Transforming IPTV from “Me too” to “Me want!”
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Those of us who monitor the IPTV industry for a living are often asked, “Will this finally be the year of IPTV?” It’s pretty clear that IPTV is well-established, at least in North America, Western Europe, parts of Asia, and increasingly, in Eastern Europe. But what’s not necessarily clear is first, ‘What do consumers expect from IPTV?,’ second, ‘What are service providers giving them?’ and most importantly, to what benefit?
In the markets where IPTV is already well-established, service providers tend to focus on incumbent competitors. The assumption is that consumers are generally happy with what they’re already getting from their existing cable or satellite providers, so operators should provide an IPTV service that offers much the same thing, with a few improvements or additions. Even with their recent emphasis on whole-home PVR and networking, casual observers would be hard-pressed to distinguish the broadband TV offerings of Verizon or AT&T from those of Comcast or Cablevision. The broadcast channels and VOD content selections are very similar.
Furthermore, there’s little evidence that the race to provide more channels and VOD titles is even the right race for IPTV operators to run. When VOD is introduced into a market, usage rapidly increases, reaches a plateau, then falls to a steady state. A recent study from CTAM (the Cable & Telecommunications Association for Marketing) and Nielsen shows that two years ago, cable subscribers watched 2.59 pay VOD movies per month; now, they watch 2.71, while free VOD is growing much faster: 3.57 programs a month two years ago, vs. 6.52 programs a month today. But 80% of VOD usage is centered on 20 percent of the available programs.
Similarly, according to Nielsen, the average U.S. household receives 118.6 channels but watches only 16, or 13% of that total, for at least 10 minutes each per week. Sixteen channels! The operator supplying that average household is paying for 102.6 channels that aren’t getting watched at all in any given week.
Telcos should be asking themselves: “Why drive channel counts ever higher if subscribers don’t watch them?” To be realistic, carrying a full channel line-up that compares favorably with the local competition is “table stakes,” as is HDTV. But if the operator harnesses the power of its IPTV middleware platform, it can develop finely-grained programming packages that focus on clusters of interest and complement it with on-demand programming that your subscribers really want. Or even better, use the inherent capability of IPTV to enable your subscribers to create their own programming packages. (This is something that consumers want, but cable operators have been fighting for years).
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© 2008 Penton Media Inc.













