Story by GEOFF LONG
Gone are the days when your telephone company simply offered phone calls.
Sure, they still do that, but telecom providers are also going well beyond
voice calls with the offering of various broadband and multimedia services.
And now they want to be your preferred supplier for video and television
as well, using broadband and Internet Protocol (IP) to deliver it - hence
the name IPTV.
On the surface, it would seem a safe bet: the phone companies already have
broadband infrastructure in place and consumers are increasingly spending
more of their time on the Net at the expense of television. Put them together
and you might be excused for thinking you're on a winner.
The problem is that IPTV is still incredibly expensive to roll-out, with
a lot of new video distribution required by the carrier as well as things
such as set-top boxes for consumers - not insignificant when it goes to
a mass roll-out of hundreds of thousands of subcribers. And the traditional
broadcasters, notably satellite operators and cable TV providers, aren't
sitting still either - they're responding by offering voice and data services
on top of their own video offerings.
To top it all off, there's a new breed of Internet TV player that is purely
Internet based and doesn't need to create its own infrastructure - in the
same way that VoIP services like Skype don't actually build their own
network. Companies like Joost and Bablegum are just starting to appear
and there are real concerns that they could undercut IPTV before it really
gets started.
As a result, many in the industry would agree that IPTV so far hasn't
lived up to its promise, particularly in the Asia Pacific region, where
countries such as Japan and South Korea, with their high broadband penetration,
were expected to lead the way. One of the exceptions is Hong Kong's PCCW.
Its "Now" IPTV service has been taken up by around 850,000 subscribers
and it recently landed the exclusive rights to broadcast English Premier
League football matches.
PCCW chief technology officer Paul Berriman recently told an audience at
the IPTV World Forum Asia in Singapore that its service was proof that
telcos are well-placed to make the transformation to media companies.
"After years of having people eat our lunch, it's our turn to go and
eat someone else's lunch," he said.
The Now service, launched in Hong Kong four years ago, is part of a quad
play from PCCW that includes fixed line, broadband, mobile and IPTV.
Berriman said that the various service offerings had helped reduce churn,
with its fixed line market share now stabilised and new content offerings
helping to turnaround what was a flattening broadband market.
He said that the Now service reaches over 35 percent of homes in Hong
Kong. PCCW's approach proved that broadband is more than just Internet
access and he said that having exclusive deals as part of the content
mix was a "must have".
As well as the Premier League rights, Now also has an exclusive deal
with movie channel HBO. "It's almost like by having key content we're
restoring our monopoly," he said, referring to the company's past as
the incumbent operator. "And it shows content providers like this
model," he added.
The company has also started creating its own channels and Berriman
said that gave it more freedom to generate more advertising and
sponsorship revenues. Another area of growth is in transactional
services such as stock trading and online ticket sales.
Also speaking at the IPTV World Forum Asia was Paul Sanchirico,
senior director of the Cisco Video/IPTV Systems Test & Architecture
(C-VISTA) group, who pointed to the changing nature of audiences
in the "video 2.0" era. "People are looking to express themselves
and share content. It's viral and organic," he noted.
His message was backed up by Sal Arora, general manager of Microsoft
TV India, who said that IPTV is here today but the industry needed
to take the next step and grow the market. He noted that audiences
were a moving target, one that it is hard to pin a business model on.
According to Arora, consumer viewing habits are changing and things
such as personalisation and social media are now important, while
more people were "snacking" on short video clips. "The amount of
traffic YouTube is generating is staggering. People don't think
about it but YouTube is very social and connected," he pointed out.
Microsoft provides the so-called "middleware" for delivering the
services to users and has recently scored major deals for its
platform in India and before that in Singapore with SingTel's
recently launched "Mio" IPTV service. Low Ka Hoe, director of
Mio TV and content, Singtel consumer group, told the IPTV World
Forum Asia that Mio was already looking at adding such social
networking functions as "phase two" of its IPTV rollout, although
he said the most important thing was to prove the reliability
of the service.
"This is pay TV and not Internet TV over the public Internet,
so we focussed on getting the basics right. But in phase two
we will roll out more features to take advantage of the IPTV
platform we're on," Ka Hoe said.
Some of the new features are likely to include video conferencing
and messaging, integration with gaming platforms such as the Xbox
and the ability to view personal media such as pictures and video
over the IPTV box. Mio will also look at adding relevant information
services as well as more targeted advertisements.
Ka Hoe also revealed that soon customers will be able to program
their IPTV service from outside the home, either via mobile phone
or the Net. "We have quite a lot of work ahead but the basic
premise remains - consumers have lots of choice but need help to
manage it."
Mio TV launched in July and had some 10,000 customers by August,
which Ka Hoe said was consistent with Singtel's targets. "We are
very happy with our numbers. Obviously it's not going to be
profitable in the first year but we had a 10-year plan and we're
very happy in terms of our targets," he said, adding that
"launching pay TV is not about putting everything out on day one."
He also spoke about the opportunity for IPTV operators to partner
with content owners, pointing to Mio's collaboration with the likes
of Sony Pictures, Chinese-language content producer Dragon TV and
BBC Worldwide, which created two documentary channels on Mio TV.
Collaboration between content producers and IPTV operators was
also a theme picked up on by Yew Ming Lau, VP of business development
for Turner Broadcasting Asia Pacific. "I was very encouraged
by the Mio TV presentation. It's good to see we're having a
meeting of minds," he told the IPTV World Forum Asia.
Lau said that the challenge for original content producers will
be how to attract consumers for its traditional content but also
for the "long tail" of niche content - something that Turner is
developing now through a number of Internet TV experiments.
"Consumer behaviour is moving more towards the tail. As a
company we need to be both at the head and the tail, but the
problem is how you do it cost effectively," he noted.
He said IPTV operators had more potential to reach niche
audiences than cable or satellite operators, as they could
create mini-channels or on-demand content rather than 24-hour
programming.
In the meantime, whether IPTV has enough to attract consumers
away from traditional broadcasters and new Internet-only TV
services is something that will play out over the next few years.
