Internet TV has definitively arrived and it is here to stay. YouTube crossed the chasm for video on the Internet, and Internet TV is now steadily going mainstream. Here is some piece of evidence:
- Lean-forward TV gets traction. Mainstream users now feel comfortable watching videos on the PC. First it was the few minutes clips, but more and more people have no issue sitting in front of the PC for long videos of one hour or more. With bigger displays, many are getting used to watching video while browsing and chatting in the same screen.
- Broadband bandwidth keeps increasing, and video compression techniques keep decreasing bit-rates for the same quality. This trend is not going to stop any time soon.
- PC2TV concept has not crossed the chasm, but it is easier than ever to connect small-form, silent, low power PCs to HDTV-ready LCD TV sets with DVI/HDMI connections. The Mac Mini, the Vaio TP-1 or even the EEE Box PC are easy to connect and make Internet TV enjoyable from the sofa. Wii, PS3 and Xbox360 can also make the Internet TV connection, as well as some specific set-top-boxes, such as Apple TV, new Tivo models, or even LCD manufacturers adding an Internet connexion (see Sony Bravia Internet Video Link).
YouTube and Hulu are gaining a leading position in advertising-supported Internet TV. YouTube has reached an agreement with CBS to offer complete TV shows with inserted video ads, which is a different game from current UGC and short clips from TV shows. On top of that, many TV channels are developing their own Internet sites to deliver Catch-Up TV, i.e. broadcast TV-shows offered on-demand. Spanish TVE site is one fine example.
If all this is already posing a serious threat to IPTV and Cable, other over-the-top players are also strongly positioning in Video-On-Demand. Apple TV, Amazon Unbox or even Netflix offers of movie downloads, compete seriously with the VoD that IPTV telcos and cable operators offer.
How can IPTV telcos fight back and win?
- Embrace Internet as another channel for their offering. Provide users with access to their subscription channels on the PC (and mobile) , with a one-stop-shop offering for catch-up TV for all channels they offer. Enrich the lean-forward TV experience on the PC screen, and add interaction to main social networks.
- HDTV. Bet on better video quality and immediacy. iTunes can offer HD movies, but it will take a while to download. IPTV streams the content and the user watches immediately. With increasing bandwidth the advantage will erode with time, but the telco can always be ahead with newer ultra HD formats.
- Content is King. Exclusive content deals make the difference. IPTV telcos should focus on Live premium content (sports events, concerts). No Internet TV player can support millions users concurrently streaming a live HD broadcast of the Super Bowl. Only multicast IPTV can cope with it.
- Manage the complexity of the Home network on behalf of the user. Bet on set-top-boxes with PVR features and open to support Internet TV, including competitors offering for video downloads. Make YouTube and iTunes just another TV channel in your catalog. Position your set-top-box in the living room before someone else does and makes yours replaceable.
IPTV is a platform for a next-generation Pay-TV service. Exclusive content and a wide offering of channels is a key success factors for IPTV, as it was for Cable/Satellite pay-TV operators. Embracing Internet TV as part of IPTV offering is another one.