Technology | Media | Telecommunications

Friday, May 16, 2008

Why IPTV Requires Unique Service Offerings

In the past five years, IPTV has grown from a handful of deployments by a few pioneering telcos and ISPs to an established part of the pay-TV landscape with services spanning the globe from Australia to the Ukraine.

But now, according to ABI Research, this adolescent industry must find ways to create a distinct identity so it can continue to grow and prosper, with IPTV operators creating unique service offerings that are differentiated from the traditional video services of their key competitors.

Some services have recently crossed the symbolically important 1-million-subscriber threshold. But, says senior analyst Cesar Bachelet, "IPTV operators must now leverage the characteristics of the new platform to produce a differentiated offering, redefining the experience of television."

How are they to do this? Bachelet offers several suggestions.

Operators should focus on integration of Web content (text or video) with traditional broadcast content. New technologies offer the ability to pull real-time feeds from the Web and combine them with broadcast video content.

Offering subscribers the ability to access the EPG (electronic program guide) and DVR functionality through any Internet-connected device -- as an example, a PC, mobile handset, or portable device.

Targeted advertising is another opportunity. IPTV's interactivity and personalization should enable much more effective ad strategies than conventional broadcast.

"From a technology perspective," Bachelet concludes, "all the tools are there, enabling IPTV operators to move to the next level and bring greater choice, convenience, and control to consumers. However, operators must tread carefully in order not to overwhelm subscribers with too many new features at once, and business models still need to be defined for some of the new value-added services in order to monetize them without alienating subscribers."

That said, I believe that the window of opportunity is closing fast. While the telcos have been busy replicating a pay-TV experience from the bygone era of broadcast media, online digital media narrowcasters have fragmented the addressable marketplace.

I also believe that the online video entertainment business should be appoached with an open creative mind. Meaning, prior experience in the traditional broadcast television industry is likely more of a negative than a positive. Moreover, monetization concerns aside, there needs to be a focus on designing meaningful and innovative service offerings.