According to recent research entitled “From Gorillas to Guerrillas, IPTV Changes Everything,” IPTV is a “game changer” and will fundamentally change the video subscription business and the telcos who provide it. Among the report’s many predictions is the view that IPTV will change the culture of telcos. “The phone company of the past–the 800-pound gorilla–is dead,” says the report. In order to effectively compete with cable on a local level, telcos will have to abandon their long practiced centralized management structure, and shift decision making to the local and neighborhood level. Other interesting predictions include:

  • IPTV will create micro-markets of intense local competition in the United States, balanced by large swaths of the nation unaffected by the new technology
  • IPTV will change the way applications are developed for television
  • IPTV will force the cable companies to evolve into more dynamic and responsive organizations
  • IPTV will open one of the last vestiges of the closed, legacy telco and cable service environment

Yankee predicts 9.8 million IPTV subscribers by 2011, representing about a 9.6% penetration nationwide. But Yankee also says you must look a little more closely at the penetration numbers. They postulate that telcos are shrewdly targeting high value/ARPU customers with IPTV – homeowners with good credit who are less likely to move, and more likely to subscribe to a triple play bundle. They peg that number of households to 34 million, of which IPTV will actually have a 29% penetration by 2011, creating some real pain for their cable and DBS competitors. They identify micro markets of hyper competition where telcos and cable companies will profusely battle it out on a local, and even neighborhood level, to gain the business of those 34 million high value customers.

Advertisement

Yankee also sees bandwidth and middleware as the defining factors that will differentiate IPTV from cable. Their thinking suggests that the larger the pipe into the home and the more control on middleware development, the better. They point to early success that Verizon is having utilizing as a competitive weapon (unless of course, you’re ), particularly using faster Internet speeds as a differentiator over cable. Differentiation powered by middleware applications has been slower to arrive, but Yankee predicts that IPTV will eventually have some inherent advantages over its cable competitors, particularly with interactivity and introducing social networking capabilities into the entertainment experience. The report is well worth a look.

Join the Conversation

3 thoughts on “IPTV Will Irrevocably Change Pay TV, Telcos

  1. We launched IPTV last year and I can relate to the change talked about in this article. It really has transformed our company, mostly for the good, but with some bad too. TV is a different game, and adjusting our company to the technology and the customers makes you change. Some people are ok with that change and others have a real tough time with it. Overall, its been fun, but you gotta be able to roll with the punches!

  2. What’s so special about IPTV? I mean really, does it do something that cable companies can’t do? The issue is not the technology, its whether cable can adapt and move quick enough to meet the challenge. But whether that challenge is IPTV or something else really doesn’t matter.

  3. IPTV will enable the convergence of Web 2.0 platform with Video. Services that adapt the never-ending web content (in the form of photo-sharing, over-the-top videos, news feeds) to the Television set, for the lean-back internet will become pervasive. Of course, the key is not to replicate the PC experience BUT to adapt the Web 2.0 experience to the TV/Video. IPTV middlewares will enable that!

Leave a Reply

Your email address will not be published. Required fields are marked *

Don’t Miss Any of Our Content

What’s happening with broadband and why is it important? Find out by subscribing to Telecompetitor’s newsletter today.

You have Successfully Subscribed!