Recent days have seen a flurry of new launches for video services by both AT&T and Verizon. Markets like Jacksonville, Florida, South Bend, Indiana, and Hampton, Virginia are all now able to receive video from the local phone company in addition to cable and DBS options. And it’s not just the large players either. Smaller telcos across the U.S. continue to launch IPTV services. Avail Media, an aggregator of content and IPTV solutions for smaller telcos, announced 20 new affiliates this week. The competitive posturing continues as well, with all kinds of promotions being offered to entice people to switch services. I live in the D.C. area and noticed a commercial from Comcast the other day promoting free DVR for a year – a direct response to Verizon FiOS’ ongoing free multi-room DVR promotion. The ongoing battle lines seem to be intensifying. Should be fun to watch.

Avail Media announced the launch of 20 new affiliates for their IPTV linear content solution. In a company statement, Avail said “…these affiliates add to Avail Media's 35 video on demand affiliates that are already live in market and represent just a fraction of the 94 customers with whom Avail Media has secured deals to provide linear and/or video on demand services.” The new affiliates are located across 14 states.

Hitachi announced that they will partner with Falcon/IP Complete for a fully integrated MPEG-4 IPTV solution for service providers who are implementing Hitachi's AMN1220 Gigabit Passive Optical Network Fiber to the Premises solution. "We are pleased to partner with Falcon IP/Complete as part of our Source-to-Subscriber initiative," Said Rick Schiavinato, Hitachi Telecom vice president, sales and marketing said in a company statement. Hitachi and Falcon will target municipalities, master planned communities and telcos with the combined offering.

We keep seeing snippets of the future of entertainment. Verizon announced one, with their NFL Network Game Extra service, now being provided to Verizon video and wireline broadband subscribers. Viewers of the service are given a “virtual control booth” enabling them to watch live, online broadcasts of NFL Network preseason and Thursday Night Football games while selecting from multiple camera feeds. Subscribers will have access to alternate camera angles and live audio feeds and have the ability to view one of four camera angles on demand, or all four angles simultaneously. Other features include:

• live online chats with other NFL Network Game Extra viewers during the live games
• game statistics, highlights and drive-chart simulations during the games
• on-demand video highlights of the games
• special events, such as college bowl games and college all-star games including the Insight Bowl, Texas Bowl and Senior Bowl

Unfortunately, the service is limited to the pre-season and is only viewable on-line through their broadband connection. The optimist in me hopes it’s a start of what will eventually become standard television viewing. I remember first learning about IPTV back in the late 90’s, and the idea of viewers being able to control multiple camera angles of sporting events was always cited as a forthcoming feature that will offer competitive differentiation. While this Verizon illustration isn’t quite that vision yet, it appears to be heading that way. I recognize that this vision is not unique to IPTV. Verizon isn’t a true IPTV player to begin with, and DirecTV has been experimenting with similar features for some time. But it is illustrative of the potential of entertainment and broadband convergence features. Features that all video and multi-play service providers will need to understand and leverage to the best of their ability.

AT&T released their latest quarterly numbers, revealing the progress of U-Verse and their other business lines. Depending on your point of view, U-Verse is either progressing nicely or is woefully inadequate. AT&T’s PR spin indicates the former, but the real view is only available to AT&T insiders, analysts, and the “flies on the boardroom wall.” If you place U-Verse’s video subscriber additions (170K net adds for 2Q08) in the context of its cable competitors progress in taking voice lines (Comcast has averaged 646K net phone adds the past three quarters), you walk away very underwhelmed. Even if AT&T hits its target of 1 million video subs by the end of the year, it still pales in comparison to the momentum of cable taking voice subscribers. But if you subscribe to the opinion that voice lines are becoming less and less important in today’s world of wireless and broadband, than any video progress for AT&T could conceivably be considered “gravy.” That opinion suggests that massive numbers of wireline customers are going to give up traditional voice service anyway, so if I can continue to replace that fleeting revenue with a triple play of broadband, video, and wireless, maybe I’m all the better for the future.

Time will tell whether the billions of dollars of U-Verse investment will ultimately be worth it. The reality for AT&T is they didn’t really have a choice. Their traditional cash cow, local access lines, is dying on the vine because of wireless substitution and IP voice competition. They are executing quite well on their wireless strategy (at least from a quarterly financials point of view), which is the ultimate equalizer for declining access line counts. Consider that in 2Q08, AT&T added 1.3 million net new wireless subscribers and lost 1.5 million switched access lines, and you can begin to accept the “writing is on the wall” cliché. U-Verse will play an ever increasing role in AT&T’s evolving future, ensuring those local access loops still have a reason to exist and still generate a healthy revenue stream. But before they get too ahead of themselves with glorious quarterly reports that toot more horns than a steam locomotive, they would do well to prepare for a more level future competitive playing field. A more intense competitive picture will emerge when and if their cable competitors gain a wireless opportunity of their own. Who ultimately wins in that scenario?

AT&T announced the launch of its integrated U-verse bundle, which includes AT&T U-verse TV, AT&T U-verse High Speed Internet and AT&T U-verse Voice in Tulsa, OK. The service will also be available in Jenks and Owasso, OK. AT&T will make U-verse services available to more homes throughout the area on an ongoing basis.

GTA TeleGuam announced the pending launch of IPTV service, which will compete with the local cable company. GTA TeleGuam is utilizing CSI Digital and the Avail Media IPTV platform to bring digital TV services to its footprint. The service is scheduled to launch in June 2008. The launch is expected to include VOD and HDTV services.

AT&T is making another assault on the “me too” scenario faced by telcoTV providers in the U.S. TelcoTV providers are constantly trying to create some differentiation between their video service and that of their cable and DBS competitors. Otherwise, all you have is a “me too” video service, with very little distinction from what’s already available in the marketplace. With that in mind, AT&T announced the launch of AT&T Online Photos from Flickr, which allows the viewing of Flickr based photos and slideshows on the AT&T U-verse platform.

According to AT&T, they are “the only video service provider to offer an integrated online photos channel... at no extra charge." The photo service channel is located on channel 91 of U-verse’s channel line-up. AT&T also offers a variety of other differentiating applications, including AT&T U-bar, which provides customizable weather, stock, sports and traffic information; YELLOWPAGES.COM TV, which lets customers search for local businesses and other information via their TV screen; and AT&T Yahoo! Games. Of course AT&T is not alone with this strategy. DirecTV has offered differentiated programming offers with interesting applications, particularly with sports programming. Their NFL Sunday Ticket and NASCAR Hot Pass programming and feature packages create considerable differentiation, and thus competitive advantage with select audiences. Cable has their fair share of differentiation attempts as well. It all adds up to an interesting experiment in trying to create the right mix of features/applications, pricing, and customer service that creates a compelling experience. The right experience drives positive retention, expanding growth, and growing ARPU – a winning proposition for any competitor.

Avail Media and Motorola announced a partnership to integrate Avail’s content transport solution and Motorola’s MWAVE IPTV portfolio. MWAVE provides set-tops, encoders, systems integration services, and program management for video hub office components, including third-party middleware and digital rights management. MWAVE will integrate with Avail’s Avail Connect to create a “hosted” head-end solution. Servicoe providers can also utilize these services to build their own head end.

The march to video distribution over the Internet that rivals traditional subscription pay television continues. TiVo announced an agreement with YouTube that will bring YouTube content directly to the television through a TiVo DVR Series 3 set-top-box or better. In addition to viewing YouTube content, YouTube users will also be able to log on to their account through a TiVo box. The YouTube agreement expands TiVo’s Internet video content strategy, which also includes Amazon Unbox movie downloads and a variety of other content from various sources. TiVo is trying to position its solution as a gateway to web based content, in addition to a leading DVR solution for traditional linear television content. “Being able to make available YouTube videos to the TiVo subscriber base using one device, one remote and one user interface is another major step in our commitment to combine all of your television and web video viewing options in one easy to use service,” said Tara Maitra, Vice President and GM of Content Services at TiVo Inc.

One trend that is worth observing over the coming months and years is applying the “cut the chord” mentality to cable or IPTV services, where consumers decide they don’t need cable anymore because web distributed content is enough. As more and more compelling web based content makes it to the TV in acceptable formats and viewing experiences, many consumers will surely decide that their monthly video subscription bill may not be worth it. It’s definitely having an impact on the roll out of IPTV. I’ve personally spoken with several telephone company executives who have decided to stand on the sideline and observe these trends a little more closely before deciding to pull the trigger on IPTV and triple play. This is a complicated issue, and a variety of factors come into play that will impact these decisions, including HDTV availability, sports programming, etc. It's hard to imagine Internet video distribution completely replacing the subscription pay TV model. But it is pretty clear that any converged entertainment strategy needs to address web based video. In my humble opinion, “the genie is out of the bottle” with web based video and service providers and the vendors who serve them need to find a way to weave web video options into their entertainment packages. The experience that ultimately wins will probably offer a compelling mix of both traditional and Internet delivered content. At least until the day when it will be impossible to tell the difference. That day is coming too, we just don't know how far off it is. Any guesses?