Internet TV or IPTV? Who will win the battle?

While Internet TV enjoys the hype, the reality is that Telco’s IPTV is growing steady, while Apple and Amazon keep mum on their movie download service numbers.

Every week we have news of players entering Internet TV or existing players reinforcing their offers. This week ReadWriteWeb reports news fron Netflix with additional set-top-box support, Hollywood studios creating a JV for VOD, Sony preparing a PS3 video download service and Motorola planning a mobile movie download service.

IPTV makes less headlines, but still AT&T U-verse, Verizon FIOS TV, Telefonica’s Imagenio, Free Telecom or PCCW keep adding subscribers (and new features) to their Pay-TV services. While revenues from IPTV telcos are far bigger than those of Internet TV, it is also true that Telco’s IPTV investment is huge compared to that of Internet TV.

Internet TV main advantages are global reach and the immense choice of a very Long Tail of semi-pros and amateur content creators . YouTube, MySpace and others, together with social networks/blogs provide a distribution power that enables these creators to reach the mass. See BarelyPolitical.com as an example.

Big Media companies content rights are usually negotiated by country, as this maximizes the return for content owners. While telcos do not enjoy the global reach of Internet TV, they are very strong players on a country basis, so Media companies find in telcos a strong distribution channel. That is why iTunes and Amazon Unbox started their service available only in US, to be extended to other countries as rights get negotiated.

This is the window of opportunity that telcos must take, before Apple, Amazon and even YouTube reach the mainstream with a better user experience than today, as bandwidth grows and new set-top-boxes connect Internet to the TV screens.

IPTV brings today QoS and exclusive content to the mainstream. Internet TV brings the nearly infinite choice and movie downloads (only in US) to a younger segment. IPTV has some advantage today. Will they be able to keep it? The battle is still open.

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