Friday, October 05, 2007

IPTV is Hype!

IPTV. This term has been buzzing around for a while. While some telcos do indeed offer TV delivered over IP, how many carriers actually offer an IPTV experience? Not HDTV. IPTV. Some kind of innovative TV experience. None that i know of. TelcoTV is being called IPTV by the likes of VZ (who MAY have over-stated their numbers). It is a strategy to get consumers to think that you have some cool new gadget. It is a business plan to move to a Blue Ocean.

"Hey, they have TV, but we have IPTV."

As a strategy, it has mostly worked, since some of the people on FiOSTV think WOW. I look at it and think Hmmm. DirecTV offers more HD channels than anyone. DISH offers a better selection of channels (just not the NFL Ticket). But I guess for consumers stuck with POCTV (plain old cable TV), who didn't move to digital, but bought an LCD TV or plasma, then got FiOSTV, it may be cool. (Except for those who had such an awful install experience that they churned back to cable).

The promise of IPTV was On-Demand, Interactive Entertainment. We ain't there yet.

BTW, for those in the ISP space who are looking at IPTV (or TelcoTV or TV over IP), for you to even move forward, ask yourself if you have 5000 subscribers who you can deliver it to. That is the minimum to get in - 5000. With a take rate of 15%, that means you need a base of 33,000 subscribers. It's a lot of work. PLUS, as my cable clients will attest, how do you recoup the $400 set-top box price at $5 per month lease?

The Blue Ocean move is brilliant. (Even if it is based on Hype.) But the reality is that these markets are flat - TV, cellular, and broadband (and wireline is declining) -- flat markets mean high acquisition costs since you have to take customers away from other carriers. You aren't growing a market or new segment of the market, you are simply replacing a service. Take-Aways have big acquisition costs - and long ROI periods.

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