V I D E O • A G E Se p t e m b e r/ Oc t o b e r 2 0 0 9 26 BY LEVI SHAPIRO Bill Geibler has a few simple rules. The 38-year-old father of two in Annapolis, Maryland learned his three rules to live by from Coach Bobby Finstock in the 1985 MGM/UA film Teen Wolf . “Never get less than 12 hours sleep; never play cards with a guy who has the same first name as a city; and never get involved with a woman with a tattoo of a dagger on her body. Now you stick to that, and everything else is cream cheese.” Bill has added a fourth rule to that list: “watch every football game on Sundays.” In order to see more games and have live chat, VoIP and other interactive features for his fantasy sports leagues, he switched to a hybrid IPTV/satellite package from AT&T Uverse, the IPTV service from the telco, and DirecTV, the satellite TV platform. “God bless these internet wires,” said Bill. The true benefit of IPTV (or television via broadband) is two-way data flow. The system learns viewer preferences for greater customization and more accurate ad targeting. Most importantly, viewers can enjoy other advanced media services during their television experience, including VoIP (telephone services), messaging, recommendations, voting and IM chat capabilities. While the Fantasy Sports Trade Association (www.fsta.org) estimates there are 20 million active fantasy football players in the U.S., there are many other groups that crave additional interactivity. In fact, AT&T U-verse expanded its subscriber base in the first quarter of 2009 to 1.3 million people while FiOs from the telco Verizon grew 84 percent to 2.22 million customers. IPTV has generally been a television service from fixed line telecom operators like Deutsche Telekom, France Telecom and Hanaro (acquired by SK Telecom in Korea). These are digital TV services using technologies for the computer network and offering the “quality of service” expected from cable or satellite television. A telco IPTV service is typically delivered over a complex proprietary network, which has been engineered to ensure bandwidth efficient delivery of vast amounts of multicast video traffic. The higher network quality also enables easy delivery of high quality SD or HD content. This makes IPTV a preferred delivery platform for premium video content. According to Campbell, California-based Infonetics Research, the number of pure and hybrid IPTV subscribers worldwide doubled last year to 26 million and should surpass 150 million in three years time. These companies have grabbed market share by introducing a variety of innovations to benefit consumers, content owners and advertisers. Stephen Kim is Managing Director of Content at Hanaromedia, the IPTV division of SK Telecom in Korea. “When we launched our service, we definitely thought about differentiation. So we created and developed a new premium VoD window called Hana Box. It is not in the traditional window system at all, you could say that we broke the window. If you miss the film in the theater, you can watch it three weeks later on Hana Box, before the DVD release. You may pay a bit more but we checked the customer’s reaction. They are very satisfied with that price for that service.” One of the earliest telcos to launch IPTV in Europe was Belgacom in 2004. Belgacom has been successful in increasing the ARPU (average revenue per user) for its IPTV services by increasing the uptake of video-ondemand rentals. In the first quarter of 2009, ARPU was 17.2 Euro/month. Belgacom has concentrated on the discovery process by making it easy for customers to find the film they want. To do this, there are three channels within its “Cinema at Home” section, making it very quick, for example, to locate a family film. This helps overcome the problem of customers becoming lost or overwhelmed by the amount of ondemand content available, which is typically around 1,600 VoD movies at any given time. Bernard Rapaille, head of TV at Belgacom, has been involved with this effort for over five years and emphasizes the role of targeted content, And I have to say, when we talk to the content makers, they really want to get involved. This basically shows that if you tap into that energy and enthusiasm, and we give them the tools to create new kinds of content and services, we can entice the audiences to use IPTV more and more”. Some of these popular services include place shifting from Echostar’s Sling division. Another innovative offering is whole-home DVR from DirecTV. This represents a triumph for inertia. You can now view the DVR in one room, pause it, and then watch in another room—a single DVR drives the entire house. Ideally, the rich ecosystem of applications currently available for the iPhone (70,000 as of September 2009) could just as easily flourish on other hardware, including Internet connected televisions. This was the position taken by Google’s engineering vice-president Vic Gundotra at the MobileBeats conference. He called the Apple App Store trend a “fad.” It is exciting to think about the functionalities that software developers could bring to a connected IPTV environment. The holy grail for an IP-based television platform in the living room is better targeting for advertisers and more personalization for viewers. Marketers seeking a more targeted ad impression now know something about their viewers that they never had beforecontext. Next step will be the marketing of an open Internet IPTV set-top box where consumers can request television services a-la-carte by using their credit cards. I P T V R e v o l u t i o n Cable, Telcos, Satellite, TV Nets Are Geared Up For IPTV and the difficulties in getting TV and telco cultures to collaborate. “We should never forget that TV is emotional. TV is an emotion that we can deliver to the client in their homes. Now it has become a standard. I expect that within 24 months, analog will be completely finished.” There is, of course, another type of Internet television, which is the traditional video on a computer. That is the one using the open Internet and therefore lacks guaranteed quality of service. The audience for the latter is exploding. According to ComScore, a market research company based in Reston, Virginia, more than 158 million Americans, or 81 percent of the U.S. Internet audience, watched videos on sites like Hulu.com, ABC.com and YouTube last July. This was the largest audience ever. In an effort to protect cable subscription revenue and combat premium online video sites like Hulu, the two largest MSO’s recently launched TV Everywhere (Time Warner Cable) and ODOL, or On Demand Online (Comcast). This means that a Comcast subscriber in Philadelphia can input their own password protected authentication number (developed by Buffalo, NY-based Synacor) and view most of the content that is available onair online. Time Warner’s trial is available to 5,000 subscribers and features content from TNT, TBS, HBO, Discovery, CBS, NBC’s SyFy, AMC, WEtv, Sundance, etc. Most importantly, content can be viewed through programmer-owned websites, such as TV.com or Hulu. Internationally, broadcasters are focusing on advanced services for an Internet-based television viewing experience. Rahul Chakkara, the Controller of Future Media TV Platforms at the BBC in the U.K. explained: “People understand that bringing IP to the TV will enable new kinds of services, catch-up TV services, new kinds of applications from the web onto the television that gives them value. Through iPlayer, Canvas, Free Sat and other services, BBC is investing in bringing together the richness of broadcast with the power of broadband. “ More than 158 million Americans, or 81 percent of the U.S. Internet audience, watched videos on sites like Hulu, ABC.com and YouTube last July. This was the largest audience ever.
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