Fastweb’s IPTV Lessons Learned

Everything you think you know about IPTV is wrong. That’s part of the message from Italy’s Fastweb, one of the world leaders in IPTV deployments. During a refreshingly honest conference call Wednesday hosted by RBC Capital Markets, Fastweb’s Paolo Agostinelli talked about what early-days lessons the upstart service provider has learned while building its IPTV business, which now has somewhere in the range of 350,000 customers. The surprises include:

  • Kid vid is tops, accounting for more almost 50 percent of their VOD consumption;
  • Triple Play ain’t all that — what customers are really looking for is a focused video offering;
  • Offering 3-day replays of regular TV broadcasts is immensely popular;
  • The long tail of content (niche programming or Internet video) is still short and stubby when it comes to user acceptance.

    Having neither been to Italy nor having watched Italian TV, we’re sure we missed some of the market nuances from the presentation. But others seemed to cut right across cultural borders, since Fastweb’s self-effacing facts and figures made them as easy to understand and digest as a plate of fettucini bolognese.

    What was especially interesting about Fastweb’s presentation was how lacking it was of the gee-whiz, Jetsons air taken these days by U.S. carriers Verizon and AT&T when they talk about how their planned IPTV rollouts. According to Agostinelli, head of Media and IPTV business at Fastweb, what people really want out of IPTV is to watch that episode they missed yesterday, or to control what their kids watch, and how long they watch it.

    “The kids [VOD] thing solves the problem of wondering how much time your children are spending in front of the screen,” Agostinelli said. “This way, the parents can control what kids see at what times.” (Who could have guessed that technology could let parents be better nannies than the FCC?)

    The catch-up service — which lets viewers watch regular-broadcast programs up to three days after their airing — has already accounted for more than 1 million VOD sessions since launching this past Fall, Agostinelli said. And even though Fastweb’s VOD library has thousands of offerings from which to choose, Agostinelli said “the long tail stuff is not necessarily so successful.” And what about the idea of bringing Internet content to the big screen?

    “We’re not concerned” about being behind in that market, he said. “It’s not really something urgent [to deliver].”

    On the marketing side, Agostinelli said that Fastweb has learned the hard way that the vaunted Triple Play concept — one bill for video, voice and data — isn’t such a great marketing tool in getting people to the video service.

    “In our experience, TV has not been a strong reason to buy the overall service,” said Agostinelli, noting that to get IPTV, Fastweb customers must first purchase the company’s Internet and voice services. Giving away premium content (like soccer matches) doesn’t work either, he said, as many customers clicked off as soon as the season was over.

    “What we really need is to come to market with a one-play service that focuses on video,” Agostinelli said. In addition to revenues from typical services like VOD, gaming and premium shows, he said there are also some “very interesting experiments with direct marketing” that Fastweb wants to try.

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