The news of the pending shut down of IP Prime has produced all kinds of commentary about the viability of IPTV, especially for smaller telecom carriers. It’s understandable – questions will be raised anytime a high profile project like IP Prime shuts down, especially in the dramatic way that it did. But before we draw any conclusions from this development, I think we need to put it in a little more context.
First and foremost, we have to recognize the scale of IPTV. From both a technology and corporate culture perspective, IPTV represents arguably the largest transformational development in the history of most telecom carriers. Undertaking it is unlike anything most telephone companies have ever done. It cannot be viewed with short term binoculars. It must be viewed with patient, long term focus. If there is anything I don’t understand about SES’s decision, it’s their apparent short term view. While they have been planning IP Prime for several years, it has only been commercially available for at best, two. In my view, by pulling the plug now, they made a very short term, maybe even rash, decision.
SES has/had some smart people working on IP Prime. They had to know going in that it would take more time before expected returns could materialize. Perhaps there’s something else going on here that we’re not privy to. Maybe a tactical move against a business partner or two. Or perhaps my initial reaction rings true – realization by SES that IPTV systems integration is a core competency that they simply don’t possess – better to cut losses now than dig an even deeper hole. Whatever the case, I think it would be wrong to draw conclusions about the wholesale IPTV business model, or the overall IPTV market in North America.
I’ll be the first to admit that this market is not without its challenges – both technical and market. There is much work to be done on all sides to get it where it needs to be. IPTV vendors need to do a better job in ensuring the technology works and their products interoperate with others. Fewer press releases touting glorious new advanced features and more tried and proven field tests in real market conditions for the core video service is probably warranted. Some smaller service providers probably could use some fine tuning of their marketing DNA. Relying on local presence, good reputation, and a bill stuffer or two is not going to be enough to move the video needle in some markets. More aggressive marketing and sales tactics which may cause some companies to get outside of their comfort zone may be warranted.
As the title of this post suggests, we’re in the very early stages of a marathon with IPTV. Some recent business decisions and market commentary approach this issue as if it were a sprint. Is IPTV as we know it today the answer for every company? Absolutely not. Individual market conditions should dictate service provider IPTV strategy. But I think we all can agree that service providers of all sizes will need robust broadband networks that enable the delivery of content and entertainment experiences to the end user. The end goal for all is to leverage that experience for more meaningful and deeper customer relationships, which ultimately leads to better margins and profits. IPTV can play a role in achieving that goal. But it’s a long term prospect and service providers have to be okay with recognizing that future IPTV iterations may look very different than present day realities. Flexibility, both technically and financially is key. I’m not a marathon runner, but I’ve heard that one winning strategy entails always keeping the finish line in mind. You’re not exactly sure how you’re going to get there, but if you plan on getting there, you better be prepared to overcome a myriad of challenges. There will be good stretches and bad ones, but that’s why they call it a marathon, not a sprint.