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Summary:

The IPTV bet, in words of Fortune writer Stephanie Mehta is a “pipe dream” for the phone companies. She points to a survey by Accenture that says that only “4% of telecom, broadcasting and media executives think IPTV will generate significant revenue in the coming year.” […]

The IPTV bet, in words of Fortune writer Stephanie Mehta is a “pipe dream” for the phone companies. She points to a survey by Accenture that says that only “4% of telecom, broadcasting and media executives think IPTV will generate significant revenue in the coming year.” That is a chilling statistic.

And it also explains the old-fashioned triple play packages the phone companies have started to push. AT&T for example is pushing a bundle of satellite TV, DSL and phone service it calls HomeZone for between $80 and $140 a month. (Good package actually if you can get the satellite dish up on your roof! Of course it is available only in San Antonio and Ohio, though more cities are two follow.)

It doesn’t have the latest or the greatest, but AT&T says more content will come from its partners like Yahoo soon. (Point to note – the new offering doesn’t have Akimbo packaged into its version of their service as yet. Akimbo functionality rolls out on Homezone in the fall software update. Akimbo, you might remember just got funding from AT&T)

BellSouth, which is in the process of being acquired by AT&T, is now offering a $99 a month voice, DSL and Direct TV package. Or you can swap the satellite TV service for Cingular Wireless. These two packages are part of a new reality for the phone companies which are losing customers to the cable providers quite rapidly. Despite the IPTV lip-service, they need to shore up the losses as quickly as possible.

Here is another reality check, also from Fortune article:

A separate Accenture survey of 6,000 consumers worldwide asked respondents if they knew what “IPTV” was. Some 4% said they thought IPTV was a reality television show.

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  1. This is off the topic. But, Om, what is your take on fixed mobile convergence startups? anyone you think that they have got the game right? Thanks!

  2. Convergence.In Wednesday, July 19, 2006

    And in our part of the world Airtel & BSNL are trying to roll out IPTV on a Copper to Home network-LOL. When asked about the QoS, the response was they have extremely superior compression technology ;-)

  3. Providing TV is a market block, anyway. The cable companies aren’t making money off of providing television. Why do you think they covet the phone market so much? The smart phone companies are better off partnering with satellite for the bundling, and stopping or slowing line loss, than they are trying to find “best uses” for the network. The best use is providing telephone (low cost, high revenue)! Until formatting, channels and digital distribution changes completely, TV is a break-even proposition.

  4. As a consumer, I’m tired of hearing that IPTV is a losing bet. Here we have big companies pushing the envelope to create infrastructures that will ultimately give us a whole new world of media options. Of course IPTV isn’t going to make money instantly, but innovation rarely does. And someone’s got to try this stuff out so that eventually a money-making solution is found. More to the point, we as the consumers are benefiting from the trial and error process.

    Side note- who cares how many people know what IPTV means? Normal people don’t go around talking about SDTV, but that’s probably what they have in their living rooms.

  5. Jesse Kopelman Thursday, July 20, 2006

    Cablecos don’t make money providing TV — yeah right. They covet phone because they want to grow revenues. This is the same reason the phonecos want to offer TV. It’s not that one or the other doesn’t make money it’s that they want new ways to make money.

  6. Francesco Cardi Thursday, July 20, 2006

    In countries where cable TV penetration is very low (Italy, Spain, for example), IPTV has a very good chance of success. And I´m positive also for other European countries. Strange how Americans continue to think that what is happening in US will be identically repeated elsewhere in the world. Is the mobile industry an already forgot example?

  7. Jesse Kopelman Friday, July 21, 2006

    There’s a rest of the world?

  8. David H. Deans Sunday, July 23, 2006

    Om, I have written a series of columns on this very topic at my blog that may be of interest to your readers. Fortune, Forbes and the Business Week columns don’t offer suggestions how to make the IPTV consumer experience more appealing — and I do.

    Digital Lifescapes
    htpp:/dhdeans.blogspot.com

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