14 Comments

Summary:

After many delays, Swiss phone incumbent, Swisscom finally launched a rudimentary form of their Microsoft-based IPTV system. Bluewin TV, as it is called is promises 100-plus TV channels, 70 radio channels, and a whole slew of services. Of course if you are using the service over […]

After many delays, Swiss phone incumbent, Swisscom finally launched a rudimentary form of their Microsoft-based IPTV system. Bluewin TV, as it is called is promises 100-plus TV channels, 70 radio channels, and a whole slew of services. Of course if you are using the service over ADSL, then you can watch one channel and record one program at a time. Switzerland is the latest among a growing number of countries where IPTV is taking baby steps.

If not today, then sometime soon, the IPTV will become a big business. The incumbent telecom operators worldwide are investing heavily in IPTV business. Infonetics Research, a Campbell, Calif.-based research firm forecasts that there will be 68.9 million IPTV subscribers by 2009.

Most if not all are going to be outside of the US. Despite its best efforts, the AT&T Project Lightspeed will not be available to all its customers for a few years. It will be available in 15 cities by end of 2006, below AT&T’s own forecast of between 16-to-20 cities. Nevertheless, despite the timing debate, AT&T will go forth with its plans.

Outside the US, there is no tentativeness about IPTV. Countries like India and China, which have little or poor cable infrastructure are embracing IPTV, and so are European Union members. So far, the big growth in subscribers and revenues is coming overseas, especially in Europe.

With ADSL2/2+ and VDSL catching on, expect Asia to become the hot bed of IPTV activity. This is creating an equipment boom, with sales going from $371 million in 2005 to $6.8 billion in 2009.

“IPTV is still in the ‘kick the tire’ phase, with service providers doing trials rather than mass deployments, but there’s no question that IPTV is going mainstream,” Jeff Heynen, an analyst with Infonetics Research said in a news release.

Heyen’s comment, and the hockey stick nature of the accompanying chart makes me highly suspect of all IPTV subscriber forecasts, and it might be a while before the projections are met. Sort of like what happened in case of e-commerce projections ;-)
Infonetics forecasts that the “number of IP set top boxes (STBs) sold worldwide will nearly triple between 2006 and 2007, led by China-based Yuxing InfoTech and UK-based Amino Communications.” How long before one of the two gets taken out, by say a Cisco?

  1. I think the battle between “set top box” based TV over IP (aka IPTV) and PC based TV over IP (we call it MyPCTV (use My PC to run the TV) will be quite interesting, as:

    (i) A MyPCTV approach does not require STB subsidy in most households.

    (ii) IPTV is in effect an operator’s walled garden, MyPCTV is on the other hand a way to get Video based content off the Internet in a more lean back way than using say YouTube.

    I also agree that the hockey stick is just that…competing with cable triple plays will still be a major issue, especially if the IPTV does not do much more than offer the same channels as broadcasters do.

    Share
  2. FYI, neither Britain’s Homechoice (now about 6 years old) nor Canal+ in France would regard their full-service pay TV platforms as tests. The larger issue for EU countries, I’d suggest, is the unbundling of the local telco loop to allow the companies to ramp up home bandwidth.

    Share
  3. IPTV Meets User-Generated Channels…

    Om Malik writes about the coming of IPTV (digital television over your Internet connection).  Not surprisingly, Europe and Asia are way ahead of the US in both technology and early adoption. 
    Bluewin TV, one of the early IPTV services out of Switzer…

    Share
  4. Sheesh, OM. From the linked press release:
    “Content is broadcast to conventional TV sets in the customary quality via the Bluewin set-top box which is connected to an ADSL or VDSL modem.”

    Which makes it no different from say, Verizon’s offering of FiOS TV. Why get so excited about a newly offered service which is simply same old TV onto conventional TV sets through different pipes? They claim that it’s “in line with their vision” of TV on the computer and such, but this is TV over a set-top box.

    Odd that you seemed so down on FiOS TV before but so excited over what’s basically the same service.

    Share
  5. There’s no doubt that IPTV will boom. It’s already occurring outside the U.S. and the uptake would be considered largely a success.

    The determining factors for the U.S. will be:
    1. Are consumers really anxiously waiting for alternative providers of pay-TV as Verizon and AT&T suggest
    2. Will these companies offer competitive or unique pricing packages
    3. Will the feature sets provided by telcos be enough to draw consumers from their existing satellite or cable service

    For instance, based upon Verizon FiOS customer feedback, consumers appear hungrier for the high bandwidth FiOS broadband service than FiOS TV. Makes sense considering FiOS offers a clear advantage over other broadband services.

    Share
  6. Om: I am equally suspicious of the classic hockey-stick chart that forecasts a billion-dollar market seven years out.

    I think you are right to separate the potential of IPTV between countries where there is not a lot of current infrastructure vs the U.S. market. Clearly if there is no cable-TV or if cable is not widely deployed, IPTV can appeal to customers. Not so hard to compete against non-consumption.

    But in North America or other markets where a multi-channel distribution infrastructure is well established, the telco deployments of ipTV I have seen appear to be me-too services. They could actually be better than cable in some measure, but the track record of successful innovators shows that trying to beat incumbent suppliers at their own game doesn’t drive a lot of business to new entrants.

    Instead, would-be IPTV companies competing against dominant cable or satellite systems (in the U.K) need to take a disruptive approach. Aiming for the mainstream market with better TV, or more channels, is a recipe for spending billions and going nowhere.

    A disruptive approach is counterintuitive, difficult and not about technology. Some of the most successful companies today show that a disruptive strategy pays off by focussing on:
    *Inferior initial product or service (Metro International newspapers)
    *Marginal initial market (BlackBerry)
    *Customization (Starbucks)
    *Simplicity (iPod)
    *Focus on an aspect of the service that is perceived as inferior (Dell’s direct sales)

    JumpTV (home-country TV for new immigrants) may be an example of a disruptive IPTV service, although it would seem they are losing money by spending well in advance of customer demand.

    More ideas on disruption and TV at:
    http://www.ondisruption.com/myweblog/2006/08/disruptiontv_j.html

    Share
  7. Will this get rid of the TV regulators? Perhaps this will kill off the FCC, CRTC, etc.
    Or, perhaps the will regulate the internet instead.

    Share
  8. Why shoulda I care about wether my TV comes over IP or TCP or UDP?

    I mean right now I have service from comcast and I get both TV and internet from the same service provider and I can work on my laptop while watching TV …

    Share
  9. damaka Hybrid IPTV + VoIP In One Interface

    OM, I completely agree with you. IPTV will become a big business sooner than later.

    I have been using P2P SIP-based VoIP application “damaka” for a few months now and they have recently released their version of IPTV.

    This bundling of IPTV with VoIP can very interesting, especially for Telcos and Cable companies that are looking to offer Triple/Quad play.

    Check out their website: Damaka.com

    and the other 2 links I found:

    1) TVNinja
    http://www.tvninja.com/damaka-hybrid-iptv-voip-in-one-interface.php

    2) Collaboration Loop
    http://www.collaborationloop.com/blogs/online-entertainment-2.htm

    Its a step in the right direction. All they need to do is tie up with content providers and there is another business model for VoIP players than just Phone/Video minutes.

    SWoods…

    Share

Comments have been disabled for this post