SUPPLEMENT SPONSORS VoD Leading IPTV ... - CSI MagazineSpain as among the IPTV operators well placed...
Transcript of SUPPLEMENT SPONSORS VoD Leading IPTV ... - CSI MagazineSpain as among the IPTV operators well placed...
These are trying times for IPTV
operators. Tough competition
from other broadcasters, and the
growing threat posed by online 'over the
top' content delivery services are forcing
them to re-examine business models,
particularly in relation to the delivery of
on-demand services. They need to exploit
IP technology in new ways to differentiate
themselves, allowing consumers to move
as far as they like away from schedule-
based, broadcaster-controlled linear TV to
a more personalised, content-based, user-
controlled experience. But it is likely that
those services can only be
supported through the
development of new
advertising and sponsorship
models.
As always, content is a key
factor. IPTV operators are finding it
hard to compete with other service
providers offering the latest premium
content, so are starting to focus more on
the 'long tail' of older content, including
catch-up TV services, instead. There may
also be commercial opportunities
associated with offering access to content
that relates to a subscriber's
local area. The provision of
services relating to user-generated
content (UGC) might also become a
significant on-demand revenue stream,
including community services, as well
as the sort of material that seems to be
proving so popular on YouTube.
“I think it would be interesting
for an IPTV operator to try and make
use of those concepts in their access
models, to index or categorise them,
VoD
SUPPLEMENT SPONSORS
SecureProtect your TV service and digital content with VideoGuard® CA and DRM, the industry’smost trusted solution. NDS VideoGuard® simplifies convergence with secure businessscenarios for TVs, PCs, Portable Media Players, mobile phones, and removable memory.NDS Secure solutions protect more content, anytime, anywhere, to the devices you choose.
www.nds.com
Trust our experience
Visit us at Amsterdam7-11 September 2007Stand 1.171
Targeted advertising, with a few caveats, might just makeIPTV VoD business models work, finds David Adams
In VoD we trust
Leading IPTV solutions
or put together a 'best of' selection,”
says Werner Strydom, IPTV product
director at content security specialist
Irdeto. “You could sell a subscription service
there, based on public domain user
generated content. To make that viable,
you'd have to combine that with ommunity-
based services allowing users to discuss
content.” Among pre-existing examples of
this sort of service, MyOwn TV in Belgium
enables consumers to swap this kind of
home-made material. Technology providers
such as SeaChange now offer specialist
UGC solutions for IPTV.
There may also be significant
commercial gains to be made through on-
demand gaming applications and services,
and from social networking-type
services. Participation in TV game
shows, or in educational programming
are also likely to feature in future.
Long-tail advertisingBut perhaps most significantly of all,
interactivity enables development and
deployment of new advertising formats,
including longer form advertising content
to which users can switch from VoD
content or a PVR video stream without
missing any of what they're watching.
The way interactive capabilities could
be combined with a more detailed level
of targeted advertising than has been
available up to now is surely the most
important attribute of IPTV technology
operators can exploit to underpin
business models. “The two-way nature
of IPTV networks means you can monitor
what's being watched, and you can build
up profiles within the bounds of that
country's data protection legislation,”
says Werner Strydom's colleague,
Pierre Hunter, director for business
development of IPTV at Irdeto.
If operators can develop the necessary
commercial infrastructure, it will be
fascinating to see exactly how much
money they can make. “If you're able
to target a certain segment of the market,
and you could measure the delivery
of advertising by proving people haven't
switched over during the adverts, you
could probably charge about four times
as much, because the IP stream allows
you to prove something has been
wathched, that you've got through to
your target demographic,” says Alex Holt,
head of media at Cable & Wireless.
“You're building up a picture of what
customers' preferences are. If you could
offer a bank 100,000 individuals you
could be pretty sure you knew were
thinking about buying their first home,
how much value would they place on
that, rather than having to take a
scattergun approach with marketing?”
The ability to target such tightly
defined demographic segments could
be particularly potent in markets that
already have a well-established local
ad insertion market. One major two-year
trial of Dynamic On Demand Advertising
technology completed in March this year
in the US, in St Louis, Missouri, where
cable TV provider Charter Communications
collaborated with several advertising
technology specialists. C-COR's nABLE on-
demand ad insertion solution was used
alongside automated campaign
management technology provided by Atlas
On Demand, and TVN's advertising
distribution system.
“We placed a variety of different
video/audio spots, ranging from 15
seconds to two minutes, in with short
form VoD programming,” explains
Joe Matarese, senior vice-president
of advanced global technology at C-COR.
“We measured how subscribers interacted
with that content. We allowed full trickplay,
attempting to see which ads were least
susceptible to subscribers fast-forwarding
through them.” Although the trial involved
cable TV, the data it has produced
demonstrates the potential value of this
technology to IPTV operators.
Matarese believes on demand
advertising formats could easily take off in
Europe: he points to Telefonica and Ono in
Spain as among the IPTV operators well
placed to take advantage of these
opportunities. IPTV operators could also
use t-commerce (interactive TV-based
ecommerce) as a revenue stream, with TV
viewers buying goods following product
placements in programming, or accessing
content relating to a programme they have
been watching.
But IPTV operators seeking to
maximise the commercial potential of this
kind of interactivity will have to find the
correct balance between consumers'
willingness to watch advertising in order
to access free or inexpensive TV, and
their dislike of an overly complicated TV
experience.
“It will be interesting to see what level
of interactivity subscribers are willing
to bear,” says Matarese. “There are
people looking at applications that allow
of lot of information and graphics going
onto screens during the ad. That can be
very compelling on large screens used for
HD, but there's a fundamental question
as to whether you should get too fancy.
Maybe you're best off just putting on an
ad that produces more of the lean back
experience people expect on TV.”
Other issuesThe other key factors IPTV operators will
need to consider as they construct new
business models are subscription
revenues and infrastructure costs. “I don't
know how long these new IPTV operators
have got to build up a core group of
customers for triple play,” says Andrew
Wilding, managing director at Internet TV
company Vividas. “They've had to
invest significant amounts of
money to build IPTV
networks. They've got
to build up a huge
number
of customers
to get a
return on their investment.
Voice services are effectively
moving towards being free, data
services also, so where do I make
money? At the moment, IPTV isn't
necessarily giving that compelling
drive to consumers to switch from
what they're doing. Even when
you look at subscriptions, a lot of
it is price-based, and when
markets go like that they have
a tendency to come down to
a contest between the
people with the best
financial clout.”
At the same time, IPTV
operators have to
recognise the threat
from online, over-the-
top content
providers. Some
observers think
both Internet TV
page eight
www.csimagazine.com Supplement IPTV
VoD
SUPPLEMENT SPONSORS
Leading IPTV solutions
VoD
SUPPLEMENT SPONSORS
and IPTV can co-exist peacefully for the
foreseeable future, particularly as there are
so many potential benefits from some of
these companies working together.
But some Internet TV companies are
bullish about the prospects of putting
IPTV operators under pressure. “Our
viewpoint is that an IPTV VOD
service is not going to give the
choice and flexibility that users
want,” says Wilding.
“A cable and satellite user
has a couple of hundred channels to surf
through, or people are going to Bittorrent,
because they're not prepared to wait for
programmes to get to the UK. The
challenge for traditional broadcasters and
IPTV providers is that more users are
demanding greater choice and
interoperability than they can provide.
They will have to embrace greater
interactivity and the ability to watch on
other devices.”
IPTV operators have long argued
against this, claiming that they can offer a
controlled, high quality TV experience
Internet TV can't match, because
of the variable quality offered by
broadband ISPs. “Over the top Internet
delivery is becoming a concern to every
single operator out there, but the
infrastructure challenges remain high,”
says Tom Rosenstein, vice-president
of product marketing and alliances at
digital video server specialist SeaChange.
“You now have even people like Google
saying the Internet infrastructure won't
be able to scale.”
Wilding responds by pointing
to the rapid improvements being made
by Internet TV players like Vividas.
“The argument is that you can't rely
on the Internet to deliver, but in many
respects the Internet is coping very well,”
he claims. “YouTube and Joost are
delivering content in an open environment.
People have always said you need an 8MB
connection for quality HD delivery, but we
EnableBuild your convergence business today with proven middleware, DVR, Broadband-IP, andheadend solutions that save money, centralize control, and simplify cross-marketing.NDS Enable solutions help drive growth by supplying more content to more devices,anytime, anywhere – generating revenues every step of the way.
www.nds.com
Extend your reach
Visit us at Amsterdam7-11 September 2007Stand 1.171
“We placed a variety of differentvideo/audio spots, ranging from 15seconds to two minutes, in with shortform VoD programming.”
Leading IPTV solutions
page ten
www.csimagazine.com Supplement IPTV
VoD
SUPPLEMENT SPONSORS
can do HD at 1.2MBps over a 2MB
broadband line. More and more people are
saying about Internet TV that this is a way
they can go to market cost-effectively.”
As he points out, Internet TV companies
may also have more flexibility in their
business models than IPTV operators
weighed down by distribution
infrastructures and STB deployments.
After all, Internet TV companies have
already had to explore a variety of ways
of making money, including collaboration
with IPTV and non-IPTV operators,
and the provision of online broadcast
services for corporate, and other one-off
events. Wilding believes IPTV operators
will eventually be forced to knock down
their garden walls and embrace open
technological standards, particularly
as more CE devices that allow content
to be viewed outside the home
and on the move become available.
Content is still kingThat argument may become
more compelling in the longer term,
but in the meantime there's still plenty
of evidence to suggest that the desire
to just sit back and watch almost
certainly still dominates consumer
behaviour. “The bulk of the TV viewing
populations just want to be entertained,”
says Irdeto's Hunter. “They want a good
quality picture, they want fast channel
change times, and they don't want things
to be too complicated.”
Even so, Internet TV players are
themselves facing a serious challenge
in attracting adequate viewers to win
advertisers; and there's no sign of
advertising revenue losing its pre-
eminence as a business driver. That gives
IPTV operators a good chance of success
if they continue to offer a high quality
experience and content viewers want
to watch.
As far as content is concerned,
it's not a question of exactly what
you've got, but what you can allow
the consumer to do with it. “Historically,
content has always been king, but the
future is around the customer being
king,” says C&W's Holt.
“Content is still really important,
but each individual has a different view
of what content they find exciting.
If you're truly customer-focused
and you know what they're after
and how much they will pay for it
then you could make money.”
In the end, for all the technical innovation
on show in this market, it comes down
to some TV industry basics: putting
together creative, attractive consumer
and advertiser propositions. SeaChange's
Rosenstein sums up the three key elements
to a successful IPTV strategy as: putting
together a truly competitive offering,
reducing churn, and using targeted
advertising. Advertising and sponsorship
models will be all-important if subscription
revenues are unreliable (even if subscriber
numbers are healthy). A simple pricing
model and a high quality, user-friendly TV
experience are the best tools they can use
to keep subscribers, and thus advertisers
happy. In one sense, it's not very
complicated stuff, but it's not going
to be easy, either. CSI
Audio70%
Software2%
Images3%
Other video5%
TV Shows5%
Movies7%
Adult video8%
Source: Canalys estimates, IPTV Analysis, April 2007
Most popular download Web content (legal and illegal)
Leading IPTV solutions