thinking about IPTV

May 8, 2009 at 8:18 am Leave a comment

So many obstacles
(so many obstacles)
Gettin in the way
(gettin in the way)
What if we step past this transition
there is so much we’ll be missing in our lives
such as you and I
so should we swallow this frustration and hope that this temptation will subside
or should we just try

Recently a colleague of mine posted some comments on IPTV to an internal team. I thought that this was an interesting compilation of issues that still dog IPTV implementations. Whilst I do not fully agree with all of them, they are worth considering as you consider the development of your IPTV business model.

“A Video headend costs atleast 1M Euros, maybe 2M.  If you are going to serve 1000 or 10000 customers, you are never going to get your money back.  Typical critical mass for most of the business plans  I’ve seen is atleast 50000, otherwise you are talking about a shared infrastructure that does not yet exist”
– Benjamin Schwarz, Farncombe Technology

“Managing to deliver something of quality is critical.  The companies that launched back in 2003 are still struggling to deliver service availability that is equivalent to satellite or cable TV.”

“One of the huge issues that has come up for IPTV companies that have been around a while is managing the Set-top boxes.  Its all very well to patch, refresh one model but when you have been running a service for a while, you tend to have multiple set-top boxes from multiple vendors, multiple chip-sets and that gets very complicated…because contrary to satellite, where the usage life of a STB is about 7-12years, IPTV STBs rotate in three years…resulting in a very heterogeneous enviroment.  They still represent 60% of the CAPEX.

“One of the typical technical challenges is that media companies know about media, they have technicians that know about video, filimg , how to produce a trailer.  Telcos haven’t a clue how to set about that, so if you are going to set up a VOD service and build your own catalog, its a very upward struggle, complex issues to solve to actually ingest all that content, get the quality right, as I said  get the trailers done, you usually need to produce your own trailers done, because out-sourced trailers look different …so getting the pure technical issues of managing video, the telcos are good at managing communications and IP network, they are not yet good at managing video.”

“By 2013, 60% of TV households in Asia will have pay TV solution and half of those will be served by IPTV.”
– Phil Lawrie, Director Global Distribution, Al Jazeera Networks

“The fixed line business has been declining and the broadband business has been increasing,…and by having a triple play offer, we have been able have this very strong proposition that attracts customers.  The TV element is becoming a must have and addding TV to broadband keeps customers loyal”
– Paula Souloumiac, Director of International TV – Content Division, France Telecom

Regardless of the business obstacles, delivering video over IP is the future. Broadcasting may be an efficient distribution model, but it is increasingly become an inefficient business model. In the world in which we live, consumer money speaks. And, consumers are willing to pay to get what they want.

Tell me it isn’t so… I’m listening.

Entry filed under: Media. Tags: , , , , , .

wither thy ad agency where does cable go from here?

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