In the battle for video over broadband, the odds might just be stacked against IPTV, a complex and expensive technology. Instead, the fortunes might be favoring the more simplistic, television over IP. In past few months, IPTV has gone from being an obscure acronym to a […]

In the battle for video over broadband, the odds might just be stacked against IPTV, a complex and expensive technology. Instead, the fortunes might be favoring the more simplistic, television over IP.

In past few months, IPTV has gone from being an obscure acronym to a mass media phenomenon, that if you read the papers is going to solve all of world’s problems, usher a brand new television experience, and well, while its at it, help the Yankees win another dozen World Series. The coverage would make you believe that IPTV is here and now. Reality is proving to be something else.

IPTV, is the technology that is being deployed by phone companies either over copper or fiber networks to replicate (and perhaps enhance) a television experience normally available on cable networks. (Light Reading has a more indepth description for those interested.) In other words, an always on television stream (and hundreds of channels) just is available at the flick of the switch of a set-top box. This is a business that needs billions of dollars in investment. SBC, for instance is spending over $6 billion on Project LightSpeed, that will bring TV over next generation DSL connections. BellSouth is not too far behind. Verizon has similar plans and a bigger budget, for its fiber based network, called FIOS. (Thanks Karl for clarifications!)

Even with these apparently significant investments, “the Bells are five years behind the cable companies,” says Scott Cleland, founder and CEO of research company Precursor Group. “We have a cable industry that’s fully built out,” Cleland says. “Bells are a fourth entrant with three formidable players” in video entertainment.

Regardless of the underlying pipe – copper or fiber – one this is clear: the deployment of these IPTV networks is slow, laborious process. In addition, it is hard to find evidence of profits and scale. For example, Hong Kong-based PCCW is the world’s largest IPTV service and it has 441,000 subscribers in Hong Kong. The evidence of slow nature of the rollouts is evident in pre-announcements from two companies – UT Starcom and ADC Telecommunications. UTS was hit by slow ramp at Softbank Broadband in Japan, and ADC’s troubles lie at the Verizon’s feet.

Multimedia Research Group in its most recent forecast says that the total number of IPTV subscribers will grow from 3.7 million in 2005 to 36.9 million in 2009, with revenues going from $880 million to $9.9 billion in 2005-2009 time frame. That works out to about $267 a year per subscriber or roughly $22 a month. That doesn’t sound like too much money per subscriber per month, but hey that’s me. (Interestingly, IP video services in Asia Pacific will be a $4.2 billion market by 2010 as per In-Stat, a market research firm.) Bob Larribeau, MRG Senior Analyst in the press release says that Bells are “still lagging, due to issues that SBC and BellSouth are facing, waiting for low-cost MPEG-4 set-top boxes and Microsoft’s software, and dealing with the complexity of the system integration required.”

Now compare this with Television over IP, or broadband video. Television over IP, on the other hand is the high quality streaming video, that is made available over the fast pipes, without a set-top box. This is a (comparatively) fairly low cost, and perhaps a simpler model. This simplicity is one of the reasons, it might actually gain traction in the market. While I am not willing to put a lot in the “long tail” video efforts like video blogs and efforts of start-ups such as Bright Cove, I do think there is a lot of hope for branded content online, especially if content owners can create a superior experience. I have seen some of the video-over-broadband efforts of folks like Comcast and News Corp., and that looks promising. Other content owners are also cooking up broadband channels.

Today launch of mtvU Über, a network that allows aspiring student broadband creators to create broadband content is a step in the right direction, but not the final answer. The bottom line is that, the television over broadband needs some sizzling new kind of content in order for folks to go back and click. My feeling is that MTV should have done their MTV Desi channel over broadband, and perhaps used it as a learning experience for other niche channels over broadband. If done right, television over broadband has the potential to pip IPTV to the post.

The impact of Bit Torrent, RSS, and Networked Video Recorders will be covered in the part 2 and 3 of this series, which will also look into Google TV, Yahoo’s media efforts and why really the networks should not be fearful of peer 2 peer networks.

  1. Two kinds of Internet video

    Om Malik distinguisheds IPTV and “television over IP.” The former, essentially the phone companies’ latest resurrection of video dialtone, gets most of the mainstream press, but it’s the more distributed form of IP video that will have the greatest…

  2. Quite interesting debate and new Acronym of Television over IP.

    Actually that’s the same problem as VoIP : TCP/IP Stack has created an Universal General Purpose Transmission that can link any computer to any other computer such as x86 has created a Universal General Purpose Computer.

    At the beginning of a new usage (Data Browsing, Phone, TV…) vertical, customised solution try to lock customers (Minitel, Vonage/Telcos ToIP, IPTV) but as the General Purpose improve performance, horizontal solution (Web, Skype, SIP…) gains momentum and bash Verticals.

    Intel has famously showed you can win (and big) in a commodity, perfomance-driven, general purpose market.
    The main debate today is the emergence of companies focusing on constantly, predictively, simply improving Raw Transmission Speed of Flat Fee Pervasive IP Service, particularly in Wireless.
    May only ONE deep pockets guy plays this focus well and Broadband networks could be changed forever !!!

  3. Can Om explain the difference (in technical terminology) between IPTV and video over IP as he perceives it? The post does not give a clue. Other than using different protocols (TCP vs UDP, Mulitcast features) I am not aware of differences that matter.

  4. …Om points out the slow and expensive roll out of IPTV; there’s fiber infrastructure to build out, there are high price-points for set-top boxes, and we’re all waiting for the MPEG-2 to MPEG-4 transition. All good points.

    In comparison, Om thinks television over broadband is a smarter approach. He just might be right. Let’s look at the stars aligning here…

  5. Some important issues that have not been addressed –

    What happens to IP after it reaches the home? Is it networked in the house (probably not), or is it dropped to a single location? (not good)

    If no attempt has been made within the home to network the content, then it is left up to the homeowner – which is fine for the IT capable, but a nightmare for those who are not. Most often it is left to a wireless solution which defeats the entire purpose of delivering high-quality digital programming to the side of the house.

    The point is that the telcos are not doing enough to take care of the content after it reaches the home. In the end, if the infrastructure does not exist in the home to network the streams properly it doesn’t matter what form of delivery it comes in.

  6. [...] might be favoring the more simplistic, television over IP. Technorati Tags: video   [link] Trackback URL:http://www.aboutwrite.com/wp-trackback.php?p=145 [...]

  7. With all respect, this is not principally an issue of technology. Neither is it an issue of content. It is an issue about regulation.

    The present telecom regime dictates a rigid franchising procedure that was conceptualized in the 1970’s. This franchising scheme favors incumbent cable providers, many of which have actually paid off local communities to win their franchise agreements!

    The loser here is the consumer. We are forced into monopolized agreements with cable companies that artificially inflate costs to the consumers, block out competition and often times provide crappy service.

    This is about consumer choice. IPTV providers are for it. Big Cable is against it.



  8. Verizon has already deployed IPTV in trial over their FiOS service in Keller, TX using a motorola set-top box that also uses MSTV’s new IPTV software. The trial went really well…except most channels are analog and not digital and IPTV makes most sense when we need on-demand and where digital movie content is easily available.

    BTW, the coolest feautres that many a couch potato will appreaciate is no lag between flipping channels….no blank screen, no millisecond wait..just smooth cutover from one screen to the next..easier on the eyes…;)

  9. I think broadband video will have a hard time catching on if you can’t watch it on your TV.

    BTW, a little-known fact: FIOS doesn’t use IPTV at all; it’s just QAM digital cable over fiber.

  10. It’s about time someone posted this clarification on semantics. I’ve seen more and more people blur the two definitions over the past months and have been starting to get irritated over it. The technologies, buyers, businesses, products, users, etc are most certainly different for each — at least today…. we’ll see how the world of broadcast content evolves over the next decade.


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