Home EuropeEurope 2006 The new world of IPTV – rethinking the media and the industry

The new world of IPTV – rethinking the media and the industry

by david.nunes
Roger LynchIssue:Europe 2006
Article no.:8
Topic:The new world of IPTV – rethinking the media and the industry
Author:Roger Lynch
Title:Chairman and CEO
Organisation:Video Networks
PDF size:76KB

About author

Roger Lynch is the Chairman and CEO of Video Networks. Previously, Mr Lynch was President and CEO of Chello Broadband, at the time Europe’s largest broadband ISP. During this time, Chello won numerous awards for its innovative service, including Best Consumer ISP in Europe by the ISP Forum. Prior to this, Roger Lynch was an investment banker with Morgan Stanley in London, Silicon Valley and New York where he specialised in Internet, technology and media corporate finance. In this role, he orchestrated IPOs, financings and mergers for more than 35 leading companies. Earlier in his career, Mr Lynch had roles managing manufacturing operations and in physics/engineering. Roger Lynch has an MBA from Dartmouth College, and a BSc in Physics from the University of Southern California.

Article abstract

IPTV is hot. It offers such a wide range of benefits to operators and service providers: low cost, flexibility, converged voice, data and video and a wide range of digitally enabled services, that its universal adoption seems to be just a matter of time. In addition, the shift to IP brings more than just converging technologies. Companies are also converging in an effort to position themselves with the technology, access and content to meet the looming competitive threats.

Full Article

Open any broadcast publication, technology magazine, industry report or even national newspaper and you are likely to find an article on IP and more specifically IPTV. Just in our own market place in the UK, IPTV is the hot topic and we are seeing huge interest from all parties in these products and services. It is not just nimble young companies that are talking this topic up, but large telcos. A prime example of this is British Telecom, which has committed to a full IP network and a multi-billion pound upgrade of the nation’s telephone exchanges. They plan to launch an IPTV service later in 2006. Similarly, UK digital satellite pioneer BSkyB has recently purchased EasyNet, one of the UK’s largest business ISPs, giving them a foothold in the IP world. Although we do not expect a complete shift away from satellite delivery, the company has announced plans for the development of new IP-based television services. Other ISPs are increasingly talking about interest in launching IPTV services. The clear takeaway from all this is that the copper wire that enters pretty much every home in the country can do, and should do, so much more. If you look behind the hype and media talk, is it really the killer application it is talked up to be? Will IPTV really revolutionise the way people consume their media, or is it purely another way to get television into peoples homes? Leader in IPTV The UK is one of the leaders in IPTV, and although it has a small penetration amongst the digital TV homes in the country, it is growing in strength and was the fastest growing digital medium in the latest regulatory report on the UK market. Yes, it is starting from a small base but not too long ago all you could get in the UK were four analogue channels and now people receive TV via their phone line. The television world has changed and changed quickly. The advantages of IPTV are: its relatively low cost of deployment when compared to cable or satellite. There is no need to launch satellites or dig up roads, telcos can use their existing access networks; its capability to deliver high levels of on-demand content, and its ability to deliver voice, video and data across one network. This is what makes it so attractive to the market and why IPTV should grow significantly over the next decade. Broadband is a competitive market and prices and margins are falling. Service providers need to find new ways to differentiate their offerings and to find new revenue streams to offset the marginal decline in telephony. Using broadband connections to deliver new, high margin and highly differentiated services is what makes our industry exciting! IPTV set-top boxes connect via IP to the operator’s servers storing many thousands of hours of TV, movie and music content that subscribers can access whenever they want, and it’s streamed, not downloaded, so when you press play…it plays! IPTV allows operators to be dynamic, offering a service like no other with on-demand TV integrated with broadcast television. Gone are the days when TV viewers are constrained by the TV schedules, or the size of their PVR hard drive, or by having to remember to record things in advance. With IPTV, the limits are virtually endless. Protection Programmes can be PIN Code protected, kid’s programmes can be ring-fenced from other content giving parents piece of mind and personalised music-video play lists can be built. Slowly, the boundaries between television, computer, gaming console, photo album etc. are blurring. Although consumers do not think in terms of IP, or how their content is delivered, we know they like their TV service. We know exactly, in fact, how, when and where they like their TV because IPTV allows us to track everything. This is how we know that many of our on-demand channels have viewing shares that rival the most popular broadcast channels in their genre. Service expansion It is true that IPTV will push the boundaries of what consumers can do with their traditional TV sets. Services will expand, new entrants will come into the market and competition will heat up. IP allows television delivery in a new and exciting way and puts the power in the hands of the customer, but as we all know in the business world, the customer is a fickle character and votes with its feet. This is the challenge facing any new technology. The technology is only as good as what it delivers, and in the TV world the age-old adage ‘Content is King’, still rings true. It matters not to Joe Public that this exciting technology allows them to do this or that with their remote controls, if the content is not there then the service falls flat. IPTV will be a success, and increasingly be part of the digital television mix; however, new operators and even established ones need to have relationships with the television industry’s content providers – the studios, the music labels and various media groups – to really make it work. Our experience is that the technology can do so much, but consumers still demand traditional services and, in IPTV’s case, that is the latest blockbuster or the popular soap opera. Deliver what people want IPTV simply allows operators to deliver more of what people want. We firmly believe, though, that they want the same thing as they did before. They just want more choice and flexibility and only IPTV can deliver this. Once people enjoy the rich experience that IPTV offers, they love it, but to them it is still the films, the shows and the music that make it so. So where does all this leave the market and the industry? IPTV will bring telcos, ISPs and media companies together – we are already seeing this. There is much talk of convergence on a technical level, but do not be surprised if that extends to organisations as well! Customers lead increasingly hectic lives and are turning to one provider for all their home entertainment and communications needs, from the phone to the television. IP brings all these together in a way that no other platform can: seamlessly, and cost-effectively. This bodes well for service and content providers who embrace this new technology. Of course, it also bodes well for the viewers!

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