IPTV continues to offer a mix of opportunities and challenges. As telecoms sprint to become video network operators, broadcast, media, and satellite companies everywhere are placing their bets on what’s around the corner.
In the cable sector, Comcast and other companies are building up their network capacity and CableLabs’ DOCSIS 3.0 with 160 Mbs channel bonding enables a new level of IP video services. Telecoms such as Verizon have become veterans at delivering TV services over hundreds of video, music and HD channels. Their FiOS business reached 1.5M subscribers last year.
Internet video start-ups have sprung up everywhere from Babelgum to Blinkx and beyond. Websites like Hulu are offering full-length prime-time programming and movies–for free! And the VUDU movies-on-demand download system ($295 for the box, $3 to $5 per movie) already offers 5000 movies and one of the fastest, slickest user-interfaces around.
Internet video start-ups have sprung up everywhere from Babelgum to Blinkx and beyond. Websites like Hulu are offering full-length prime-time programming and movies–for free! And the VUDU movies-on-demand download system ($295 for the box, $3 to $5 per movie) already offers 5000 movies and one of the fastest, slickest user-interfaces around.
IPTV—closed network, broadcast-quality, set-top-based—is still a wild card to many. But it’s making inroads in the Broadband and Broadcast domains from which it originated. IPTV revenues will reach $14 billion in 2012—a near twenty-fold increase over last year. And although in the past locations like France and Hong Kong have led growth, it’s the US and Canada that will now drive IPTV expansion globally according to ABI Research. In a report released this month they forecast that worldwide IPTV subscriptions will reach 90 million by the end of 2013.
There are other more conservative outlooks on global IPTV growth—55 million subscribers by 2011 according to Ovum, 65 million by 2012 according to IMS. And with over a billion television households, there’s still a lot of territory to sell into. Speed bumps include unbundling of the local loops that still impede competition that will lead to lower pricing and greater feature innovation. The absence of industry standardization of building blocks like the set-top box (STB) is also slowing down proliferation according to some analysts. In France, adding IPTV to your voice and broadband service is only an additional 10 euros, and pricing continues to be discounted in some regions like Sweden where TeliaSonera which will be able to reach 2.5 million households. But a widespread attractive price point for bundled IPTV will be needed to spur further adoption.
Other forces are pushing IPTV forward. 60% of the world audience wants to connect their television to the Internet according to Intel’s Digital Home Group. Though TV and the Web are still in a long courtship, viewers are more inclined to combine customized Internet content with their video experience. System cost cuts will help such as the shipment of more affordable MPEG-4 AVC satellite/IP STBs coming on stream (39 million units are expected in 2012) as the chips they are built from become cheaper. And innovations like Nortel’s open Video Solutions’ click-to-call and picture sharing across multiple devices will drive IPTV competitive advantage.
But how far can IPTV go as a satellite industry solution?
Satellite’s efficient, multipoint distribution and expansive capacity as HD proliferates will provide the industry an advantage according to Bill Squadron, President of SES AMERICOM’S IP PRIME. IPTV, like broadcast radio, television and cable, requires local points of distribution such as small and medium-sized Telco’s that may be scattered over the country. Satellite can carry hundreds of channels to reach each of these with equal quality and reliability.
SES AMERICOM released a complete IPTV solution last summer that provides telecommunications companies a way to deliver television along with their other services. SES’ IP-PRIME claims to mitigate the risk for Telecoms delivering a new complex, expensive television service by simplifying technical integration and program acquisition.
“By being an early mover in overcoming the difficult technical hurdles of the new MPEG-4 IPTV technology”, says Squadron, IP-PRIME has an added advantage as the first third-party solution that operates very well in people’s homes (since last July).
But as IPTV grows on all platforms, the technology, content agreement, and user adoption questions remain. It’s not even clear if it’s the incumbent broadcasters or new ventures that will pioneer the way forward. “There are basic arguments regarding future TV broadcasting regarding DTT vs. DSat vs. IPTV” says Fred Perkins Founder and CEO or UK-based Information TV. The enthusiasm for IPTV tends to come from those who are not current broadcasters says Perkins. Existing broadcasters don’t share that enthusiasm. “IPTV fans plan to become broadcasters. But do they have sustainable business models in a TV sense, or is the enthusiasm just driven from the fact that it’s easier to become an IPTV broadcaster?”
This is not your father’s satellite world. “YouTube, MP3, file sharing and a host of other technological and social changes are threatening old business models” says SES AMERICOM CEO Edward D. Horowitz. He believes satellite’s traditional media customers are losing control of their customers who are drifting away from mass packaged media. “User generated and niche media are replacing mass media” says Horowitz. IPTV is one of the key drivers in this evolution.
This is not your father’s satellite world. “YouTube, MP3, file sharing and a host of other technological and social changes are threatening old business models” says SES AMERICOM CEO Edward D. Horowitz. He believes satellite’s traditional media customers are losing control of their customers who are drifting away from mass packaged media. “User generated and niche media are replacing mass media” says Horowitz. IPTV is one of the key drivers in this evolution.
Visionary satellite pioneer Arthur C. Clarke passed away this month. He wanted his epitaph to read: “Here lies Arthur Clarke. He never grew up, but didn’t stop growing”. The satellite industry relies on its imagination to tackle HD IPTV and beyond. Early versions may falter, but the solutions that come to market in the next three years will not disappoint.Visionary satellite pioneer Arthur C. Clarke passed away this month. He wanted his epitaph to read: “Here lies Arthur Clarke. He never grew up, but didn’t stop growing”. The satellite industry relies on its imagination to tackle HD IPTV and beyond. Early versions may falter, but the solutions that come to market in the next three years will not disappoint. Visionary satellite pioneer Arthur C. Clarke passed away this month. He wanted his epitaph to read: “Here lies Arthur Clarke. He never grew up, but didn’t stop growing”. The satellite industry relies on its imagination to tackle HD IPTV and beyond. Early versions may falter, but the solutions that come to market in the next three years will not disappoint.
