Internet TV vs IPTV...same but different

 

The development of IP (Internet Protocol) based video, in any of its forms, has meant that traditional players in the television industry have been broadening their outlook to move with the times. In addition to there being a new player in the TV platform space alongside cable, satellite and terrestrial services - IPTV (aka Telco TV) - there has also been huge growth in Internet TV services (aka Web TV), thanks to increasing broadband speeds and improved streaming technologies.

Collectively the impact of IP based video on the future of TV - regardless of type - is going to be huge, with the effects already being felt. But what are the key differences between IPTV and Internet TV that exist and impact how you should be dealing with these emerging services?

Technical differences exist...
There are detailed technical differences between IPTV and Internet TV - many too complex to cover for the purposes of this piece - and distinctions are becoming even harder to make as the operators launching services combine and develop different technologies to serve specific situations. IPTV can probably be best compared to Digital Cable, with operators running a fully managed platform over a closed network with a limited reach. Operators are then managing these services in the same way as TV platforms have always been managed - by providing a Quality of Service (QOS) through network management, bandwidth provisioning, routing management, failover paths and a variety of other QOS practices.

Some of the key technical characteristics of an IPTV platform include:

• Broadcast channels, when provided over IP (rather than hybrid DTT), are streamed using multicast technologies.
• Operators run extensive QOS practices, managing the delivery of video to the consumer with minimal interruptions.
• Digital Rights Management (DRM) is standard, with operators providing high levels of video asset management and encryption.
• Delivery of content is device specific. This used to mean STBs but it's important to note that PCs are not excluded from true IPTV delivery as they can operate in the same way as a STB.
• Provisioning, billing and customer service methods are the same as traditional TV platforms.

Internet TV, however, relies on a much more open model by streaming content over the public internet and is available to the widest audience possible. Key characteristics can include:

• Delivery of video can be encrypted, and DRM can be used, but is not always adopted.
• Networks are not fully managed and there is no end-to-end bandwidth provisioning as operators cannot control the networks - as a result QOS is limited, but we are seeing development with some services.
• Channels are streamed using unicast technologies with peer-to-peer technologies also being used in some cases.
• Customer service is largely online and customer management is much less developed.

Even simplifying the technology debate creates problems, as operators introduce new methods of delivery and start to employ more efficient and varied methods of delivery (and devices). As approaches vary so do interpretations - which doesn't make it easy for rights lawyers!

Propositions vary...
So, perhaps a good thing to do is to also look at how the fundamental propositions of Internet TV and IPTV differ...

Whilst many see Internet TV as the great enabler of long tail economics - finding a way of addressing all the niches of the world - it is slowly becoming more mainstream. That said, it is a more personal experience than traditional TV (and IPTV) and is predominantly accessed alone, sitting by the PC.

Using the PC as the main viewing screen for these services means that users are often at work, can be multi-tasking, or looking for some quick entertainment to break from what they are doing. Propositions are often made up of shorter form content where users are interested in smaller clips; however we are starting to see some changes in this as longer form content is beginning to increase on the web. For example, Hulu's proposition is based on movies and TV series - as is the case with Channel 4's 4oD service, the BBC's iPlayer and Proseibensat1's Maxdome service. TV channels (e.g. ITV in the UK), traditional TV platforms (e.g. Sky) and new entrants (e.g. Zattoo) are also beginning to simulcast broadcast channels.   However, this doesn't necessarily change the state of mind of the user, and time will tell whether long form content truly works as well as short form. Even when it is long form the user's mentality is still predominantly that of snacking, catching-up and using the PC as a secondary method of video viewing.

As a result consumers are less concerned with the viewing quality of content delivered by Internet TV services. But this can in turn means that they are less inclined to pay and propositions are often built around ad-supported content such as Babelgum, 4OD, Hulu and Zatoo. Services with premium paid for content propositions often rely on download functionality to ensure a TV quality viewing experience - e.g. LoveFilm.

Internet TV is still in its relatively young stages (at least compared to traditional TV) so we are seeing a variety of propositions being tested - Short Vs. Long form content; Streaming Vs. Download; Pay Per View Vs. Subscription Vs. Free Ad-supported. Time will tell which proposition emerges as the strongest - but they will all co-exist in some way - and by understanding your target audience you can build the proposition that works for them. Many of the Internet TV services are recognising the need to get on to the TV and become more central to the user's experience. We are seeing the launch of hardware devices that are enabling this (such as Apple TV and gaming consoles) but operators in the Internet TV space also cross-over into IPTV in order to secure the all important service offering on the primary TV set in the home.

When it comes to IPTV you are certainly dealing with a proposition that is more in tune with traditional TV (cable and DTH). IPTV also has the advantage of being more flexible in terms of development so that it can enhance and expand its TV platform - especially with interactive services. However, the reality is that it is fundamentally a household product, allowing (but not limiting it to) communal viewing via what may be the primary TV set in the home. It should be offering the same quality of experience the consumer is used to and be offering propositions that are built to compete with existing DTH and cable services.   We are seeing operators use a variety of packaging options:

• Tiered packages - e.g. TP (Orange), Poland
• Thematic packages - e.g. O2 Czech
• Tiered and thematic packages - e.g. Orange TV, France
• A la carte options - e.g. Now Broadband, Hong Kong

IPTV propositions are built around both linear broadcast channels, Video on Demand (VOD) and Subscription VOD (SVOD). IPTV, as is the case with cable, can use VOD to help differentiate themselves and compete with DTH so we have seen extensive VOD development. VOD is starting to become central to IPTV operators' propositions and they are using it to lead their marketing messages and drive uptake to higher tiers (often by bundling VOD and SVOD with these packages).

But what does this all mean?
So, there are key differences that exist between IPTV and Internet TV - whether it be technical differences, delivery device (STB or PC) or the proposition. Both types of TV service are still young compared to cable and DTH. Internet TV may need to develop and prove its ability to get on to the main TV set in the home. But it is making strong headway and we are seeing more and more launches of compelling Internet TV services. IPTV is also making its mark on the Pay TV industry with launches happening across Europe. Announcements such as Orange TV's (France) recent deal with Warner Bros. and HBO for first run movies and series indicates that IPTV operators mean business and will become serious content players.

To sum up, the key issue emerging again is that we are moving further into the multi-platform era and all TV players (TV channels, Pay TV operators, Content providers, Internet TV service operators) should take note and embrace these times by developing unique multi-platform strategies.

Source: 3vision