It’s hard to miss the fact that, with TV, telcos are building service portfolios well outside of their historic areas of focus. This trend won’t stop with the “triple play,” as telecommunications carriers partner with wireless operators to create a “quadruple play” and begin to go even further, by adding home media services and online storage so that subscribers can share personal media content (the baseball lexicon lacks a term). Not to mention online and TV-based games, instant messaging and other network-based capabilities.

At the moment, there’s some disagreement among analysts as to exactly how many subscribers will taking which services from which types of service providers. For example, an April 2005 report from UBS Global Equity Research claimed that the real success of “interactive TV” has been in the blossoming of online video games, while the fiber-enabled TV services being rolled out by the RBOCs won’t be interactive, but rather, a clone of cable. Meanwhile, another April 2005 report, from Friedman Billings Ramsey, said that "...(Comcast) subscribers snapped up roughly 200,000 more high-end (including HD-DVR) set-tops than the company had first budgeted..." But, if telco IPTV replicates cable, then it will include the kind of TiVo-like service that the UBS report sought to downplay.

But this is a short-term tactical view. It’s becoming clear that a larger discussion is already underway: the notion of on-demand “anytime, anywhere” delivery of any content to any device. In this vision, media and personal communications content will be delivered and consumed under multiple consumer contexts. As service providers envision such future service portfolios, and as they implement TV headends and increasing broadband delivery capabilities today, they are also thinking in terms of leveraging common content processing, service delivery and IT infrastructure resources and uniting these services under a single brand umbrella.

As early evidence of this trend, Verizon offers the FiOS brand and SBC uses the Project Lightspeed moniker as catch-alls for all of the services that they will deliver over their broadband fiber optic networks as they come online and evolve. This thinking comes out of the basic marketing premise of cross-selling, along with the practical need to keep capital equipment and operating spending at a reasonable level.

In response, many technology suppliers, including major network suppliers, as well as IPTV-specific software vendors, are getting to a point where they can demonstrate (if not implement) a ‘cross-media,’ multi-purposed applications environment to prospective customers. Microsoft has been demonstrating the potential interoperability of services between PCs, home media centers and TVs, using a common Microsoft-based applications and media delivery framework.

Similarly, at the April 2005 conference of the National Association of Broadcasters (NAB), Siemens AG showed a media workflow and production system that could take in content from the field and output TV programming. The same underlying system could in turn be integrated with external systems that schedule the broadcast of this programming and allow subscribers to use a variety of devices, from handheld mobile devices like cell phones and PDAs, to their TV remote controls, to program the home video recorder to record it for the subscriber to view it at a time and place of the subscriber’s choosing. Behind the curtains, separate systems exchange control messages and metadata with one another via standardized programmatic interfaces, over the network. Already, suppliers have demonstrated interactive television on mobile phones equipped to receive digital broadcasts, allowing viewers to take surveys (SMS-to-TV) or send images to a show (MMS-to-TV) by pushing a response key; even enabling it to be used as an interactive remote control.

IPTV is emblematic of a complete inversion of the subscriber-service provider-marketer dynamic. It is part of an “on-demand IP world' that is subscriber driven, not advertiser driven. The Internet has conditioned consumers to “pull” in what they want, to a point where they have become less receptive to what is “pushed” at them by traditional television. In other words, consumers are growing accustomed to being are the ones in control, and changing the channel is not enough. In coming years, service providers will have to meet the demands of these consumers with new services, to deliver content wherever and whenever the subscriber wants it, and their technology suppliers will have to follow suit.

Several recent consumer studies reflect this trend. An April 2005 report from Arbitron/Edison Media, concerning consumer use of Internet broadcasting, the Internet and digital media, provides a snapshot of "On-Demand Media Consumers" as of January 2005. The report said that:

• 81% of consumers have access to the Internet from any location. This is a rise from the 50% penetration figure from just six years ago.
• As of January 2005, 15% of Americans say they have listened to Internet radio in the last month, and 8% have listened to Internet radio in the past week.
• Fourteen percent of Americans (35 million people) have watched Internet video in the last month, and 8% have watched in the last week.
• 55% of TiVo/DVR owners say that their digital recorder has had a "big impact" on their life. 57% of broadband Internet users say that their Internet connection has had a "big impact on their life."

According to JupiterResearch, as reported by MediaPost, the number of online adults who prefer the Internet as their main source of news grew more than 35% in the last four years, at the expense of television and newspapers. Currently, over 26% of online adults prefer the Internet for national and international news, compared to 19% in 2001.

Also supporting the premise that consumers will want “everything everywhere” is a recent study from UK-based Informa Media. Informa Media predicts that a total of 125 million subscribers will be served by mobile TV cell phones by 2010, growing from 130,000 this year to 83.5 million in 2010, when nearly 125 million consumers will watch cell phone TV. Samsung already offers such devices, with Nokia following suit in early 2006.

Again, these reports provide supporting evidence that media consumers are fully expecting an on-demand IP future that’s free of (or less bound by) the constraints of time, place and situation.

Today, IPTV allows a blend of live TV, stored media content and data to be presented to subscribers. Not only can the subscriber control what is on TV; he or she can control when by using advanced features such as PVR/DVR. Client-server middleware-applications platforms designed for IPTV have been available from IPTV technology suppliers from some time. These suppliers have historically offered a platform with a relatively inflexible suite of ‘horizontal’ applications, including the Interactive/Electronic Program Guide (IPG), an interface to Video-on-Demand, a ‘walled garden’/TV portal that brings Internet-based content to the TV, and digital video recording (DVR/PVR).

In coming years, more flexibility and more applications are sure to come, from more suppliers. But a day is coming when the capabilities we call IPTV today become a feature-set of something bigger and hopefully, able to fulfill the broader needs of subscribers and service providers alike.

Steve Hawley is principal consulting analyst of Advanced Media Strategies. He may be reached via his Web site, www.tvstrategies.com.