Skip to main content

New Segmentation: a Source of IPTV Innovation


Five years ago, I recall when the incumbent Telcos in the U.S. were making plans to launch their IPTV services, and I remember being hopeful that this could be the beginning of an exciting new chapter in the pay-TV industry.

The market opportunities for innovative video entertainment offerings were unlimited -- due to the lack of meaningful differentiation among the legacy cable and satellite pay-TV service providers.

Unfortunately, the results thus far have been disappointing to me -- since most IPTV offerings merely mimic the legacy channel-centric tiered approach to video delivery, with little inventive design that utilizes the inherent capabilities of IP-based platforms.

The introduction of Google TV last week -- a vision of an open platform that adds the power of the Web to the television viewing experience -- could be the turning-point, leveraging open standards and applying free-market principles that potentially lower the prior barriers to TV App market entry.

The likely beneficiary in the short-term is Amazon and Netflix. They will both benefit from the attention that Google will attract to over-the-top (OTT) IP video offerings. Why? Most consumers don't understand the value of these low-cost alternatives -- when compared to traditional pay-TV.

Good-Enough for the Evolving Micro-Markets

I believe the demand for "good enough" over-the-top video entertainment services is yet to be fully realized, but I sense awareness will increase as a result of the upcoming Google marketing campaign.

To date, few providers segment the consumer marketplace beyond the typical approach -- incremental clusters of channel groupings. With the exception of a few channel tiers and the addition of supplemental premium movie channel options, the U.S. pay-TV value proposition hasn't advanced much. Meanwhile, monthly subscription fees have skyrocketed.

On-demand pay-per-view offerings -- of recent movie releases -- were hastily added to the linear programming mix, which has historically resulted in marginal adoption by the marketplace. The minimal uptake is likely due to the limited content choice, and the high price of VoD services.

Given the Netflix growth phenomenon, and the implications to the U.S. competitive landscape, traditional pay-TV service providers must evolve their approach to segmenting the subscriber base -- into more consumer-centric and progressively eclectic content interest groupings.

Netflix uses a powerful recommendation engine and other proven methods to help subscribers compile an "Instant Queue" of video for streaming -- essentially the custom one-channel approach to individual or household content compilation and presentation.

Embracing the Market Segmentation Challenge

The opportunity: IPTV providers should create more meaningful offerings targeted at known consumer content preferences. The Family or Latin tier-based segmentation approach was a good start, but there are other unexplored ways to segment the mainstream market.

As an example, consider the potential for on-demand "themed entertainment" offerings that fill an apparent void in the North American marketplace -- between the typical basic pay-TV tier and the next "standard channel" tiered package. Also, let's consider the potential of delivering this new packaging concept to broadband-only subscribers -- as a proactive customer retention offer.

While providers won't deter most price-sensitive subscribers from downgrading pay-TV to the basic tier, a more appealing alternative OTT themed offer may halt the eventual migration to disconnect all subscribed TV services. My point: rather than fear service cannibalization, embrace the inevitable disruption now -- while you still have a window of opportunity to innovate.

IP video streaming enables forward-looking IPTV service providers to compile previously licensed content and store it within a cloud-based content delivery system. Access to the content can be initially targeted at common customer persona preferences -- such as action & adventure, sci-fi & fantasy, or any other theme that has a sizable psychographic segment.

Also, while much of the industry analyst commentary tends to focus on new connected TV sets, let's not forget about the huge installed base of current generation sets. Connecting those legacy devices to a reliable IP video stream -- via a purpose-built low-cost STB -- is a significant near-term market opportunity.

As I look to the future, I'm reminded of the storyline in "The Matrix Reloaded" -- where the Keymaker produces keys that can open portals hidden within the Matrix. Perhaps the creative skill of independent application developers can find the keys to open the full potential of IPTV. Truly, I'm hopeful, once again.

Popular posts from this blog

Wireless Solutions Advance Work from Home Trends

Despite a challenging backdrop from the ongoing effects of the global COVID-19 pandemic, the negative impact on fifth-generation (5G) wireless supply chains has been minimal compared to the wider mobile smartphone market. This led to 5G mobile devices becoming more diverse, brought to market quickly at a variety of price points, thereby accelerating affordability and adoption. The mobile market is transitioning to 5G and many leading vendors are now exploring the low-priced 5G smartphone segment. According to the latest worldwide market study by ABI Research, 681 million 5G handsets will be shipped in 2022. Therefore, the race is on for OEMs to find that all-important level of differentiation in their flagship portfolios to help boost margins and improve market share. 5G Wireless Market Development Vendors continue to drive the adoption of new product designs, screen technology, chipsets, and camera setups -- notably within the flagship smartphone segment. Meanwhile, the leaders seek a

Software-Defined Infrastructure: The Platform of Choice

As more organizations adapt to a hybrid working model for their distributed workforce, enterprise CIOs and CTOs are tasked with delivering new productivity-enabling applications, while also seeking ways to effectively reduce IT cost, complexity, and risk. Traditional IT hardware infrastructure is evolving to more software-based solutions. The worldwide software-defined infrastructure (SDI) combined software market reached $12.17 billion during 2020 -- that's an increase of 5 percent over 2019, according to the latest market study by International Data Corporation (IDC). The market grew faster than other core IT technologies. The three technology pillars within the SDI market are: software-defined compute (53 percent of market value), software-defined storage controller (36 percent), and software-defined networking (11 percent). "Software-defined infrastructure solutions have long been popular for companies looking to eliminate cost, complexity, and risk within their data cente

Digital Identity Verification Market to Reach $16.7B

As more enterprise organizations embrace the ongoing transition to digital business transformation, CIOs and CTOs are adopting new technologies that enable the secure identification of individuals within their key stakeholder communities. A "digital identity" is a unique representation of a person. It enables individuals to prove their physical identity during transactions. Moreover, a digital identity is a set of validated digital attributes and credentials for online interactions -- similar to a person's identity within the physical world. Individuals can use a 'digital ID' to be verified through an authorized digital channel. Usually issued or regulated by a national ID scheme, a digital identity serves to identify a unique person online or offline. Digital Identity Systems Market Development Complementary to more traditional forms of identification, digital identity verification systems can enhance the authenticity, security, confidentiality, and efficiency of