The huge potential of IPTV

IPTV has great potential

By Stephanie Dell

5:33 PM, June 5, 2006, Chicago —— In the next five years, television will change more than it has in the last fifty. According to Christine Heckart, General Manager of Microsoft TV Marketing, during her keynote at today's lunchtime Telephony IP Advanced Conference call, IPTV will dominate global communications in 2006.

Heckart said that television today is still not connected, and there hasn't been much innovation beyond the digital TV revolution. However, IP will completely transform the traditional TV user experience, just as it radically changed how people use personal computers.

"We have become an on-demand world, but TV hasn't kept up," Heckart said, citing the Live 8 concerts which were broadcast live globally last July. More people watched those performances on their PCs than on their TVs.

Although many in the telecommunications industry view TV as a dying or stagnant technology, Heckart believes that telecom operators can help TV continue to evolve and even profit from it, without resorting to price wars. A Microsoft survey shows that if telecom operators enter this space competitively, they could capture 13% of the market share. Moreover, they could stimulate the entire TV market by increasing IPTV prices — generating an average revenue of $35 per person annually. Heckart also stated that surveys indicate service providers could secure a 20% profit margin. They could maintain an ARPU of approximately $60 per TV viewer annually, similar to what telecom companies did ten years ago, if they focus on providing more feature-rich services rather than engaging in price wars.

There are three rules of the game in the IPTV market.

The first rule is that telecom companies must realize that allowing IPTV to reach its full potential requires thinking big. They need to protect their communities, businesses, and insights, making multiple applications immediately usable for people.

The second rule is to start small, extract the essence, and keep the network up-to-date to support the technology. "We start small so we can innovate," Heckart said. "This is the year to lay the foundation."

The third rule is to move quickly, gain insight, and change the game. "You must be able to let the industry try and taste failure," Heckart said. Only in this way can the industry see what works.

Finally, Heckart said telecom companies must never underestimate IPTV because it can either make or break them. "It will be an unprecedented interactive TV user experience."

Translated by sirtoozee (www.akomedia.com)