Content, the risk in war of the wires?


The Economist has a sort of ‘lay-of-the-land’ piece on incumbent phone companies and their IPTV strategy. It is a lot of what we all know, except packaged nicely for those who don’t follow the arcane happenings in the world of telecom. What I find amusing is how phone companies are suddenly saying, they are no longer phone companies. Just checked the most recent quarterly reports – phone business still brings in the bacon. Just saying…

> The main cultural risk, says Albert Lin of American Technology Research, a consultancy, is that telecoms firms, which have not hitherto been seated at the best tables in Hollywood restaurants, will not be able to buy rights to films and shows that anybody actually wants to watch. This suggestion infuriates the telecoms firms. The doubters “are just plain wrong,” says Michael Coe, a spokesman for SBC. “There are no barriers to acquiring content. The only question is: what will it cost?”

I used to think this way, and have been making phone calls to figure this one out. What I have learned is that many of the people who are helping SBC ink the content deals are the same folks that helped the cable guys in the early days. I am a little less concerned about this, though I still believe IPTV is being oversold and it will get traction later (much later) than sooner. The Microsoft factor is one of the main reasons for this cautious view.

> That is because IPTV forms part of a larger, and quite desperate, defensive strategy now being adopted by telecoms firms against fierce attacks on multiple fronts.

The Economist


Jesse Kopelman

It wasn’t that long ago that Comcast was saying the reason its PPV OnDemand offerings were so lame was because WalMart had muscled in on the studios and insisted that they get a grace period to sell DVDs before the content is available elsewhere. Has something changed? I would be very surprised if you see an IPTV service, outside of a special trial here and there, launch with anything you don’t get on Comcast or Time Warner. I expect them to come in with a some compelling price point, like the satellite guys, however.

Martin Geddes

Saw the same article, and thought that the Economist is misleading its readers in suggesting there’s any actual service in ‘VoIP service’. If Skype can give it away, at an acceptable call quality, the cost is likely to be rolled up into a broadband sub, just like DNS and e-mail. It’s tablestakes, and not a differentiator or revenue source.

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