Internet Protocol TV/Broadband TV

Video on Demand, IPTV, Digital Video Recorders and Download services alter the media landscape in dramatic and overlapping ways.

There are technical debates about the precise definition of IPTV, whether the term implies a closed network or can refer to the Net at large. If you're curious, contact us and we'll refer you to info on the distinction. For now, we're referring to IPTV as a generic term for Broadband television experiencees. That is, television via Internet, rather than from cable, satellite or terrestrial signal. It's likely to be the most transformative of these technologies.

To understand the great promise (or threat, depending where you sit) of IPTV, use VoIP (Voice over IP) as an analogy. For years, VoIP was discussed as a telco killer. If people could make phone calls via the web for pennies on the dollar, the bottom lines of telcos would plummet. While this hasn’t happened, the recent purchase of Skype by EBay for $4 Billion bears out the beginning of something. Similarly, let’s consider the following future scenarios:

1. As home bandwidth increases, consumers are able to get high-quality video signals from the networks via IP for less than they pay for cable or satellite;

2. Consumers are able to get traditional PPV (Pay Per View) via IP for much less than via cable or satellite;

3. On the heels on 1 and 2, networks begin to use IPTV as an alternate distribution channel for their stuff, driving salt into the wounds of cable and satellite providers. The leverage of content providers relative to MSOs in this case increases directly with the success of IPTV.

But it doesn’t stop there.

Suppose the latter-day David Chase we discussed in VOD pitches his pilot to the networks. Suppose they pass (imagine that). Now suppose he throws his pilot up as user-generated content, via You Tube or similar – and an audience develops. So he begins shooting his show and distributes it via the Net. Now we’ve bypassed not just service providers (e.g. Comcast and DIRECTV) but the television networks as well.

The first hit from IPTV will be a very big deal indeed. And it will happen.

Downside: As Mark Cuban famously noted regarding download services, the reality check for IP-delivered media is bandwidth. A standard DSL connection, at 1.5 mb/s or so, does not deliver a TV-quality experience for long-form content. It may get early adopters a nice 60 minute show for their iPod or desktop- but that’s still not TV. At least not yet.