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Viodi View Newsletter - May 11th, 2005

Local Content Workshop

What's Personal TV?

By Ken Pyle, Viodi, LLC

The IPTV 2005 conference provided a panoramic view of the IP Television landscape by mixing speakers from chip vendors, telco suppliers and telcos. Bill DeMuth, CTO of Surewest Communications kicked off the conference with his keynote address. His talk was important, as it provided the 250+ attendees, many of whom were chip suppliers, with a view of telco requirements.

DeMuth stressed the importance listening to customers and developing customer service approaches that allow for customer feedback to shape the requirements for new services. In implementing new services, he explained that open standards are critical for telcos, so they are not dependent upon sole suppliers and that they can benefit from economies of scale from standardized components. He pointed out that the challenge in this open environment is integrating all of the pieces from disparate vendors.

Two features that are at the top of their priority list are support of high definition and personal video recording. High definition will require advanced compression solutions and he encouraged the industry suppliers to work together to provide solutions. He emphasized the need for integrating solutions into the operations workflow to make for more efficient installations and a superior customer experience. He cited how their field sales representative can use a wireless lap-top to schedule an installation prior to leaving a customer’s house.

This is part of the reason they have a 70% close rate on prospects whose homes they visit. It gets to the other point that Demuth made and that is there is a window of opportunity that is not going to be open forever. He encouraged telcos to act, even if it means having to go with a smaller vendor.

Chris Kitchener of Myrio echoed DeMuth when he said, “that consumers have evolved to the point where they require instant gratification.” What this means is the window of opportunity that DeMuth discussed is getting shorter and shorter with each passing day. Steve McKay of Entone asked the question whether or not VOD is still a differentiator. He suggests it has become table stakes and that within three years VOD will become a matter-of-fact topic. He also correctly pointed out that DVRs are good training devices that teach people to expect on-demand services.

Phil Corman of Microsoft stated that telco’s survival is dependent upon IPTV. “Me-too" is not good enough, however, as the inherent interactive capabilities of the IPTV network have to be exploited, if the telcos are going thrive. He also suggested that Microsoft is trying to help bring Conditional Access into the, “open world and drop the CAS tax.” It will be interesting to see where this effort takes the industry.

Ervin Lebinovici of Bitband gave an overview of one their customers, FastWeb, which has gone from zero to over 200,000 VOD subscribers in a few years [more about Bitband in the inset article]. Mark Gray of Kasenna suggested that the confluence of low cost storage, bandwidth increases and content availability is making IPTV a reality. He talked about their vForge development environment that allows telcos to develop their own iTV applications. He cited one customer who has more engineers working on the development of iTV applications – things like karaoke, chat and conferencing – than Kasenna has on its engineering staff.

These sort of interactive applications were demonstrated in the booths of companies like ICTV and Digisoft.tv. The Digisoft demonstration caught my attention, as they showed a combination PCS/iTV service that could potentially make for a stickier telco offering. Using a standard Sprint PCS picture phone, they snapped my photo and sent it to an ADB hybrid RF/Ethernet set-top box. The link to the picture appeared in an email. Another link appeared that allowed me to see a map of the location from where the photo had been sent.

Clearly, this application will not be something that everyone will embrace. If, however, applications like this makes it easy enough for the average Joe (or Jane) to transmit easily his photos and movies to the television sets of friends and family, this new brand of personal television will fragment the television viewing audience even more than it already is. Instead of being exclusively a one-to-many experience, television will evolve to support a one-to-one experience as well.

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Peter Lowten and I had a chance to sit down with Ervin Lebinovici at the IPTV 2005 conference to discuss why the FastWeb deployment has been successful. With over 200,000 IPTV subscribers spending over $100 per month, FastWeb has been held up as an example of how to implement IPTV. FastWeb has also been a key customer of Bitband, representing 40% of the 500,000 streams Bitband has deployed.

He suggested that operators must target the service, not the technology. FastWeb has put together a bundle that is attractive and is not available from the competition. To get ahead of the competition, an operator must, “get going”. Standards are great, but in today’s environment, operators do not have the luxury of waiting for perfection. In this go-go environment, system integration and scalability become critical to long-term success.

FastWeb’s success has translated into Bitband’s success, as Bitband’s sales for the first quarter of 2005 were greater than the entire fiscal year 2004. With ten deployments in Europe, Bitband has set its sights on the United States. The opening of their new Silicon Valley office is evidence of that U.S. focus.