According to Pyramid Research, the drive to IP is inevitable as the demand for personalization and customization grows. Cable networks are optimized for what they do: delivering large amounts of common content to all subscribers. Yet, IP is a better medium for point-to-point delivery of personalized on-demand content as it provides more bandwidth and it lowers the cost to introduce new services.
Operators are on the right track and cable operators will eventually follow suit and migrate to IP-enabled networks. By leapfrogging to IP for video, wireline operators could enjoy the advantages of being first-to-market, but they will surely be the ones to educate the market on the technology and its challenges. Some of the considerations and challenges are as follows:
Operator video offers should match the levels of quality of service (QoS) that the customer is accustomed to with other video services. Customer expectations are higher for video services than voice and broadband. Customers will not tolerate poor quality of picture and sound, service outages and unpredictable network recovery timeouts, and such occurrences would result in increased churn and damage an operator�s brand equity.
Yet, PCCW in Hong Kong has introduced IPTV services that do not match the picture and sound quality of its competition and reporting successful results. The primary reason is that PCCW has secured many exclusive content relationships and it has been able to lock in the customer with its content line-up. In more competitive pay TV markets, where such exclusive relationships are hard to come by, operators should not run the risk of providing lower quality of service with their IPTV service.
Bandwidth prioritization needs to be established for a satisfactory customer experience. IPTV is not broadcast TV; some features might not make business sense to carry over. Content-rich services and bandwidth-intensive applications will result in increased demand for backhaul capacity. Set-top box strategy will determine the long term functionality of the IPTV service offering. IPTV network must transmit the content in a secure environment. IPTV�s increased functionality should not result in hard-to-use end-user equipment.
Operators are on the right track and cable operators will eventually follow suit and migrate to IP-enabled networks. By leapfrogging to IP for video, wireline operators could enjoy the advantages of being first-to-market, but they will surely be the ones to educate the market on the technology and its challenges. Some of the considerations and challenges are as follows:
Operator video offers should match the levels of quality of service (QoS) that the customer is accustomed to with other video services. Customer expectations are higher for video services than voice and broadband. Customers will not tolerate poor quality of picture and sound, service outages and unpredictable network recovery timeouts, and such occurrences would result in increased churn and damage an operator�s brand equity.
Yet, PCCW in Hong Kong has introduced IPTV services that do not match the picture and sound quality of its competition and reporting successful results. The primary reason is that PCCW has secured many exclusive content relationships and it has been able to lock in the customer with its content line-up. In more competitive pay TV markets, where such exclusive relationships are hard to come by, operators should not run the risk of providing lower quality of service with their IPTV service.
Bandwidth prioritization needs to be established for a satisfactory customer experience. IPTV is not broadcast TV; some features might not make business sense to carry over. Content-rich services and bandwidth-intensive applications will result in increased demand for backhaul capacity. Set-top box strategy will determine the long term functionality of the IPTV service offering. IPTV network must transmit the content in a secure environment. IPTV�s increased functionality should not result in hard-to-use end-user equipment.