will be an option will force IPTV to put its best foot forward and we, the users, will be the ultimate winners. IT
Pete Ianace is a co-founder and CEO of ESPRE Solutions. For more information, visit the company online at www.espresolutions.com (news - alerts).
If you are interested in purchasing reprints of this article (in either print or PDF format), please visit Reprint Management Services online at www.reprintbuyer.com or contact a representative via e-mail at [email protected] or by phone at 800-290-5460.
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