LAS VEGAS – In kicking off the session this morning on IPTV, PricewaterhouseCoopers’ Asia Pacific head Marcel Fenez outlined the changes in his city, Hong Kong, with the introduction of a serious IPTV player.
There are seven million people in the city and 130% wireless penetration. Broadband penetration is 60% and five years ago, cable had 100% of the video market, he said.
Three years ago, however, one of the five fixed line telcos, PCCW launched an IPTV service with 23 channels.
It now has over 700,000 customers (one of whom is Fenez) and 120 channels. "It’s the largest IPTV operation in the world," he said, noting its rapid ascent in just three years, "The cable operator is definitely retreating," he added.
While that may be a market which has a good grasp of what IPTV is, the acronym is troublesome in North America, said Microsoft TV media services director Shari Barnett. Some think IPTV is just another word Internet video, like YouTube.
For Microsoft, "we define IPTV as TV over a closed, managed network, but (the term) is also used to describe Internet video so it’s very confusing for consumers and those in the industry," added Barnett.
But it’s got to be more than just cable TV on a different wire and two European operators on the panel said their service is just that, Spain’s Telefonica’s IPTV offers 120 TV channels along with dozens of interactive services like shopping, video on demand, banking and video conferencing, said Antonia Otero, the company’s vice-president, innovation.
"Twenty percent of our IPTV clients are paying for at least one interactive service," each month on top of their regular bill, she said, and 34% of the customer base buy three movies per month.
Bart Becks, CEO of Belgacom Skynet oversaw the launch of the company’s IPTV service, Belgacom TV. Subscriber success came to his former employer when the company secured the exclusive rights to local professional soccer. "If people wanted live football," they had to come to Skynet. Its IPTV service passed 10% penetration in the country in a year.
(Of course, it’s a different way of doing business in Canada but imagine Telus’ IPTV service having the rights to all Edmonton Oilers, Calgary Flames and Vancouver Canucks games. They wouldn’t have the capacity to sign up the avalanche of subscribers.)
What will truly separate IPTV from cable and satellite, said the panel, is the ability for customers to take their entertainment with them – so that their TV signal and interactivity can be accessed on their PCs and cell phones.
"IPTV is a different business model," said France-based Benoit Joly, IPTV and mobile marketing director for Thomson. "First it is broadcast TV delivery, and then all the IPTV interactive capabilities come after,"
The challenge for IPTV is to be great right away and to be easy right away. "IPTV is a customer service challenge," said Joly.
"First, the technology has to work flawlessly," added Becks. "Soccer got us churn, but you have to have also all of the popular content," as well as PVR and VOD options. "You need all the major broadcasters on the platform," he added, noting that Belgacom was missing the fourth most popular broadcaster (which didn’t sign on because it feared the PVR) and it hurt "because customers couldn’t get all the hits," he explained.
"All the elements of a great customer experience must be there because if you give them a chance to walk away, they will walk away."
And because consumers are individually addressed, each with their own IP address, there exists opportunities for targeted ads via IPTV. While there will be dramatically fewer eyeballs for IPTV providers, the quality of the ad hit, if targeted, can be higher.
Barnett said Microsoft, which will power Bell Canada’s terrestrial IPTV service when it launches, rumored in the second half 2007, is still writing its software for that but it intends to allow the system to send ads regionally, even to specific zip codes. Microsoft wants to enable ad targeting to specific consumers, but "without creeping them out."
"We can do it now," said Joly, but how are the individual customers profiled in the carriers’ database? If the profile is light, or wrong, a targeted ad campaign can backfire,
"Something more is possible," said Becks, referencing the relationship between the advertiser and consumer. "Targeted advertisement will add a lot of value.
Greg O’Brien is editor and publisher of Cartt.ca and is covering NATPE in Las Vegas.
