Analysis for 'Sony'
Thursday, October 18, 2007, 12:42 PM ET|Posted by Will Richmond
It's funny how often I'll be talking to someone and they will casually start interchanging the terms "IPTV" and "broadband video/online video/Internet TV".
Yet it's important to clarify that there are differences and they do matter. While some of the backend IP transport technology is common between IPTV and broadband video, the front end technology, business models and content approaches are quite different.
In presentations I do, I distinguish that, to me at least, "IPTV" refers to the video rollouts now being pursued by large telcos (AT&T, etc.) here in the U.S. and internationally. These use IPTV-enabled set-top boxes which deliver video as IP packets right to the box, where they are converted to analog video to be visible to the viewer. IPTV set tops have more capabilities and features than traditional MPEG set-tops, and telcos are trying this as a point of differentiation.
However, at a fundamental level, receiving IPTV-based video service is akin to subscribing to traditional cable TV - there are still multi-channel tiers the consumer subscribes to. And IPTV is a closed "walled garden" paradigm - video only gets onto the box if a "carriage" deal has been signed with the service provider (AT&T, etc.). IPTV can be viewed as an evolutionary, next-gen technology upgrade to existing video distribution business models.
On the other hand, broadband video/online video/Internet TV (whatever term you prefer) is more of a revolutionary approach because it is an "open" model, just like the Internet itself. In the broadband world, there's no set-top box "control point" governing what's accessible by consumers. As with the Internet, anyone can post video, define a URL and quickly have video available to anyone with a broadband connection.
The catch is that today, displaying broadband-delivered video on a TV set is not straightforward, because most TVs are not connected to a broadband network. There are many solutions trying to solve this problem such as AppleTV, Microsoft Media Extender, Xbox, Internet-enabled TVs from Sony and others, networked TiVo boxes, etc. Each has its pros and cons, and while I believe eventually watching broadband video on your TV will be easy, that day is still some time off.Many people ask, "Which approach will win?" My standard reply is there won't be a "winner take all" ending. Some people will always prefer the traditional multichannel subscription approach (IPTV or otherwise), while others will enjoy the flexibility and features broadband's model offers. However, for those in the traditional video world, it's important to recognize that over time broadband is certainly going to encroach on their successful models. Signs of change are all around us, and many content companies are now seizing on broadband as the next great medium.UPDATE: Mark Ellison, who is the SVP of Business Affaris and General Counsel at the NRTC (National Rural Telecommunications Cooperative, an organization which delivers telecom solutions to rural utilities) emailed to clarify that it's not just LARGE telcos that are pursuing IPTV, but many SMALLER ones as well. Point well taken Mark, it was an oversight to suggest that IPTV is solely the province of large telcos like AT&T.
Video Research Around the Web
- Cord-Cutting Got 75% Worse in Q1, Most Terrible Quarter Ever for Pay TV Multichannel News
- Many 4KTV Owners Don't Use Advanced Content Features Mediapost
- OTT Moves Beyond ‘Early Adopter’ Phase as 45-60 Set Becomes New Battleground Multichannel News
- Streamers Make More Shows But Cancel Sooner, Study Finds The Hollywood Reporter
- vMVPD Users Definitely Not Cord Nevers - Only 15% Previously Had No Pay TV Multichannel News
- Direct Video Ad Deals Soar Mediapost
- GroupM Predicts Streaming Will Have 'Gradual' Impact On TV Advertisers Mediapost
- YouTube is Responsible for 37% of All Mobile Internet Traffic Statista