Your Guide to IPTV - Part One 

Gain the Knowledge to Make Your Mark in a Growing Market
What is IPTV?

Internet Protocol Television, or IPTV, is the delivery of digital television services by broadband to registered end-user subscribers. The programming is sent digitally across the network in the form of IP packets and then “re-assembled” to be shown on the television by a set top box at the end of broadband connection. It is its great capacity for extensive interactivity which is a clear differentiator – its two-way nature opens up the possibility for a range of rich interactive services including video-on-demand (VOD), web browsing, advanced email and messaging services. All these services rely on the internet protocol, the universal standard for inter-networked devices. The IPTV subscriber can therefore have access to a range of video, voice and data services with elaborate mechanisms for interactivity both for broadcast channels and also on demand services

Where in the world is IPTV deployed today?

At the end of 2005 there were approximately 2 million IPTV subscribers worldwide, the bulk of subscribers residing in Hong Kong, France and Italy. While the subscriber base of operators in these countries still continues to grow, 2006 has seen new operators and geographical areas rollout IPTV. Across all regions of the Americas, EMEA (Europe, Middle East and Africa) and APAC (Asia Pacific region) IPTV services are being launched in earnest. And the growth of subscribers will not be small. Most industry forecasts indicate that from now until 2010 the numbers of IPTV subscribers will double each year to 30m. There are currently 50m digital cable and 75m digital satellite subscribers so this figure is not inconsiderable and will put IPTV in a very strong position going forward

IPTV is not a new concept – since the dawn of the internet its digital nature has always been able to merge voice, video and data.  The reason why now it not only excites the television and media industry but also public imagination is because it can sustain top quality user television experience comparable if not better than digital terrestrial, cable or satellite. This transition is because of these key developments:   

       Better internet infrastructure

Recent years have seen major breakthroughs in overcoming the physical constraints of building IPTV networks and migrating customers across to it. With privatisation, de-regulation and local loop unbundling over recent years, competition has driven up the level of internet network infrastructure investment making accessing the internet much faster. Typical of this are the rollouts of ADSL2+ and VDSL2.      

 Increase in broadband speeds

The internet access speeds that the end consumer has available to him from his service provider are increasing exponentially. Only a few years ago we were mesmerised by 56kb/sec dialup modems, and high-speed connectivity was largely provisioned in the form of expensive ISDN lines. Today, speeds of 2Mb/sec are commonplace with 8Mb/sec increasingly becoming the consumer expectation. In some countries, 70Mb/sec are already available. Photo sharing, music downloads, VoIP and instant messaging sites all continue to benefit from faster broadband. Top of the list of bandwidth hungry applications by far though is video and IPTV.  With quality-of-service (QoS) being of paramount importance for video services and an increasing need to support multiple IP-enabled devices in the home, this is driving bandwidth requirements higher still. The successful increase in broadband speeds is a self fulfilling prophecy – it allows new technological developments such as HDTV which in turn continues the new drive for further increases in bandwidth.

       Better compression technology

The improvement in digital compression techniques such as the development from MPEG-2 to MPEG-4 and H.264 AVC means high quality video can now be transmitted using lower speeds. The provision of high bit rate video services therefore becomes more efficient either through savings in bandwidth or through enabling high definition television (where around 8-10Mb/sec is needed). In markets with a strong pay television history this will be important for IPTV operators as they must not only match but exceed rival digital services.

 

       High broadband penetration world-wide

Broadband penetration has had to reach critical mass for IPTV rollouts to be viable. There are now around 250 million broadband subscribers spread evenly across the Americas, EMEA and APAC. With this critical mass, knowledge and understanding of the power of high speed internet is now almost universal, enabling video seamlessly to be added to data and voice.

       Increased high quality content

IPTV operators are now starting to win more content rights. Previously, major content providers, mainly the major film studios and sporting rights holders, have been disposed to allowing cable, satellite and terrestrial broadcasters a clear run to use their content. IPTV operators had to overcome a vicious circle.  When the number of subscribers to an operator remains small, the content rights holders are unlikely to give them content even if the price they are bidding for content is on a par with bids from cable, satellite and terrestrial. However IPTV operators need the content to increase their subscribers in the first place. In the past 12 months this has shown signs of change. Video On Demand is central to IPTV operators’ business models so this enables closer links with the big eight film studios. Wider use of sporting rights such as goal clips, near live matches, on-demand repeats, also gives options for content rights holders to slice the cake in many different ways. T-Online in Germany now has the rights to the Bundesliga and, for example, BT Vision recently signed for near live rights to Premiership matches. These are examples of how far IPTV has progressed in buying traditional television sporting rights in the past year.