IPTV interactivity to 'shake' foundations of cable, satellite
Feb 27, 2007 8:00 AM
IPTVU: What's your perspective on the role of IPTV operators in reshuffling the multichannel video delivery deck and how broadcasters can benefit from this restructuring of gatekeeper control of distribution (i.e., cable)?
JA: When true IPTV arrives and more interactivity is available, there will be more video searching capability. The consumer will have a more enticing and meaningful experience to interact with digital content. This new reality will shake the very foundations of the current model employed by cable and satellite operators. Cable and satellite operators will need to rebuild their networks to compete with the super-intelligence of next-generation telecom networks.
It is difficult to imagine that broadcasters do not benefit from having their content distributed over more intelligent network architectures than those networks currently provided by cable and satellite operators. More intelligence in the network is a good thing, and the next-generation networks being built by telecom companies will have more intelligence in them than today's cable and satellite distribution networks.
It is unlikely that any new video distribution network (such as a network provided by a telecom company) can be ultimately successful unless the distributor has access to local broadcast channels. Through subscription to cable and satellite, consumers are accustomed to having their local broadcast channels bundled in the mix of the channels available to them. So, from the standpoint of local broadcasters, it is clear that yet another network provider is a good thing. Having more companies bidding for access to broadcast channels is ultimately a good thing for broadcasters. Telecom network provision of video and IPTV is definitely helpful to broadcast stations as they negotiate for additional retransmission fees. More bidders for broadcaster content will increase the value of their unique content.
Further down the road when IPTV is more fully deployed and the network is even more intelligent than it is today, the possibilities for broadcasters are even better. The ability to have more interaction with advertising through IPTV controls could open new revenue streams for broadcasters.
IPTVU: Should the availability of IPTV service in a broadcast DMA influence a broadcaster's decision about what to do with multicast channels? If so, how?
JA: Yes, perhaps in a longer time frame but probably not immediately. First, IPTV and the richness of broadband video will not be widely deployed for a few years. Almost certainly it will be a few years before IPTV and broadband video are widely available throughout an entire DMA. Broadcast DTV signals and multicasting are already here, creating a lag between their availability and the broad availability of IPTV.
In the longer term, the consumer is probably going to be increasingly attracted to the bundle (the bundle of voice, video and data, and certainly the bundle of all video in one place and available on one STB). With the architecture of IPTV and broadband video, there is no theoretical limit to the number of channels. As a result, the IPTV operator is interested in acquiring as much content and services as possible into one bundle to reduce customer churn. It would seem that a broadcaster's multicast services should be more desirable to an IPTV provider than to a channel-limited cable system.
IPTVU: Do you believe IPTV operators will eventually originate programming, or will they strictly enter into retransmission agreements to source content?
JA: I think this depends upon the size and resources available to the telecom provider/IPTV operator. If one looks at the current universe of cable systems as an historical example, there are a few cable systems providing locally originated content, but very few. Those cable companies that are providing some locally originated programs tend to be the largest systems owned by the largest MSOs, which can support these efforts. It seems to me that this will be the same with telecom companies in their IPTV deployments. Some of the largest telecom companies are likely to experiment with new video and digital content applications. But even in the case of the largest telecom companies, it is probably easier for them to arrange for joint ventures with current content companies than to produce original programs.
There are opportunities here for telecom network operators and broadcasters to work together to produce local content that perhaps is only distributed on one of the multicast channels of the broadcast station or on one of the channels of the local IPTV network operator. Local telecom companies are looking for content that can attract customers and subscribers, so to the extent that the local broadcaster can assist in these new programming ventures, then there can be real synergies between the two.
For example, earlier this year, Verizon announced FiOS1 as a local content service. It is my understanding that FiOS1 will be seeking agreements with broadcasters to repurpose their content on FiOS1. Michelle Webb, executive producer/general manager of Verizon's FiOS1 local channels, will be speaking at Telecom@NAB2007's Broadband Video Conference.
For more information, visit: www.nabshow.com and www.lightbulb-communications.com.
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