TELECOM '04 Showcases IP Video Services

Telco TV, a handle used to describe the delivery of digital content services over telco infrastructure to compete with cable broadcasting and shore up the triple play, has been talked about for years.

The arrival of IP as a viable transport protocol for high-end video has taken the idea of telco TV even further, making quicker rollouts of television services possible and paving the way for enhanced, rich media services, such as video chat via television. Even so, telcos looking to launch broadcast services have a tough road ahead, with cablecos firmly entrenched in that market. TELECOM '04 is bringing IP video to the forefront with an eight-session IP Video Conference aimed at making telco TV rollouts a little more plausible-sounding.

The time may be right: Analyst firm In-Stat/MDR expects more than 100 percent growth in telco TV subscribers in 2004. Digital TV service over ADSL, VDSL and fiber networks is becoming increasingly viable, as improvements in the data rates and reach of DSL let carriers reach more customers with the right amount of bandwidth.
 
At the same time, advances in video compression are reducing the amount of bandwidth needed for each video stream. "Competitive threats and fixed-line revenue pressures are encouraging telcos to become active in offering digital TV to their subscribers," says Michelle Abraham, a senior analyst with In-Stat/MDR and a TELECOM '04 conference panelist on the subject of IP video consumer devices. "The possibility of gaining an additional $60 per month in revenue, while becoming less likely to lose $30 a month to your competition, is an important factor in the business case."

Fellow consumer device panelist Craig Bender, vice president of marketing and corporate development for Tut Systems Inc., says IP video is proven.
"Look at the number of customers," he says. "We're talking about take rates of 50 percent of market share after just a few years." TELECOM '04's IP video mini-track, which requires an additional registration fee, will drill down to a granular level on the subject. Carriers must have the network ready to support packet video, the last mile must able to carry high amounts of bandwidth, the right devices need to gain uptake in customers' homes and telcos must have decent, attractive content to deliver. Not to mention, there are surrounding regulatory concerns, the need to create more than a "me-too" television offering, business model challenges and the potential for advertising revenue to consider.
 
As an example of the detail attendees can expect, a session on network bandwidth require- ments will address the need for intelligence in the network, so it can identify different types of traffic and how applications need to interact with the infrastructure.
The panelists also will take a look at the market effects of HDTV, VoD, VoIP and wireless technology on network requirements.
Meanwhile, fiber-to-the-home and surrounding regulatory, technical and market viewpoints will be tackled by another panel TELECOM '04 also will host a session on regulation and how the landscape shifts with the addition of video distribution business -- uncharted territory for many telcos.

Meanwhile, the session on consumer devices will address the thorny question of which interface users are likely to prefer -- television, computer monitor or something else entirely, and will discuss the possible evolution to an all-in-one telephone/computing/television device, set-top box-enabled or not.
 
"The issue to solve ... is what technologies are available and what will work best for the network to meet the TV needs of potential subscribers," says panelist Abraham. Once the technology pieces are in place, what about the content? Are carriers ready to become media companies? John Pezzini, vice president of the Western region for Magrack and Independent Film Channel will join Sean Riley, senior vice president of affiliate sales for Fox Cable Networks, and Richard Jones, programming director for Verizon Broadband Solutions, to talk about this issue, a primary focus in the conference.
Consumers used to receiving hundreds of cable channels expect a certain level of quality from a broadcast provider. The panel will talk about on-demand versus pre-programmed broadcast approaches, the delivery of content via Internet portal and how to go about securing content deals.

Broadcast advertising is another new frontier for phone companies. A panel will explore how a telco entering the video business can break into this market, including the importance of existing community relationships in securing advertising deals. Differentiation is another core focus of the track. Tut Systems' Bender says value-added video services such as VoD could become an important value-add as a differentiator vis a vis cable. "Customers are taking local content feeds and storing them," he says. "Then the carrier offers it as free video-on-demand local content."

Marty Lafferty, CEO at the Distributed Computing Industry Association and Gabe Zichermann, vice president of strategy and communications at Trymedia, will discuss gaming as a differentiator for telcos. Games are an important part of the content pie, with online community gaming experiencing double-digit growth year-after-year.

VoIP integration with IP video seems a natural evolution to richer, more robust interactive consumer services that could set telcos apart from their cableco competition. Scott Keagy, director of VoIP solutions marketing at Calix and Bryan Martin, chairman and CEO at Packet 8 will talk about how VoIP fits into the picture.

"Although video applications have been deployed in niche environments today, market drivers are creating the need for new video services," says Danny Klein, senior analyst with The Yankee Group. Despite the fact that IP video is not just another communications service, telcos have the opportunity to get in on the ground floor of an important new market.