IPTV broadens its horizons

Jonathan Doran, principal analyst, Ovum.

AUSTRALIA: Telcos are finally recognizing that they have other things to offer besides IPTV, which for most hasn’t turned out to be the holy grail they’d hoped for.

IPTV has failed to transform the multi-channel TV landscape
After years of being fixated with carving out a position in the pay-TV market, many telcos (as well as their software and hardware vendors) are assigning less priority to closed-network video delivery. Instead, they are increasingly redirecting attention to other areas of their portfolios such as broadband (access and VASs), in-home media sharing, and multi-device content delivery.

With very few of this year’s conference streams dedicated to IPTV, telco speakers at the event addressed a broader range of topics that included multi-screen delivery, connected home, Internet traffic management, and CDN opportunities. The same was true for the big equipment vendors as well as smaller enabling technology specialists.

IPTV middleware providers, previously a staple of this event, were conspicuous by their absence, reflecting partly their consolidation (primarily via acquisitions by larger vendors) and, more importantly, the lower priority of middleware on the telco service development agenda.

Here are some predictions for IPTV revenues for Asia-Pacific (USD millions):
2011 2012 2013 2014 2015
$2,946 $3,886 $4,934 $6,101 $7,348

With platform barriers evaporating, now it’s just “TV”
With cable, satellite, and now digital terrestrial increasingly incorporating IP elements, closed-network IPTV is becoming in most cases a “me too” service that doesn’t differentiate significantly from other digital TV platforms. While cable was relegated to a minor stream in previous IPTV World Forum shows, with little contribution or interest from MSOs, it took a far more prominent position at this year’s event, with a full day’s presentations dedicated to IP over cable as well as keynotes from Cox Communications and Virgin Media.

Satellite operators were also present, with BSkyB and DirecTV sharing insights on multi-device delivery over broadband.

OTT video isn’t perceived as an alternative, but rather a complementary enhancement to the user experience (and hence the value proposition) of traditional TV offerings. The battleground of broadband or pay-TV versus OTT has faded, giving way to a more collaborative environment where the various parties focus on their core competencies, working with other (sometimes competing) entities to build a relevant TV proposition.

This change in the competitive climate was evidenced by the presence of Hulu,
Netflix, and Google TV executives as keynote speakers, delivering instructive talks on (among other things) ad-supported business model approaches, content discovery, and multi-device service integration. There’s also a growing recognition among OTT players of the need to move more closely towards the traditional pay-TV model to achieve the requisite levels of content security and service quality that will earn the trust of content owners and the loyalty of consumers.

Multi-screen is a common aspiration for most players in TV and video
Multi-screen delivery has become an over-arching strategic objective shared by the majority of stakeholders in a rapidly converging broadband TV marketplace. As well as occupying its own dedicated conference stream, multi-screen video featured heavily as a topic in presentations and panel sessions elsewhere at the event as well as permeating marketing messages and discussions throughout the exhibition.

Several of the major telco infrastructure vendors, including Alcatel-Lucent, Cisco, Ericsson, and NSN, were advocating turnkey multi-screen solutions to facilitate cost-effective cross-platform delivery of their customers’ content services. One spoke of the need for content management systems that can aggregate and integrate assets from multiple sources, as well as a common client architecture that cascades the user experience across multiple devices.

Another stressed the need to break away from vertical solutions and move towards a consolidated matrix of devices and networks, offering a single service that uses the same permissions across all delivery platforms and devices. The vendors’ product realignment and messaging reflect a broad and growing consensus that’s also shared by content service providers on the importance of unifying multi-screen service delivery, both at the back-end and at the presentation level.