TV consumers worldwide who are migrating to new hardware are the ideal targets for IPTV-based services. These consumers will see a level of convenience and personalisation in IPTV that cannot be delivered otherwise. For operators that provide a good quality of experience IPTV will bring customer loyalty - crucial at a time of increasing churn - by offering a more enjoyable and interactive user experience. Looking to the future, IPTV will be the catalyst for rolling out high-speed broadband technologies such as FTTx, which then create the possibility of offering additional bandwidth-hungry applications.
IPTV is complex, however, and is a major investment. Success, defined as an attractive, problem-free service that delivers ROI in a realistic timeframe, will only come if the project is planned and executed properly, with a networking partner experienced in deploying large IPTV networks. And still, all challenges considered, IPTV is too important an opportunity to miss.
IPTV: why now?
Upheaval is taking place in the video/TV industry. Both the creation and distribution of content are changing quickly. On the creation side, barriers to entry for alternative content producers are negligible, as broadcast-quality video production equipment has become affordable for almost anyone. Amateurs recording local community events such as sports or school graduation ceremonies, can now create summary programs from their hours of video, align separate audio and video tracks from different devices and add video effects such as fades from one camera or scene to another. As a result, the availability of good quality user-generated content is increasing fast. With additional bandwidth and lower costs, there is opportunity to offer these narrowcast programs that would not previously have been economically viable.
On the distribution side, technologies that have lasted decades are being replaced. Terrestrial broadcasters are migrating to digital only, while newer alternatives are also supplanting videotape. As new, all-digital networks introduce high-definition broadcasts, the Blu-Ray standard is incorporated into newer DVDs, and the standard HDMI connector is used on newer equipment, consumers are enjoying the image quality improvement that we last saw when colour TV appeared.
Consumption patterns are changing, too. Social networking sites such as Facebook and YouTube are becoming more important information channels. People who watch video clips on such sites do so often from handheld devices, which have specific form factor issues.
Consumers must upgrade CPE
Consumers are now being forced to upgrade to new display and delivery equipment, thanks to the analogue phase out. As they upgrade, they have no reason to stick with their current content delivery system(s) and service providers. Consumers are primarily interested in pricing, service and content availability and quality, rather than the delivery mechanism. It’s trite, but true, to say that consumers care about content not technology.
The introduction of all-digital HDTV means consumers will have to upgrade all video equipment, including the set-top boxes (STBs) that deliver the content from different sources. They also need to change subscription packages to receive an HD service. Consumers are likely to look at well-marketed alternative video delivery and consumption methods. IPTV can offer unique attractions to such consumers.
The bandwidth advantage
One critical advantage that IPTV presents, compared to other delivery mechanisms such as cable and satellite, is its ability to gracefully handle bandwidth increases. IPTV delivery is also not affected by changes in media type from xDSL to WiMAX to various forms of fibre.
Modern IPTV deployments use standard IP networking protocols on an Ethernet MAC layer. Because such networks do not require encapsulation and are essentially asynchronous, they handle bandwidth oversubscription gracefully and make it simple to upgrade overloaded links when required. Furthermore, IPTV is cost effective. The use of standard mature protocols allows the reuse of chipsets and stacks developed for other applications. This reduces the requirement to recoup development costs in the product price.
Lastly, IPTV offers the ideal way for fixed-line operators to protect future revenues from competitors unable to offer the same bandwidth. In the past, subscribers were willing to stick with their network operator because of the quality and reliability of voice service offered. Currently, these voice revenues are declining due to competition from mobile, VoIP and MSOs. Operators thus have an incentive to look for another source of revenue. As video places large demands on bandwidth, the only way to deliver a high-quality personalised experience over a large screen is via a dedicated terrestrial link. IPTV provides a way for operators to develop future business as other offerings decline in value.
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