IPTV is dead - long live broadcast

IPTV whether that is VoD, download or live, has moved slowly forward over the past few years. The jungle drums have changed from beating out a multitude of predictions to a constant rhythm of new service launches.


Some initiatives have the seeds of commercial viability, others you know are much shakier. Almost none of these new services are commissioning content. Those that are, are not exactly mainstream and usually rely on a enthusiast and volunteers. Other “unique” or “original” content is UGC. So the vast majority of commercially viable services are reliant on content that has been created for and funded for, by more traditional platform such as cinema DVD/BD and TV broadcast. Therefore they are relying on the, much talked about, “long tail” value of content, or at best trying to extract just a little more value out of content at some stage in its life cycle.


The first thing against IPTV is, Internet/PC is not the place to watch quality content if you want to see it first. It will have been on another platform first. That is where the premium revenues will come from.


The second thing against IPTV is the picture quality is lagging behind other delivery mechanisms. 2Mb/s is arguably just about sufficient for a SD TV picture, 5 Mb/s is DVD quality and a 1080p HD feed that matches Blu-ray quality is 40Mb/s.


So here I am (as a consumer) with my nice large (and expensive) 1080p screen watching HD cable, DTH or DTV channel. For the latest films I have the choice of the cinema or the rental and purchase of a Blu-ray. Why am going to watch IPTV? Even if it doesn’t keep buffering, I am unlikely to get anything close to the same picture quality without downloading to some storage devices in my house. Wait a minute isn't that a DVR?  Oh no it yet another box I've got to but and wire in and balance on the stack of Set Top Boxes.


I will sacrifice picture quality for something I may have missed. Better to see it in a poorer quality than not at all. Services such as iPlayer are undoubtedly a new facet to the growing arsenal of my TV entertainment options, alongside DVR’s, and games consuls. 


I may also sacrifice picture quality to see something unique, niche or exclusive but this is unlikely to be the way that most people consume most TV content most of the time. Even if broadband bandwidths are larger and all you can eat, there is a large number of things that have to come together to make it work for the consumer.


Virgin and Sky, providing pay TV services with multiple channels, are also providing broadband. Virgin in particular provides some of the highest broadband connection speeds available in the UK at the moment. As bandwidth increases their users could opt to drop the pay TV bouquet for OTT IPTV. As Virgin and Sky provide larger broadband they could be undermining their own business. Are the stupid? No. They know that whatever you get via IPTV that is free will be old (to at least some degree), will be inferior or a niche that they do not service anyway.


The big success of IPTV in the UK is the BBC iPlayer. There also exists the ITV player and 4oD. All three share the same fact that they are free to the consumer. Most (if not all) content consumption to date has been to a computer of some sort. Presumably this tech savvy audience knows how to access all three yet the iPlayer is by far the largest of all the IPTV options in the UK put together (with the exception of YouTube). 


If we assume that the content is comparable, then why the disparity in take up? The most obvious difference is the lack of adverts on iPlayer. The second difference is the range of content across the four BBC TV channels and the umpteen BBC Radio channels. This makes the iPlayer a comfortable and resourceful destination for content. Watching iPlayer is like watching a DVR, watching ITV player and 4oD is not, as I can’t skip the ads. I also have only the content of one channel to select from. (ITV and Channel 4 do not offer a variety from their main output).


IPTV is a cleaver technology but just because you can do something doesn’t mean you will. The real challenge is to deliver something the customer wants, something they may not yet know they want, but like so many people that have a DVR will tell you “I wouldn’t do without it now”. The thing to note is that the mass adoption of DVR's hasn't really happened yet. Most people have them as part of their DTH or Cable package. But Freeview/Freesat customers have not taken to them on mass yet. The industry is looking for the next revolution when this one hasn't happened yet.