An analogy for Telcos to heed
March 2, 2006James Enck is overwhelmed by Telco news coming in from all quarters and comments on Telefonica’s doubling last quarter of its IPTV users, saying it “ain’t bad“.
I guess it isn’t, but IPTV has no future. It appears to be fresh and promising, but is actually dead on arrival.
IPTV is the Vonage of new video distribution….expensive, unscalable, uninnovative, and being leapfrogged by net-centric alternatives.
The same way Vonage is being wrecked by much nimbler competitors such as Skype, IPTV will get wrecked by YouTube or iTunes or some other better service.
March 6, 2006 at 2:41 pm
I couldn’t agree more. I’ve been unable to see why vast sums are being poured, by Telcos, into an IPTV model that means an expensive overbuild.
They need to consider four things;
1. The way people will use a service like this. It’ll be used as a top up to standard TV, probably as a download model rather than streamed.
2. A telco will simply not be able to secure enough rights to make anyything really compelling. Look at the number of subscribers they’ll bring - a small subset of their user base. Why would any big name content owner bother?
3. Eventually the content owners will cotton on to the fact that they can do it themselves. When they overcome their paranoia about file sharing and when the realise that the protected release windows and their traditional distribution channels of DVD, Cinema and briadcast are all declining markets.
4. Broadband access speeds are getting faster and faster negating the need for expensive QoS IPTV infrastrucure.
An over-the-top model of video/movie/tv distribution from content owner sites or large aggregators (like iTunes) all searchable through Blinx or something similar will win out. It’s simple, it’s cheap, it’s mass market.
Telcos should realise they are the bandwith pipes of the Internet and make money by doing that better and faster than anyone else and linking their pricing to usage.
March 6, 2006 at 5:45 pm
Absolutely, Mark. These points seem so obvious to me that I can’t fathom why Telcos continue wasting their capital like this.
It seems to me the *only* way they can survive as anything more than pipes is with regulatory protection or monopolistic practices.
August 11, 2006 at 4:10 am
I would agree and disagree. I agree that IPTV has no future when it’s simply used to offering a competing service. But disagree when looking at the real potential of IPTV - which isn’t simply broadcast video. It’s getting everything through your set top box - video games, personlized TV channels, any movie in HD, music that streams to your stereo etc.
I have regular cable service today and it has several hundred channels I don’t use. I’d rather have a service that gives me just a few channels that are personalized to my viewing habits. Granted, I may be biased, but I’m a typical consumer when it comes to liking more personalized services. IPTV can do that.
Ephraim
The Glowria Team