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IPTV WORLD FORUM 2006: KEY THEMES
6 – 8 March, 2006
Olympia, London
Event Organisers: Junction

Key themes to emerge from the three days, summarised by toomuchtv

1. Differentiation is everything
2. Connectivity is everything
3. Partnerships are everything
4. Is content everything? Yes and no
5. Open, public internet does not mean chaos
6. What I want, where I want it, when I want it
7. Killer apps
8. Interactivity will finally take off
9. Incumbents have little to fear
10. Incumbents are under attack

1. Differentiation is everything

ISPs and telcos insist they will not be dumb conduits for the lucrative activity of content providers and retailers. "If competing services are offering the same then all you’ll get is a price war” (Chris Coles of Myrio). So how is commoditisation to be avoided? Technology and regulation have parts to play, but most important is differentiation. Despite this no speaker outlined a clearly “differentiated” model in their own market.

In addition to IPTV services needing to be differentiated from a commoditised telephony utility, three other types of differentiation were mentioned over the three days:
      -Differentiating one IPTV service from another
      -Differentiating an IPTV service from a Cable or Satellite service
      -Differentiating closed IPTV services from open internet

The elements that form the building blocks for differentiation proposed by speakers include:
      -Service quality/reliability
      -Ease of use
      -Triple/quad play
      -Personalisation
      -Localisation
      -Convergence
      -Interactivity
      -Billing
      -UI
      -Affinity
      -Portability
      -Ubiquity

Price, content and marketing were rarely mentioned as differentiators; exceptions were Belgacom and Associated Media Group, who both explicitly mention content as crucial for differentiation. (See also content below).

Means of distribution is not considered a differentiating factor.

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2. Connectivity is everything

Two main aspects:

a) General take-up of broadband.

Many statistics were provided to illustrate:
- the growth of broadband versus non-broadband homes
- the growth of broadband in some territories versus in others
- the growth of 1 to 2 Mbps broadband and broadband over existing cabling versus predictions for “next generation” broadband

There is much disparity.

b) The last 10 metres.

The LLU challenge of the past decade has largely been replaced by practicalities surrounding the right connection from curb to rooms. Technology to deliver tv over IP is relatively easy; technology to avoid the need for workmen to remove baseboards is more problematic. Discussion included reliability/unreliability of wireless for delivery from the curb; power cables were also mentioned as both problems and delivery mechanisms.

The general consensus is that issues around broadband connectivity are merely factors, not barriers.

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3. Partnerships are everything

The closed, vertically-integrated approach was not advocated by any speaker. Leading the charge against the closed approach in favour partnerships are the large consultancies and systems integrators. Consultants Ovum warn telcos not to pretend they can compete directly with media companies; each partner instead needs to recognise their own strengths. BT’s Andrew Burke agrees. (Note: Burke's departure from BT was announced exactly one month later, 6th April). IBM insist disintermediation is key. Sun advocate an open value chain of “complementary relationships”; Cisco talk of “coopertition”.

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4. Is content everything? Yes and no

Some speakers (Belgacom and unsurprisingly Sony Pictures Television International) consider content to be “king”. But in general content was not presented as either the primary objective or the “killer app”. Rather, content is something to be dealt with. Therefore the long tail is presented as an asset management challenge rather than a customer benefit; a disintermediated route to content becomes a security threat rather than a customer benefit; viewer choice becomes a DRM and payment challenge rather than a customer benefit. The forum was reluctant to embrace the “content is king” mantra; the forum was more concerned with access to content than content itself. This ambivalence towards content is best summarised by Tom McKeever (Ovum): “If I can get all the differentiated video I could want from web-based video services, then the proposition from platforms or portals or providers needs to be more than just content”. And so we’re back to convenience, bundled services and other differentiators.

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5. Open, public internet does not mean chaos

No speaker took the platform to represent use of the public internet to distribute or retail content, nor was the public internet acknowledged as the key threat. Legitimate but disintermediated services (buy direct from the producer or rights holder) were not discussed in much depth. Glenn Hall from HP dismissed the “just give me the content” approach as unrealistic (“There’s a huge industry in place. It’s not going away. Learn to work with it”). Reviv Pablo, Entertainment Solutions, dismissed open internet for various reasons including quality of service and the notion that telcos/ISPs may either block or charge for video content. Bill Scott from IBM suggested regulation may also play a role in protecting ISPs.

Local markets differ enormously and undoubtedly the public internet will be used for disintermediated content channels; the likes of Amazon and Google and start-ups we haven’t yet heard of will have significant role in providing more direct access to content.

But ultimately the consensus view among forum speakers was that consumers want managed, reliable, high-quality services, and this means closed services.

The security industry (protecting service access and content through both prevention and forensics) is mature and prepared. The premise that the internet is secure was not challenged.

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6. What I want, where I want it, when I want it.

Regardless of how it’s done, regardless of what we call it (“IPTV”, “Network-delivered, packet-based tv”, “Next Generation TV”, “Me TV”), regardless of the business model, regardless of the market, regardless of who enables it, consumers are learning to expect control: they want to watch whatever they want, on the device of their choice, at the time convenient to them. This is at the heart of next generation television, and anything less than this will soon appear strange. While the degree and the methods and the timeframes were up for discussion, no-one challenged this fundamental driving principle.

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7. Killer apps

Four main positions:

a. The killer app is TV.
b. The killer app is the combination of VOD, DVR, personalisation and portability.
c. The killer app is the broadband back channel
d. The killer app is the triple play with VOD, the quad play with VOD, or the “seemless single play” (Microsoft TV)

IPTV will be characterised by many configurations of all four positions. If another killer app exists no-one is mentioning it.

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8. Interactivity will finally take off

Interactivity was mentioned several times and the received wisdom that IPTV is “inherently interactive” was upheld without challenge. This orthodox view asserts IPTV is inherently interactive in one or both of two ways:

a. the killer apps of VOD, DVR and personalisation mean this is television that the viewer controls; the viewer creates the tv experience s/he wants. IPTV is still a “sit back” experience, only now with lots of “lean forward” bits to it.

b. The always-on bi-directional broadband connection into the STB means the viewer can in theory have a full “dialogue” with the content provider.

These two facts combined with the elimination of the bandwidth restrictions characterising conventional broadcasting mean interactive programming and advertising can finally start delivering the sorts of experiences that so far have been difficult (eg multiple streams for selecting camera angles or selecting your preferred ad) or disincentivised by relatively high call costs, with the added benefit that the provider/advertiser can accurately measure use.

The forum speakers added little to this orthodoxy, other than to point out that well-made Electronic Programme Guides (platform-level interactivity) will be crucial to differentiate services and meet high consumer expectations for reliability, quality and convenience.

In a panel discussion about next-generation advertising John Holland (Ensequence) anticipated next-generation interactivity in which current hindrances (interoperability and industry secrecy) are largely overcome; Peter Birch (ITV) agreed, and also appealed to agencies to understand that interactive advertising is a format in its own right. Birch referred to an ongoing research project with iBurbia into new advertising opportunities (Holland did not ask whether the outcome will remain secret). Errol Baran (Channel Four) anticipated zero wastage, 100% targeted ads.

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9. Incumbents have little to fear

For several reasons:

a) Hollywood studios and the global media industry are too big and pervasive to be dismantled; in fact once you eliminate those things that aren’t owned by or reliant on this hegemony, there isn’t a lot left to do the dismantling.
b) The post-Napster music industry is thriving.
c) The internet is believed to be secure.
d) There is an expectation that free-to-air channels will continue to exist even within relatively advanced IPTV markets like Italy’s. Sport, news and event-driven programming will continue to provide temporal anchors.
e) If like most you believe this is a step in the evolution of television, rather than a revolution, the incumbents, even if large and unwieldy, should have time to react and apply their strengths.

a) The triangle of fear (Telcos, ISPs and broadcast channels each feeling threatened by the other) is real, and much of IPTV development has been motivated by a “can’t afford not to” mentality.
b) The security industry is robust but not fool-proof and sometimes emphasises investigating rather than preventing theft.
c) Most people in the industry expect a new Amazon or Google to emerge but no-one knows what this will be, where it will come from or what the effect will be.
d) No-one really knows exactly which models will be right for themselves in their own market.
e) The next-generation set-top box is a trojan horse; IP over broadband is a great model for distribution - and re-distribution.