Bill DoddPresident & COO

HEAnet, Kilkenny, IrelandNovember 10, 2006

IPTV and the Triple Play: Challenges and Opportunities

What is Internet Protocol TV (IPTV)?

• Video delivered to a device using IP data packets

as the transport stream

• It is not TV delivered over the Internet in a

manner similar to cable or satellite because it is

a switched network

• Point to point connection to the multicast

source, whether it is using the public Internet or

private fiber transport

• Can be viewed on most any device capable of

displaying a video signal

• Can be a highly secure, operator controlled

network – end to end

Why is IPTV Relevant?

IPTV market emerging at very rapid pace

– 72 million IPTV subscribers worldwide in

2010 - nearly 25 times the 2005 figure

– Representing over $200B in market value at

today’s cable multiples

– Most all major worldwide telcos to deploy

IPTV over next 12-36 months

– Telcos must deliver on their promises to the

investment community, which translates to a

very big need for innovationSource: 2005, IDC

YouTube sells to Google for $1.6 Billion

Many Approaches to Delivering IPTV

• Public Internet or private fiber networks

• TVs, Computers, PDAs, Cell Phones

• Linear or VOD or both• Fiber or Satellite• MPEG-2 or MPEG-4• STB choices• Many middleware choices• DRM/Encryption options

Service Provider Model

The

Network

Student Housing Platform

The Promise of IPTV• More programming

– Hundreds of channels from major content providers

• More applications unrelated to entertainment

– Healthcare– Education– Productivity enhancements

• Switched network– Theoretically infinite channel capacity –

both for linear and VOD offerings– A la carte in the near future– Get ready to Google your TV

• Better picture quality– Digital from the head-end to the STB

• Significantly lower costs for bundled IP services

• Content encryption – DRM to the satisfaction of the studios

The Reality• Today - equal programming

– Same as cable or satellite • Switched network

– Promise not yet realized– Not enough content available . . . yet

• Better picture quality– True for standard def– BUT, no HD available

• Significantly lower costs for bundled IP services

– BUT, RBOCs can (and will) subsidize pricing of traditional offerings

• Content encryption – Still not much content available for

IP-based transmission

Legal Overview

• Types of Service Contracts– Bulk Agreements

• Residents can opt to subscribe independently to other services and premium programming

• Student Housing and Hotels typically Bulk Triple Play– Installation and equipment covered by owner

• Hotels: exclusive voice/video/data for rooms and common areas

– Right of Entry (“ROE”) Agreements

• Typically includes exclusive marketing for life of contract

• IPTV Programming Agreements– Need for Large Cooperative to be Competitive (i.e. NCTC)

– VOD content agreement aggregation required as well

Business Overview - I

• What you need to operate an IP based TV service– Network (long haul, last mile, in building)– Head-end– STBs– Middleware– DRM– Content– Buildings/Service Agreements– Customer Care

And make it all work!!!!!!!!!!

Business Overview - II

• What you need to be relevant and cost effective– Scale– Concentration of subscribers– Bundled offerings– Appropriately priced service agreements– Efficient hardware/software purchases– Effective and efficient network architecture– The right price for content– The right price for labor

Lessons Learned

• It’s all about the bundle• Bandwidth, bandwidth, bandwidth• Computer illiteracy rates• Low demand for phone service• HD and multi-stream PVR quickly becoming must

haves

Beyond the Triple Play:The Edge of the Future

IP-based Controls

Product

The FutureInnovation: Key to Extending the “Reach” of IPTV

• A glimpse offered from the past

• IPTV will ultimately use the public Internet for VOD and private IP

networks for live and real time streaming of high quality video in an

open architecture

• PVRs more disruptive than you might imagine

• IPTV’s future is far beyond that of just entertainment…healthcare,

distance learning, logistics, security…

• The applications that will drive IPTV usage is anyone’s guess and

everyone’s opportunity

IPTV Cable

Internet AOL

IPTV Cable

Internet AOL

Thoughts/Questions

• Meaningful deployment of real bandwidth is still a ways off– Will broadband-over-powerline (BPL) ever be relevant

• Wireless multicasting very, very costly

• IP applications will drive value – can’t just be a 3rd wire

• Content is king – Hollywood quickly embracing IP delivery, but still far to go

• When will TV quality video be available via the Internet in a usable fashion?

• Keep your eye on WiFi/Cellular dual mode phones—The 3rd Screen

• VOD business models will transform the economics of entertainment

• Microsoft is coming – but when? And with what?

A Closing Thought

“Technology is only one of many forces driving human history, and seldom the most important. . . . Technology only gives us tools. Human desires and institutions decide how we use them.”

- Freeman Dyson, The Sun, The Genome and The Internet

The real opportunity before Ireland is to discover, not determine, how humans and institutions desire for IPTV to be used.