Telecompetitor Arches

IPTV Will Irrevocably Change Pay TV, Telcos

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.

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.

SIMILAR STORIES

Cruise Ship
AT&T and WMS Announce a Plan for Simplified Connectivity on the Water
Learn more about this post
Satellite
AST SpaceMobile and AT&T Get FCC OK to Test Direct-to-Satellite Cellular on FirstNet
Learn more about this post
Wi-Fi Router
AT&T, Karrier One Sign Wi-Fi Offload Deal
Learn more about this post