Telco Tv

Spotlight: Netflix-LG offer worth watching

Dan O'Shea — Tue, 06 Jan 2009 10:29:24 -0500

As our sibling publication FierceOnlineVideo and other media outlets reported yesterday, Netflix and LG are teaming up on a video streaming service that bypasses set-top boxes (as well as Netflix' tradition snail-mail distribution method) by transmitting content directly to an LG HDTV.

The move, announced in conjunction with the International Consumer Electronics Show in Las Vegas this week, is the latest step away from traditional STBs' central role in consumer video services. In that sense, it is not too surprising, and is more or less an expected step, given the emergence of new TV models with Internet interfaces. Still, the Netflix offering could provide an interesting test for still-young telco TV services, and we'll see how it might influence how cable TV and telco TV players deliver their services in the future.

2008 Year in Review: Satellite TV partnerships remain important

Dan O'Shea — Mon, 22 Dec 2008 16:12:42 -0500

As IPTV offerings expand and continue to collect subscribers, what is to become of the satellite TV partnerships that helped telcos get started in the TV business? Not much, apparently, if activities in 2008 suggest anything. AT&T started the year with two satellite TV partners, DirecTV and Dish Network, that it received in its BellSouth acquisition. AT&T decided to let its partnership with DirecTV end, then later decided to extend its Dish partnership through the beginning of next year, but then ultimately decided to forge a new long-term resale partnership with DirecTV after the Dish deal ends in early 2009.

AT&T and other telcos continued to see good growth from these resale arrangements, which remain significant bundle elements, so it doesn't look like the satellite partnerships will be pushed out of the picture by wireline telco TV offerings anytime soon. Meanwhile, the satellite companies themselves had up and down years. At one point it looked like AT&T could acquire Dish, and there was speculation how AT&T's early break with DirecTV would affect that company. But by the end of the year, the speculation had flipped completely. At the time AT&T chose DirecTV for the long run, that deal gave DirecTV partnership with the three former Bell companies, and we suggested Dish had no "major" telco partners at all. Analyst Bernie Arnason argued that wasn't the case, since Dish actually has partnership with the next four largest telcos after the big three.

So, maybe the old DirecTV/Dish satellite war is alive and well, and if telco TV efforts take a hit from the down economy, the importance of satellite TV partnerships may yet increase.

2008 Year in Review: Targeted advertising nears prime time

Dan O'Shea — Sun, 21 Dec 2008 23:03:50 -0500

Way back in early 2007, a survey by Accenture and the Economist Intelligence Unit found that more than 46 percent of IPTV executives worldwide felt that targeted advertising could be a major source of IPTV revenue within the following year. That didn't happen by early 2008, and it still hasn't happened at the end of 2008-though, depending on your definition of "targeted advertising," you may feel differently. The general concept of targeted advertising has in fact traveled a long road in almost two years since that survey, a bumpy one with a few sharp curves. Many broadband service providers have delayed or put off tests of targeted ad technology, due to the controversy the somewhat intrusive technology generated.

However, many people in the TV sector feel that telco TV players may have a chance to roll out targeted advertising in a much more consumer-friendly way. In 2008, the ad insertion solutions that telcos will need to advance their ad capabilities toward the targeted advertising model came a long way. The survey respondents back in early 2007 were right about one thing: Targeted advertising can be a major source of revenue. We're not there yet, but a little bit closer.

2008 Year in Review: Telco TV/OTT integration still looms

Dan O'Shea — Sun, 21 Dec 2008 18:41:16 -0500

Heading into 2008 one of the most-asked questions in the U.S. telco TV sector was: How should telco TV service providers deal with over-the-top Internet video content?

That question was batted around frequently throughout the year, and while we gradually got the idea that OTT video should be part of a telco TV offering rather than excluded from it, we have yet to see a U.S. carrier fully exploit the potential. Verizon Communications has talked extensively about beginning trials for various approaches to integrating traditional TV and online video, and last month a Verizon executive speaking at TelcoTV 2008 talked about the use of on-screen widgets to connect with all kinds of Internet applications. Other telcos have envisioned similar offerings, but we'll have to wait until 2009 to see how it all turns out.

2008 Year in Review: Market metrics present and future

Dan O'Shea — Sun, 21 Dec 2008 14:26:01 -0500

Ongoing subscriber growth gave the world's IPTV service providers plenty to cheer about in 2008, so it's no surprise that several of FierceIPTV's most-viewed stories in 2008 revolved around market research and predictions related to subscriber numbers and revenue for the sector. In March, Strategy Analytics said U.S. IPTV revenue hit $694 million in 2007, but was expected to soar to $14 billion by 2012. ABI Research that some month said a worldwide subscriber tally of 13 million in 2007 would jump to 90 million subscribers by 2013. Most of the growth up to this year was coming from Western Europe, and while that certainly continues to be true, the U.S. market, China and other Asian markets, and a few Latin America countries are starting to get in on the act.

Of course, a wide variety of numbers from a wide variety of sources came out throughout the year, some more impressive and hopeful than others, and many market research firms continue to revise their predictions on a quarterly basis. Can the global IPTV market keep up with the optimistic expectations we all had earlier this year? The U.S. market's emergence in 2008 and specifically the huge subscriber growth from IPTV giant AT&T and top U.S. telco TV player Verizon Communications have been very encouraging. Just last week, AT&T hit its goal of signing up 1 million U-verse TV customers by the end of this year. However, 2008 is ending on a note of caution. The economic crisis has given us reason to expect slower adoption, or at least slower build-outs. We should know much more in earlier 2009 as service providers report their fourth quarter subscriber numbers and year-end financial results.

IP-Prime's fall raises further questions

Dan O'Shea — Tue, 16 Dec 2008 10:37:23 -0500

Does the upcoming demise of IP-Prime cast a negative light across an entire market, or is it just a reflection of one company's inability to realize adequate returns from that market's opportunity? Is it an indictment of a business model, or an indication of how much competition has developed among companies with similar business models? And, does the planned end of IP-Prime in a way illustrate how healthy a business opportunity over-the-top video could be for small telcos?

The answers to all of the above may be "yes."

Question 1, Part 1: SES Americom's plan to end the much-touted IP-Prime wholesale service, coming just a month after the U.S. IPTV industry sought re-assurance at TelcoTV 2008, does cast a negative light on the small telco TV market amid a very challenging economy. It may take a few months to sort out whether or not any telcos will need to shut down IPTV services or kill launch plans because of IP-Prime's closure. SES Americom is giving those customers plenty of time to look for other options, but satellite may have been the best or only option for some. The company's statement that end user adoption was slow could convince some telcos that a branded, separate TV service just isn't worth it.

Question 1, Part 2: Still, SES Americom's announcement that it will end IP-Prime pretty clearly communicated that IP-Prime didn't meet the company's own ROI goals for that particular offering. It said it still believes in IPTV over satellite. Perhaps some small telcos still will use satellite, but will have different partners for content or systems integration purposes.

Question 2, Part 1: Wholesale IPTV offerings have looked especially attractive in recent months as telcos have become more threatened by landline losses, but also more cautious about the costs of investing in a new service. TV seemed to be both a customer loyalty and revenue answer, but maybe the failure of IP-Prime to collect enough usage illustrates that there are just not enough customers in this particular part of the market to support wholesale operational costs.

Question 2, Part 2: But, don't dismiss wholesale on a, well, wholesale basis. Avail Media and Falcon in particular have pressed into the market with an array of technology partners, many of whom are the biggest names globally in IPTV and video capabilities. On a related note, major network equipment suppliers also are expanding their outsourcing capabilities for the telco market. These companies certainly are armed to make wholesale IPTV work, and the fact remains that IPTV is still too expensive for many telcos to build out on their own. Yet, they must do something to offset voice revenue losses. At another level, there are locally-focused firms like Midwest Video Solutions looking to helped the smallest telco avoid the high costs and complications of providing TV service.

Question 3: If you don't think the rest of the debate is compelling, then fast-forward to the notion that IP-Prime's demise is just another reference point highlighting the increasing and somewhat surprising viability of OTT video as a component of telco broadband offerings. A Vudu executive may have been the interloper during last month's TelcoTV opening keynote session, especially sandwiched between telco TV mac-daddies AT&T and Verizon Communications, but he pointed to a business model that seems to make a lot of sense as OTT video continues to explode: Why create a cable TV-like service and then figure out how to integrate OTT video when you can skip the build-out costs and partner with a device company that can bring very un-cable-like content and additional value to your existing broadband connection. If voice is moving to broadband connections and more video is traveling over those connections, maybe the market is trying to tell you something.

For now, it is safe to say that TV and video continue to be an opportunities for small telcos, but that questions remain about the best ways to deliver and maximize those opportunities.

-Dan

Amino to acquire Tilgin STB division

Dan O'Shea — Thu, 20 Nov 2008 10:17:10 -0500

Amino Communications, which acquired AssetHouse Technologies earlier this year, announced that it has agreed to acquire Tilgin AB's IPTV set-top box (STB) division. The moves comes amid a new forecast from ABI research suggesting the STB market could decline after 2012, yet Amino has made assertive moves in the sector with the connectivity options, feature support and design of its STBs. That work paid off last week at the TelcoTV 2008 event, where Amino won a Telco TV Vision award for Best Customer Premise Equipment, as well as the Best in Show award.

As the STB market is changing rapidly, consolidation may be exactly what's needed. The acquisition of Sweden-based Tilgin IPTV will augment U.K.-based Amino's support for H.264 HD IPTV STBs, as well as better access to middleware solutions from Tilgin partners Ericsson and Nokia Siemens Networks.

Amino said in a press release that "new features stemming from the acquisition will include picture-in-picture, whole-home connectivity and green-power..."

For more:
- Here's the Amino press release

TelcoTV 2008: Price still trumps innovation

Dan O'Shea — Wed, 12 Nov 2008 09:13:35 -0500

Heavy Reading is due to announce new research results Wednesday afternoon at Light Reading-affiliated TelcoTV 2008, so it's no surprise Light Reading is offering an early glimpse at what the HR survey says. The agency's survey of about 200 consumers shows that low prices are still the best way for a telco TV service provider to beat the competition.

This information arrives as service providers and their vendor partners are falling all over themselves trying to figure out innovative TV applications that have been presumed to have the real power of competitive differentiation. However, Light Reading notes that the curvey was conducted very recently during a time when macro-economic pains have been especially acute. You have to wonder if different results might have occurred earlier this year, or perhaps some next year--unless we are all burning our TVs by then to heat our homes.

Telcos probably do not want to get into a bigger price war with cable TV operators, but they may need to read the writing on the wall and keep expectations for adoption of some new applications low while the pricing concerns play out.

For more:
- Light Reading reports

TelcoTV 2008 ready to roll

Dan O'Shea — Tue, 04 Nov 2008 10:34:34 -0500

The premier event on the North America telco TV landscape will be kicking off in just one week, when many in the market will be converging on Anaheim, Calif. They won't be headed to Disneyland (well, maybe later in the week); they'll be getting together for TelcoTV 2008. But, before you head to Anaheim, be sure to check out our TelcoTV Preview this Thursday, Nov. 6.

TelcoTV is one of the only events in the U.S. that really features equal floor time for both large and small telcos, so attendees will get the full story on the progress of telco TV in North America.

Keynote speakers for next week's event include Dan York, executive vice president of content for AT&T, and Eric Bruno, senior vice president of consumer product management and development for Verizon Communications. Both of these companies showed strong TV subscriber growth during the third quarter, so we'll be looking forward to hearing what will be next from them in terms of new TV capabilities and service packages. We're guessing both will address the future integration of TV and online video in some way.

In addition, several Tier 2 and Tier 3 telco execs will be speaking at the conference, according to show organizers:

Rob Koester, Senior Manager, Broadband Product Development, Consolidated Communications
Jeremy Graves, COO, Marketing, Sales & Competitive Services, Valley Telecom Group
Mike Steciuk, Director of Technical Services, MTS Allstream
Scott Watts, IPTV Manager, North State Communications
Dale Merten, COO, Toledo Telephone
Derrick Bulawa, General Manager & CEO, BEK Communications
Bruce Holdridge, Director of Commercial Operations, Zona Communications
Mitch Emerson, VP Sales, Backspace Communications
Brandon Zupancic, Director of Network Operations, Canby Telcom
Mike Nawrocki, Director of Standards, Verizon
Larry January, Technical Analyst, Panhandle Telephone Cooperative

The event comes at an intriguing time for telco TV players. Many carriers have made an initial push to gain subscribers, and might be ready for the next phase of developing their offerings into a mature service. But, some vendors might be concerned that telco TV investment could dip as new service rollouts slow and macro-economic pressure take a toll. After TelcoTV 2008, be sure to return to the FierceIPTV Editor's Corner for a full review of the event and implications of what we learned there.

-Dan

Verizon adds 233,000 FiOS TV customers

Dan O'Shea — Mon, 27 Oct 2008 15:42:33 -0400

Verizon Communications declined to give AT&T the honor of being the fastest-growing U.S. telco TV provider during the third quarter. Verizon reported today that it added 233,000 TV customers during Q3, which was just 1,000 or so more than AT&T reported for the third quarter last week. Verizon's FiOS TV service also remains the most successful telco TV service in the land with 1.6 million subscribers.

AT&T last week provided the first clue that telecom industry watchers don't have to worry too much yet about slower TV subscriber growth, and Verizon confirmed the notion and the recent bullish stance of its own CEO, Ivan Seidenberg, by posting big TV numbers. The third quarter's additions totaled about 57,000 more than FiOS TV's subscriber additions of 176,000 in the second quarter. The FiOS TV customer base has more than doubled since this time last year.

Also, Verizon said in its earnings report that FiOS TV sales penetration increased to 19.7 percent, compared with 15.2 percent in last year's third quarter. The service is now available to about 8.2 million households.

For more:
FierceTelecom has the full earnings report

IPTV operator investments may shift

Dan O'Shea — Sun, 19 Oct 2008 22:17:03 -0400

As IPTV operators move beyond the first-phase build-outs of their networks, they are keying in on adding value for customers. As a result, they may find themselves weighing a variety of different focuses for their ongoing IPTV investements, according to new research from ABI Research.

"In the current economic climate, allocation of capital and resources is becoming a difficult proposition for all IPTV operators as they consider more fiber and back-office investments," said ABI Research principal analyst Robert Clark, in a press release. "Broadband, mobile, online gaming and storage, and home networking, in addition to the professional and technical services support that can be required to deliver multi-play offers seamlessly, are becoming intricately tied to IPTV operators' success."

For more:
- see this ABI press release

AT&T chooses DirecTV over Dish

Dan O'Shea — Sun, 28 Sep 2008 20:16:46 -0400

AT&T, perhaps looking to head off speculation about its satellite TV plans after last week's extension of its resale partnership with Dish Network, has announced that DirecTV will be its sole satellite partner starting in February 2009. It may seem like a surprising choice, given that AT&T just extended the Dish arrangement and previously had stopped re-selling DirecTV in the former BellSouth region, but the carrier had maintained a stance all along that it was evaluating its options.

With the ongoing success of IPTV, it is not clear how much longer a satellite TV partnership will be important to the telco. It sells bundles that include satellite TV and has way more satellite TV customers (2.1 million) than IPTV customers (549,000, as of the second quarter), but IPTV has been closing the gap.

Meanwhile, as cable TV and telco TV players knock heads, and DirecTV benefits from ongoing partnerships with the big telcos, you have to wonder what will come of Dish Network. The company's parent, EchoStar, last year was rumored to be close to getting acquired by AT&T, and now Dish has no major U.S. telco partners at all.

For more:
- read this story at The Wall Street Journal

Multi-DVR homes are increasing

Dan O'Shea — Wed, 17 Sep 2008 22:39:43 -0400

About 27 percent of TV households in the U.S. now have a DVR, and about 30 percent of those DVR households have at least two DVRs, according to Leichtman Research Group. Though both are still modest numbers, this is just what telcos rolling out whole-home DVR services wanted to hear, as it is a clear indicator of interest in having the capability on more than one TV. AT&T just announced broad availability for its whole-home DVR capability, and such an offering should be among the hottest IPTV features in the coming year.

"The number of US households with DVRs has essentially doubled in the past two years, and-with a continued push from cable, DBS, and Telco TV providers-will likely double again over the next four years," said Bruce Leichtman, president and principal analyst for Leichtman, at Multichannel News.

(Editor's Note: This post has been corrected from its original text, which included a mistake.)

For more:
- check out this press release from Leichtman Research Group

Verizon sees business for business TV

Dan O'Shea — Tue, 26 Aug 2008 22:57:50 -0400

The small business sector often has been an elusive market for telcos as they rolled out different services. So Verizon's decision to offer FiOS TV services to the small business market might have drawn a few snickers. But the telco now says business is picking up for its business TV service. Verizon did not offer actual adoption numbers, but, instead, rolled out a customer case study in a Telephony story. Telephony talked to the owner of a Dallas area oil and lube shop who offers the TV reception as something for his customers to watch while their cars are serviced. He replaced his old satellite service with FiOS because it offers more channels and doesn't go out of service during a storm.

For more:
- read this story at Telephony

Related articles
Verizon added 176,000 FiOS TV customers in the second quarter. Verizon report
Verizon added 263,000 FiOS TV subscribers in the first quarter. Verizon report

Study: Carriers preparing for multi-platform video

Dan O'Shea — Tue, 19 Aug 2008 09:36:32 -0400

Telco TV service providers are seeing increased competition from over-the-top online video firms, but a new study from Heavy Reading suggests telcos are still interested in providing distribution platforms for multiple kinds of content, including online video. More than 90 percent of 120 service providers surveyed said multi-platform video distribution will be important in the next five years. Still, they disagree over how broadly it will be delivered in the home--only 32% think PC-TV connections will be crucial.

For more:
- read this post at Contentinople

Related articles:
Verizon is testing online video over the TV. Verizon report
IOL Netcom sees both PC and TV video as important. IOL netcom report

Verizon signs deal for exclusive movie premiere

Dan O'Shea — Mon, 18 Aug 2008 17:16:04 -0400

Verizon Communications' FiOS TV customer will have the chance tonight to see an exclusive Disney movie premiere via video-on-demand, three days before it airs on the Disney Channel. The original Disney Channel film is called "The Cheetah Girls One World," and FiOS customers will have access to it at no extra charge. Such advance showings or exclusive premieres are one way telco TV service providers can start to gain notice among customers as purveyors of value-added content.

The idea is not completely new, as satellite TV companies have done it in the past. But telcos have been criticized before for not working closely enough with Hollywood and the rest of the content industry, to establish telcos as valuable content partners. If telcos are willing to pay the price for such deals, it can help them promote their nascent services and gain some friends in the content world.

For more:
- see this story at MediaPost Publications

Related articles:
Telco TV players discussed the need for close content ties at NAB this spring. Telco TV report
Broadcasters seemed uncertain of their IPTV role at NAB 2007. Telco TV report

U-verse TV aims for 1 million subs this year

Dan O'Shea — Thu, 24 Jul 2008 08:54:33 -0400

If AT&T has anything to do with it, Verizon Communications soon will not be the only U.S. telco TV player with more than 1 million customers. AT&T said in its second quarter earnings report yesterday that it added 170,000 U-verse TV subscribers during the quarter, and that it still expects to surpass 1 million customers for the IPTV offering by the end of this year. The telco giant ended the second quarter with about 549,000 subscribers.

The company's U-verse service is available to 11 million households in about 53 markets. AT&T officials said the TV service has achieved 10 percent penetration in a handful of markets, and they also made the case that access line loss is not as severe in those markets as it is in other. Still, AT&T's landlines are down about 8 percent since the second quarter of 2007.

For more:
- see this coverage at Multichannel News

Related articles:
AT&T added 148,000 U-verse customers during the second quarter. AT&T report
AT&T U-verse landed in the Chicago area earlier this year. AT&T report

Verizon in no rush to change from RF to IPTV

Dan O'Shea — Tue, 20 May 2008 11:56:23 -0400

Verizon Communications often gets lumped in with the IPTV crowd (especially by me. I'll admit) even though the technology it uses to deliver TV services is actually a cable TV-like RF broadcast overlay. I sometimes have made mention of the distinction, but other times have used IPTV as a catch-all term to describe Verizon and other companies, when what I really meant was "telco TV." In some way, I was going by the old adage that the technology type does not matter to the customer. But, of course, it does matter in this venue, so I'm turning over a new leaf and will be careful not to describe Verizon as an IPTV service provider.

I mention all of this because Verizon is saying it intends to stick with RFTV for now, and is in no hurry to make a transition to IPTV. Proponents of IPTV always have touted greater interactive capabilities and superior bandwidth as the benefits of IP over RF architectures, but as the leading "telco TV" player, Verizon does not appear to be hurting for either. For more, see this story at Light Reading