W. Peter Prenosil MSc MBA

Managing Director

Vigorous Co. Ltd.

What is IPTV?

.... or is it Internet Video?

• IPTV is not TV that is broadcasted over the Internet.

• "IPTV is generally funded and supported by large telecom providers who have undertaken the mission of creating a competitive replacement product for digital cable and satellite services." (Jeremy Allaire)

• "While the "IP" in its name stands for Internet Protocol, that doesn't mean people will log onto their favorite Web page to access television programming. The IP refers to a method of sending information over a secure, tightly managed network that results in a superior entertainment experience."(Source: Businessweek - "The real meaning of IPTV")

• IPTV is represented by a profile of closed, proprietary TV systems such as those present today on cable services but delivered via IP-based secure channels representing a sharp increase in control of content distribution.

To be successful, IPTV services must:

• Get the right content;

• Price, bundle, and promote the services with the margin mix that will be palatable to the consumer and profitable for the service provider;

• Have the ability to track large volumes of events as subscriber numbers grow, so that service providers can:

- Assure revenue and margins- Settle properly with media and content owners- Analyze customer usage for segmentation and price modeling- Exploit the opportunity for cross sell and up sell- Attract advertisers

• Internet Television, is quite different in terms of the model for the consumer, the publisher and for the infrastructure used itself.

• In the Internet of Video, as Jeremy Allaire calls it, or Internet Television approach, the model is open to any rights holder, as it is based on the same publishing model that exists on the Web: Anyone can create an endpoint and publish that on a global basis.

• Internet Television is an outgrowth, not an overhaul. Internet Television is able to ride on existing lowest common denominator infrastructure including broadband, ADSL, Wi-Fi, cable, satellite. It doesn't require new infrastructure to work or provide value to users.

• "An open platform gives content providers control over the brand and customer relationship," says Jeremy Allaire of BrightCove.

• This, he feels, will create an explosion of niche content that people can access directly over open, IP-based systems. "Nearly every small niche can be economically supportable."

Metrics

• Today’s average residential broadband user consumes about 2 gigabytes of data per month, which costs the service provider about US$ 1.

• As downloading feature films becomes more popular, they might consume an average of 9 gigabytes per month, costing service providers US$ 4.50.

Metrics• The average IPTV user will likely consume

about 224 gigabytes per month, at a monthly cost to service providers of US$ 112, a giant leap from the less than US$ 5 attributed to Internet use.

• If that content were high-definition video, the average user would be consuming more than 1 terabyte (1000 gigabytes) per month at a cost to service providers of US$ 560 per month.