Bill James' blog

I spotted this interesting release that pumps up the growth of IPTV, it is overstating the progress but what is clear is that there really is progress. Take a look at what they say at www.iptv-forum.com/.

IPTV is moving rapidly towards mass-market adoption. The involvement of incumbent telecoms operators in most major markets by 2007 (France, Spain, Italy, UK, Germany, Austria and the Netherlands, for example) will provide the marketing, word-of-mouth and – for the many conservative-minded television viewers yet to switch to digital TV – the credibility that could boost the market for all IPTV providers.

Several early IPTV deployments are now reaching subscriber figures where they must be taken seriously, including Telefonica in Spain, which has over 200,000 subscribers for its Imagenio television service (launched commercially November 2004). The Spanish company is predicting one million customers by 2008. France Telecom (launched December 2003) doubled its customer count during 2005, ending the year with 200,000 subscribers for its MaLigne TV service too. The pace of deployment is accelerating: Telekom Austria launched its aonDigitalTV video-over-DSL service in Vienna in March 2006 and KPN in the Netherlands is preparing for a second quarter (2006) commercial launch. Deutsche Telekom is hoping to roll out its 100 channel broadcast TV (including HDTV) and VOD service late summer 2006 and BT has scheduled late summer/autumn for its hybrid DSL/DTT offering.

Competition is also increasing. Utility companies continue to launch television services but the main rivals to the big telcos are alternative broadband providers using Local Loop Unbundling (LLU). The second half of 2006 and 2007 will also see the expansion of incumbent telcos into territories outside their domestic markets, where necessary using LLU to compete with their peers on ‘leased’ networks. France Telecom has already announced that it will launch IPTV in Spain, the UK and Poland this year, followed by the Netherlands (not to mention Mauritius, Senegal and the Ivory Coast). Meanwhile Telecom Italia – through its subsidiary HanseNet – is adding television to its existing telephone and DSL services in Germany, starting in Hamburg. Telecom Italia also launched television services in France (via Telecom Italia France’s AliceBox triple-play service) in January. Meanwhile, Deutsche Telekom subsidiary T-Online is taking IPTV to Hungary, with a planned commercial roll-out of TV-over-DSL in Budapest and other major cities later this year. And to add further spice to this market, existing Pay TV operators from the satellite and cable world are buying into DSL. BSkyB bought UK DSL network provider Easynet in January (2006) to give itself a two-way network and exploit the “exciting opportunities that now exist to combine quality entertainment with significant high-speed connections.” Europe’s largest satellite TV provider has told investors that it intends to introduce IPTV some time after 2007. Meanwhile, UPC Austria (part of the pan-European UPC group owned by Liberty Global) has agreed to acquire the Austrian xDSL provider Inode – so establishing a national footprint, initially for high-speed data and voice. All this activity is underpinned by network upgrades across the continent, with BT in the UK now committed to delivering ADSL speeds up 8Mbps from 5,300 telephone exchanges in the UK – putting broadband in reach of 99.6 per cent of the country. France Telecom and Telefonica, among others, are using ADSL2+ and Deutsche Telekom will deploy television services exclusively on VDSL, using the 50Mbps fibre/copper network being built by its fixed network infrastructure division, T-Com. T-Com expects VDSL in 40 cities by the end of 2007, putting 11 million homes within reach of the planned IPTV service.

So with high-speed networks available and expanding their reach, multiple service launches and growing subscriber figures, the big questions are how much market share IPTV providers can take from satellite and cable, and whether they can make money – if indeed, video revenues are their real motive rather than simply reducing churn on voice/data customers. Are there digital TV newcomers who will choose IPTV ahead of digital terrestrial – and are these the customers IPTV providers want? And can companies differentiate their services sufficiently from cable and satellite to tempt existing Pay TV subscribers away from them?

I think it is fair to say Broadband-Delivered Video & IPTV will ramp up in 2007, thanks to products like Brightcove and whatever Google does with YouTube/Google Video. Also we’ll see more of Interactive TV (iTV etc). On this theme, the Venice Project (from the founders of Skype) promises free TV all around the world. Rising adoption of IPTV technology in 2007 and Bittorrent will be an important part of the online video landscape too.

The broadband internet has created tremendous opportunities for new digital media services to develop in music, video, games and gambling. At the same time pirated distribution and downloading has taken first mover advantage and many new brands have appeared. As more consumers look for interesting and exciting digital downloads so the popular consumer brands will take their place and supplement the ‘cool’ service with the ‘trust’ factor– as Shelley Taylor says “converting pirates to pilots”.

As we move more and more of our personal music collection to the hard-drive and the network we will want to control our own entertainment experience rather than feeling that everything is locked up and inaccessible. So aside from the technology development that’s moving quickly enough for most of us there’s also a demand for a simple, intuitive customer experience built around us rather than focused on the service providers product. Some of these experience issues are not new and fortunately there is a lot we can learn from how the most successful e-commerce companies have persuaded customers to buy products online through intuitive web page design, simple transaction processes, effective merchandising and attractive pricing and promotions.

The battle is on to ‘own’ the consumer relationship in the digital home. Consumer electronics and computer companies are converging on the digital living room, major computer companies like HP and Dell, and household names like Philips and Sony aren’t planning on leaving without a fight. At the same time the Telcos and Broadband Service Providers like BT, SBC, Yahoo! and AOL all expect to deliver the services that bring this digital home to life via a fat broadband pipe and a wireless network. The combined value of the consumer electronics industry and the online entertainment market runs to hundreds of billions – whether you report it in dollars, pounds or euros.

Consumers have taken to large LCD displays, high-powered multimedia PCs, and portable devices, but connecting them all is still a work in progress. But the UK now has over 6million broadband connections and the rate of adoption is accelerating fast – once homes are sufficiently wired, there is the question of where the digital living room begins and ends. With mobile phones, PDAs, and portable game players becoming more powerful, the four walls that once housed all of our movies, music, and photos are breaking down. The time we spend on entertainment now blends into the workday, helping us stay closely connected to business associates and family. The broad use of the Internet, which spawned the previous tech boom, and the increasing number of high-speed connections will inspire new generations of technology and a huge wave of digital entertainment services.

It’s a confusing world at the moment if you’re trying to keep track of what’s happening with digital entertainment with much talk about IPTV and other variations that often aren’t used clearly or defined properly for market observers. Here is an attempt to simplify it and a push to use the generic description, Broadband Delivered Video.

Broadband-delivered video can be defined as; video delivered from a remote server to a user’s computer. Its delivery requires a high speed or broadband Internet protocol (IP)-based connection, as opposed to a dial up connection.

As an early-stage technology or business model the definitions and language used can be confusing. Such services are sometimes referred to as; “Internet TV”, broadband TV”, “web video” or “online video”.

IPTV can be defined separately; as video which is delivered over a closed IP network to an IP-based set top box (STB) connected to the user’s television. This type of application leverages some of the underlying technology of broadband video, but the business model is closely related to existing multi-channel TV services.

This differs from broadband-delivered video; where the user experience is likely to be closer to (and will evolve from) today’s Internet-based consumer experience. The business models will be closer to those seen on today’s Internet, and we should ensure we adopt the lessons learned by successful e-commerce services.

This definition may evolve further depending on whether the video is actually viewed on the computer or on other devices, and other factors such as what underlying technologies might be used.