Already Microsoft and Verizon have plans to incorporate social networking into their IPTV deployments, limited as they are to date. At CES, Verizon announced its second-generation FiOS TV product, which links Internet content with the TV set via an IP connection (see story on page 14). The newer capabilities are part of a software download that will first be distributed to Verizon's New Jersey FiOS customers and then to customers in its other 10 states by mid-2007.

Also at CES, Microsoft said it is linking its Xbox 360 and Xbox Live capabilities to Microsoft TV so customers of its service providers — including AT&T, BT, Deutsche Telecom and Swisscomm — can initiate chats, browse buddy lists and receive both text and voice messages from their TV sets (see story on page 14).

“This is bringing the social networking experience together with the IPTV experience,” said Ed Graczyk, director of marketing and communications for the Microsoft TV division. “Still, the big things we think are important about IPTV are that it creates a much easier, better, faster viewer experience. It's got instant channel zapping and a great user interface. It's a connected experience — the TV has been a technological island in the home, but with IPTV, it can sit on the home network and communicate with other devices in the home and outside the home. The fourth killer app is the social connectivity. Through the Xbox Live connection, you are connecting to the people who care about your community.”

That's an important distinction for service providers to make, said Danny Briere, president of the TeleChoice consultancy. Social networking and other features aren't the biggest part of IPTV, he said.

“At this point, at least, things like the Xbox Live connection and all the social networking aspects of this, those are nice add-ons for IPTV,” Briere said. “But that's not going to sell someone on IPTV if they already have cable or satellite. It may be a nice feature that helps reduce churn, but I think the telcos are still going to have to initially lure people in by competing on price. Once they've done that, it may be that all these add-ons convince people not to change once the promotional price expires.”

Briere cautions against viewing today's most common social networking sites as the prototypes for future services. “The presumption is that Facebook and MySpace and others are the next big generation of services — they are a generation, for sure, a next step in the grand scheme of things, but they are only a step,” he said. “What really drives this is video — that drives the traffic. What is going to be the big thing that causes kids to view video and to want to go and visit a lot? I don't think the services that Facebook and MySpace are pitching will give them a long-term advantage.”

In a real sense, Briere said, social networking is nothing new, even in the telecom space. “MCI Friends and Family was social networking,” he said. “Anything that draws more people into a network and gives them more reason to take part is social networking. The people that are winning — through ad revenues — are the ones that are staying ahead of the other people in coming up with things that are popular.”