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Today's Top Stories
1. Teachers offer to buy out Bell Canada
2. FCC waives FiOS set-tops
3. MySpace goes after YouTube
4. Microsoft poaches Prudential analyst
5. IPTV forecasters diverge
Also Noted: Spotlight On... Tiscali IPTV snags Sky channels; Beeb preps iPlayer; Amino bows new set-top; and much more...
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 A note to readers-
You may notice that this week's issue of FierceIPTV has a different style (not to mention a different picture in the Editor's Corner below!). Well, after nearly two years since FierceIPTV's launch, it's time for us to take it to the next level. Deborah McAdams, a veteran cable industry journalist who has written for TV Technology, Broadcasting & Cable and CableFax, will take the helm of FierceIPTV starting this week. Deborah is in a unique position to draw from her experience covering the cable industry to bring you deep analysis of the week's IPTV news. I'm still at Fierce, I'll just be spending more time writing for FierceWireless. So if you have any wireless news tips, be sure to send them my way. And if you haven't done so already, please introduce yourself to Deborah. -Brian
 
The next wave of TV is here...
My very first memory of television was the procession of John F. Kennedy's funeral on a small round-screened black-and-white cabinet model. Our household received two-and-a-half channels with a 30-foot Yagi mast on the roof via waves traveling through the air.
I never dreamed I would someday report on the complexity of the TV business, nor that within my half-life it would consist of ones and zeros zipping through strands of glass.
For more than 40 years, television was the entrenched domain of broadcasters, licensees of a Federal Communications Commission created specifically to ensure that airwaves were used in the public interest. Then some cowboys in Wyoming who couldn't receive signals with the usual antennas built towers and strung coaxial cable to their respective ponderosas. Cable television quickly spread around the country and displaced the broadcast medium.
Then some guys realized that anyone could set up an 8-foot C-band dish in the back yard and pass up the cable company altogether. There was a period of years in the early '90s when trailer-hitched C-band dishes were a fairly common site on rural byways. The dishes were eventually reduced to the size of a serving platter and the direct broadcast satellite business evolved into a 30-million subscriber threat to the U.S. cable TV industry.
Meanwhile, executives back at the telephone companies were contemplating their own moves into the TV business. Four big Bells--Bell South SBC, Ameritech and GTE created a TV venture dubbed "Americast," while Bell Atlantic, Nynex and Pacific Telesis came out with Tele-TV. Both were simply cable overbuilds that became capital sinkholes. AT&T tried to buy its way into the TV business with a $100 billion of existing cable systems, including John Malone's TCI in Denver. The move caused AT&T to implode. Comcast wound up with the TCI systems, Malone ended up with DirecTV, and telcos were left with a dwindling landline business in the face of mass cell phone adoption.
But there's always another meanwhile. This one involved a young scientist in the basement of a General Instruments facility who had not been told that it was impossible to reduce the digital payload of a television signal. So he did it. Thus, digital television was born, and from there, the compression algorithms that spawned IPTV.
Today, television is a business of multiple distribution models and egalitarian content creation. The primary challenge is keeping up with whom is doing what and how.
Even the acronym "IPTV" is growing out of itself. We take it here to refer to both physical, telcoTV architectures like Verizon's FiOS and online content streamers such as YouTube and Google Video. It all comes down to bits traveling over an Internet Protocol network.
IPTV, with its innate bandwidth efficiency, will one day be the primary distribution form for video, and that's why I took on the task of interpreting it for Fierce. I've been a student of television since analog waveforms stunned a nation in November 1963. It is one of the most profound techno-sociological phenomena of the modern era, "Age of Love" notwithstanding. I hope to continue telling the story of television as it evolves, and I'm delighted to be able to do it with the type of aggressive, cutting-edge media companies that characterize the Internet age.
My goal is to cut through the jargon and present the IPTV business in a compelling, straightforward way that anyone can comprehend. So help me out. Send feedback, notes, criticisms, thoughts and rants. Let me know what's going on and what you need to know.
I would like to thank Brian Dolan, Sue Marek and the rest of the staff at FierceMarkets for their support, even as I was nearly ejected from the Fierce office building for riding a bike, and later a mall for covering the iPhone launch, during my first week on the job. I look forward to seeing what else is in store. -D.
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1. Teachers offer to buy out Bell Canada
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The board of Canada's largest communications concern, Bell Canada Enterprises, agreed over the weekend to take the company private in the largest leveraged buy out in market history. Bell Canada directors agreed to a $48.5 billion acquisition by a triad of investors led by the Ontario Teachers Pension Plan.
BCE is the self-described largest digital TV provider in the nation, with 1.82 million subscribers at the end of '06. The telco initially launched video service via satellite 10 years ago, and in 2004, over Very High Speed DSL. BCE was in fact the first North American telco to test the Microsoft IPTV platform, according to CNET.
BCE reported revenues of $16.6 billion last year, including $1.15 billion from the video unit.
Canada's No. 2 telco, Telus, circled BCE a few times before unceremoniously dropping out last week. The New York Times reported on speculation that Telus might return with a counter bid, in spite of a $752 million break-up fee.
Going private is the latest trend among media properties, especially in the United States, where the Internet is cannibalizing more traditional forms. In terms of management, private companies have more flexibility and are not prone to manipulation by hedge funds.
For more analysis of the BCE deal:
- Briefing.com summarizes BCE's previous efforts to be sold
- BCE provides official details
 Fixed Mobile Convergence Progress Report
July 17, 12:00 pm ET / 9 am PT / 5 pm GMT
Host: Sue Marek, Editor-in-Chief, Telecom Group
Speaker: Stuart Carlaw, ABI Research |
Sponsored by
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| Many early FMC offerings in Europe have met with lackluster results, despite the early promise of new revenue streams for wireless carriers and wireline operators. Nevertheless, analysts still say that the U.S. is ripe for fixed mobile convergence. What's the real story behind FMC? Are there current success stories? Register now! |
2. FCC waives FiOS set-tops
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IPTVs were not expected to be covered by a federal directive to remove encryption from set-top boxes, but regulations issued Friday codify their exemption. Verizon's FiOS TV was among several companies that received a waiver from the so-called "integration ban" that went into effect Sunday.
The impetus of the ban was to allow people to buy cable TV set-top boxes at retail stores, so the encryption technology that allowed access to cable channels could not be "integrated" into the box. Before FiOS left the drawing board, cable operators agreed to put encryption onto an SDI-like enclosure--a CableCard--that would plug into compliant devices.
Verizon received a waiver based on its argument that FiOS is just getting off the ground, and the based on the nature of its set-tops, the integration ban could bring deployment to a screeching halt.
Verizon huzzahed over the ruling, the cable industry hissed and few if any set-top boxes appeared at stores.
Just two years after launch, FiOS TV has amassed 500,000 subscribers in 12 states, and David Fish told Fierce that "we're close to serving other planets, and we believe Pluto is a planet." Such areas are not currently under FCC jurisdiction.
For further details on the integration ban waiver, check:
- the FCC order
3. MySpace goes after YouTube
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MySpace went beta last week with a video site aimed directly at YouTube's piece of the pie. MySpaceTV looks remarkably similar to YouTube, including the now ubiquitous small video window with the triangular play link in the center. The "Dramatic Chipmunk Remix" was the featured video on the home page July 2. It had 348,278 plays and a rating of zero percent.
Given that MySpace is a News Corp. property, an IPTV play is no surprise. What is surprising is that it took two years. News Corp., which also owns the Fox TV networks, bought MySpace in July 2005 for $580 million. The justification at the time was to drive traffic to the Fox websites. All that was missing was video clips. No more.
For more:
- Digital Music News offers coverage
- The beta site is here
4. Microsoft poaches Prudential analyst
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Microsoft has tapped a Wall Street expert to lead its Media & Entertainment Group. As general manager of the group, Katherine Styponias will spearhead relationships with major content suppliers. Styponias comes to the Redmond computer behemoth from Prudential Equity Group in New York. One industry watcher noted that Styponias has her work cut out for her, given the lackluster results of Microsoft's IPTV efforts. Gamers continue to wait for Xbox 360 consoles with IPTV capability five years after two Microsoft engineers made a prototype. According to research from The Diffusion Group, souped-up game consoles represent the next wave of multimedia devices, if people can figure them out.
Read more on this:
- the Microsoft party line on Styponias is available here
- the Diffusion Group posted a summary of its research
5. IPTV forecasters diverge
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IPTV will generate big bucks, drive interactive services and have lethargic take-rates, depending on whose research is cited. iSuppli, a market research firm out of El Segundo, Calif., sees the IPTV market hitting $5.79 billion in just four years, a 14-fold increase from $422.7 million in 2006. Just what was included in that calculation was not clear, because last August, iSuppli predicted the IPTV subscriber base would generate $27 billion in 2010. (iSuppli did not respond to Fierce queries by press time.)
The firm also foresaw a worldwide IPTV sub base of 63 million by 2010, up from 2.4 million in 2005--a "stunning" compound annual growth rate of more than 92 percent, it said.
Research from SNL Kagan in Monterey, Calif., said au contraire, at least from the telcoTV perspective. Kagan's "Telco TV Outlook" predicts "modest" rates on telco video services through 2011, given the cost and complexity of laying thousands of miles of fiber.
Vendors will nonetheless fare well, according to Infonetics Research of Campbell, Calif., which anticipates two- to threefold growth in that segment between 2006 and 2010. Set-tops will be a big piece of that growth as IPTV services actually reach homes.
Then Pyramid Research in Cambridge, Mass., broke out anticipated revenues from video-on-demand, a model the company considers ideal for IPTV. Globally, Pyramid said VOD over IPTV would generate $4.7 billion in 2012, equating 18 percent of total IPTV revenues, and up from $121 million in 2006.
For more:
- Lightwave covers the iSuppli report
- The Kagan report is covered by eMediawire here
ALSO NOTED
TODAY'S SPOTLIGHT... Virgin's loss, Tiscali's gain
Broadband ISP Tiscali UK scored a programming deal with BSkyB that will give the IPTV player the full complement of basic Sky channels. Launched in 2001, Tiscali is now the third largest broadband provider in the United Kingdom, with 1.7 million subscribers. The deal puts Tiscali competitor Virgin Media at a disadvantage after Virgin lost the Sky slate in February. Tiscali UK is part of Tiscali SpA based in Cagliari, Italy. VNUnet.com has more details.
> The beta version of the BBC's VOD service dubbed "iPlayer" is set to launch in July. Article
> Amino rolled out the AmiNET530, an HD, MPEG-4, DVR set-top for IPTV. Release
> French broadband provider Free launched TV Perso, a service that allows users to create and share personalized video channels on television. Article
And Finally... There's nothing like a buzz bandwagon, and there's nothing of late to compare to hoopla surrounding the iPhone launch. ON Networks of Austin, Texas climbed on board with 10 new free, hi-def "lifestyle" shows available through iTunes. The selection includes "Cocktails on the Fly," where a "quirky mixologist offers creative cocktail-making tips for drink enthusiasts and aperitif aficionados alike." And for the morning after "Cocktails," there's "Zen Living," with tips on making everyday life more balanced and healthy. Release
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> Fixed Mobile Convergence Progress Report - July 17
Many early FMC offerings in Europe have met with lackluster results, despite the early promise of new revenue streams for wireless carriers and wireline operators. Nevertheless, analysts still say that the U.S. is ripe for fixed mobile convergence. What's the real story behind FMC? Are there current success stories? Join FierceWireless Editor Sue Marek and Stuart Carlow of ABI Research to get an update on the state of FMC. Register now.
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> Knowledge is Power: IPTV Evolution Answers Your IPTV Business Questions - Sept. 10
IPTV Evolution @ Internet Telephony is the place to conduct your research and find practical answers in a unique panel discussion format that puts you face-to-face with peers and industry leaders. Gain insight from all players in the value chain - set-top box makers, content providers, equipment vendors, standards bodies, and service providers. Register Today & Save!
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> WiMAXCounts: The 1st Commercial WiMAX Deployment Database and service
WiMAXCounts is an interactive and flexible strategic online tool dedicated to tracking and analyzing deployments worldwide. Bottoms-up, real-time data and analysis at your fingertips! Stay in the know about the Market trends, financials and deployments worldwide! Take a free tour at www.wimaxcounts.com
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> Need a job? Need to hire? Visit FierceWirelessJobs
Announcing FierceTelecomJobs, the new FierceMarkets careers site. Find the perfect job or post your openings at telecom.fiercecareers.com.
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