1. IPTV IPTV: Coming Up To The Boil? I CW 12

2. IPTV Its evident that not all of theDirect Investment (FDI) cap resulting business lessons learned in Western practitioners in the nascent IPTV from provision of IPTV services both by Europe, carriers and service providers service provider industry are there telecom licensees and CATV operators. will take advantage of the industrys by choice: the need to matchaccumulated expertise and skip efforts and/or exceed and/or differ-Earlier, on 28th of December, the South to modernise legacy equipment or infra- entiate product portfolios from Korean National Assembly approved a structures suitable for IPTV delivery. those of increasingly numerousbill that would allow service providers and aggressive competitors liter- such as Korea Telekom, LG Dacom and Theres some consensus, though, that ally drives many service providersHanaro Telecom to provide IPTV serv-Western Europe will be in the vanguard into the embrace of IPTV. Itsices. Previously, these companies could of IPTV adoption. "Europe will remain also apparent that successfully only deliver video on demand (VoD), and the number one IPTV market in terms of designing, deploying and oper-could not deliver terrestrial TV program- subscriber count through 2011, but Asia ating IPTV networks and prod- ming until after it was broadcast byis catching up quickly and will most likely ucts is no slam dunk. Meantime, terrestrial broadcasters. This restrictionsurpass Europe in 2012-2013, calculates issues such as the business caseis now lifted.Len Feldman, director of IPTV Analysis for large scale IPTV deployment,for MRG. In North America, Verizon and and the likely levels of ROI to beIndia and Korea are two markets identi- AT&T are growing considerably faster delivered, remain the subject offied as having considerable potential for than we previously forecasted, and we vigorous debate. But even withcommercial IPTV success in the analysis expect Verizon to be the world's largest these and related caveats, thereIPTV Global Forecast ReportOctoberIPTV service provider in 2011." is no doubting that positive senti- 2007 published by Multimedia Research ment for IPTV is increasing rapidly Group (MRG). So too does China.The numbers game: as 2008 unfolds. Regulators insystem sales, subscribers more and more geographies are Agreeing with MRG about China isand service revenues sanctioning the commercialisation Informa Telecoms & Media. In that of the service, or removing imped-companys new report IPTV: A GlobalAs more regulators around the world iments to its greater availability. Analysis (3rd edition) China is expected okay the provision of IPTV services, Forecasts both of network and to be the leading IPTV market bymore operators are moving ahead with CPE investments and subscribersubscribers, with 6.6 million homes ambitious head-end, network, middle- uptake are being revised upwards. having it as their primary TV service byware and CPE investment strategies. And, in the background, mile- the end of 2012. The Beijing Olympics Telcos look to be especially big IPTV stones in the all-important IPTVare widely expected to have a positivespenders. Thus, for example, a recent standardisation process are being effect on IPTV service uptake in Chinainvestigation by the In-Stat research passed. itself and further afield. The Beijing house found that the telco TV market 2008 Olympic Games will be the domi-was quickly adding new deploymentsRocking all over the nant driver for IPTV expansion andand subscribers, which was boostingworld (almost) adoption across China, calculates Ervinhead-end equipment sales as each Leibovici, ceo of BitBand, a specialist indeployment requires at least one head- Sector regulators and legislators in many content delivery solutions for broadbandend; growth in the ranks of subscribers countries have now given the green lightIP networks. Beijings efforts to leverage means more revenue from licence, to IPTV service provision. Two of the this event for the world stage, coupled service, and support fees for vendors of latest markets to accord the service thewith the desire of service providersmiddleware, content protection and on- thumbs up are India and South Korea.across the globe to deliver Olympic demand platforms. events to subscribers in all forms and on On January 4th this year the Telecomall devices will prompt service innova- As more head-ends are built, the market Regulatory Authority of India (TRAI)tion, technology development and regu-for broadcast TV content-processing released its recommendations on the lation flexibility, speeding up the paceequipment will turn from newly built provisioning of IPTV services. Basicallyof change and stimulating even more head-ends to head-end upgrades, offers the TRAI proposed that existing tripleprogress in the IPTV space.Michelle Abraham, In-Stat analyst. Many play licensees, ISPs conducting a certain of these upgrades will be the addition or volume of business and licensed cable Another of BitBands picks for IPTV replacement of encoding equipment as operators could provide IPTV servicehonours is Eastern Europe. The companymore channels are added and encoding without requiring further licences. The reckons that in this region, with quad- technology improves. The launch of new TRAI also recommended that thereand triple-play heavily embraced by new HD channels will be a driving factor for should be no changes in the Foreign players implementing technology and additional encoding equipment. CW 12 I 3. IPTV Other findings from the In-Stat reportIPTV, in its pure and hybrid forms, Telco TV Headends Moving to thecontinues to grow steadily and is poised Raising the standard Upgrade Phase include: for bigger growth as operators clear regulatory hurdles, as MPEG-4 HD set- As the IPTV bandwagon starts to roll the worldwide telco TV head-endtop boxes become more widely avail- in the front of the house, advances aremarket will reach US$732 million able, and as operators lock up exclusivebeing made in the backroom as variousin 2011broadcasting arrangements with profes-technical bodies and fora hammer out sional sports leagues, movie studios, the standards crucial to the ultimate broadcast content processing and international programmers, reports success of the new content deliveryequipment revenue will stag- Jeff Heynen, directing analyst for IPTV system.nate, while middleware, contentat Infonetics Research. We expect theprotection,and on-demand number of IPTV subscribers to continueOn December 18th what was billedcontent will continue to risegrowing steadily, reaching 65 million as the first set of global stand- worldwide in 2010. ards for Internet Protocol TV (IPTV) a VoD service has become a was announced by the Internationalrequirement for many telcosSome other industry experts have IPTV Telecommunication Union (ITU). Thewhen they deploy telco TV, which subscriber forecasts in the same sort news from the Geneva-headquarteredhas improved the market for on-of ballpark. MRG, for example, projects UN body was followed in short orderdemand equipment vendors IPTV subscriber growth from 13.5 millionby a declaration from the DSL Forum in 2007 to 72.6 million in 2011, roughly athat its latest Technical Report, TR-135 And even though some of the telco 40% compounded annual growth rate.Data Model for a TR-069 Enabled STB majors may have already selected"We've substantially increased our global had been approved and the industry their IPTV solutions suppliers, there subscriber forecast for 2011, from 63.6 recognised TR-069 amended; TR-135 seems to be plenty of CapEx left to million in the April 2007 Forecast to 72.6is focused on enhancing the remote play for. According to TelecomViewsmillion now, in large part because we'remanagement capabilities with regard recent report Opportunities in TelcoTV:considerably more optimistic about theto IPTV devices, while the amendment Forecast & Market Shares - 2006 toprobability for market success in China,to TR-069 adds support for multicast 2012, significant opportunities still exist. India and Korea, says Feldman. We downloads. We found that most of the top telco TV slightly decreased our subscriber fore- service providers have already selected cast for 2007, from 14.3 million to 13.5The new ITU standards were devel- their vendors, states Ian Cox, principal million, but paradoxically, our forecastoped by the Focus Group on IPTV (FG analyst at TelecomView. However, there for total system revenues went up, from IPTV) in the ITUs Telecommunication is still a US$4.5 billion opportunity for US$2.1 billion to US$2.5 billion."Standardization Sector(ITU-T). telco TV systems going forward.Standards are crucial for IPTV to reach And although few observers expect IPTVits market potential and global audience. While we found that well known compa-to account for more than a low, singleThey are necessary in order to give nies such as Motorola, Microsoft, and figure percentage of the overall TV and service providers - whether traditional Alcatel-Lucent will lead this industry video market in the short term, you can broadcasters, ISPs, cable operators adds Bob Larribeau, principal analyst atfind some pretty impressive numbers or telecoms service providers - control TelecomView and author of the report, for the growth of IPTV service revenues.over their platforms and their offerings, we also found that less prominentAccording to Informa Telecoms & Media says Malcolm Johnson, director of ITUs companies such as UTStarcom, Netgem,in 2006 IPTV worldwide generated reve-Telecommunication Standardization and Verimatrix are also emerging as nues from subscriptions and VoD of less Bureau. Standards here will encourage industry leaders.than US$1.5 billion. By 2012 this figure is innovation, help mask the complexity of reckoned to reach US$14.7 billion, with services, guarantee quality of service, Activity in the wider telco and non-telco US$13.6 billion coming from subscriptionensure interoperability and, ultimately, IPTV supply industry is also on the up. revenues, and a further US$1.1 billionhelp players remain competitive. After a 32% jump in sales in the second from VoD revenues. MRG is even more quarter, worldwide IPTV equipment sales upbeat with global IPTV service revenue Contained within the documents hit US$682.5 million in the third quarter rising from US$3.7 billion in 2007 to produced by the ITUs Focus Group are of 2007, up 23% sequentially, according US$23.2 billion in 2011, a compound the high-level architecture and frame- to Infonetics Researchs quarterly IPTVannual growth rate of 44%. Its worth works needed by service providers in Equipment, Services, Subscribers, and noting here that this represents potentialorder to rollout IPTV services. The ITUs Capex report.new revenue in the case of telcos, ISPs next phase of IPTV work - IPTV-GSI and other non-traditional broadcasters. (Global Standards Initiative) - will centre I CW 12 4. IPTVon the preparation of standards basedbonded DSL over a QoS-enabled on documents produced by FG IPTV Ethernet architecture. Release 3.0 will as well as on the detailed protocols also provide support for multicast to required.enable IPTV streaming as well as inte-grated remote management of Set Top The ITU says the 2006 to 2007 period Box (STB) and attached storage devices. has seen numerous physical and The full release is tentatively scheduled electronic meetings and workshopsto complete late 2008. progressing work on IPTV around the world. Twenty-one documents covering The most important aspect of this TR is IPTV requirements, architecture, Quality that all of this management can be done of Service (QoS), security, Digital Rights remotely, allowing operators to save Management (DRM), unicast and multi- both time and resources as engineers cast, protocols, metadata, middlewarewill be able to resolve problems without and home networks will be submittedleaving the office. It will also allow to the ITU-T Study Group charged operators to monitor how long STBs with progressing and distributing theare being used for and when, enabling work. The IPTV-GSI will build on the them to create product offerings which momentum generated over the past 20align with the needs of their customers, months, and it is foreseen that contribu-judges George Dobrowski, chairman tions and participation will continue to and president at the DSL Forum. increase.All in all then, thanks to the on-going The new DSL Forum specifications efforts of the various players in the are cornerstone to that organisations fledgling IPTV industry, it looks like TV pendingBroadbandSuiteRelease and video content are on their way to a 3.0, which will address triple-playbroadband connection near you. augmented via VDSL2, GPON and I CW 12 5. IPTVBitBand is a company focused on the provision of video content distribution and delivery solutions over broadband IP networks. At the close of 2007 the companys IPTV technology was serving more than 40 commercial IPTV deployments worldwide, including the systems of Tele2 in The Netherlands, ON Telecoms in Greece, FASTWEB in Italy and Connexion in the USA, among others. Assessing the future of IPTV, BitBand offers the following observations about likely IPTV content and service features: Niche content is king and long-tail content is becoming a reality. Service providers willbe required to make accessible huge volumes of content, while employing intuitive andsimple access methods. The full content life cycle will need to be managed in a flexible way,making room for innovative Content Distribution Network (CDN) platforms -- a key factor inthe success of IPTV services. User-generated content. TV of the people, for the people will continue togrow in popularity. Users are driving content and will want to incorporate thatcontent as part of their traditional TV experience. The shift to On-Demand. The trend of increased migration of TV consump-tion from linear to non-linear TV (TV On-Demand) will pick up pace, drivenby innovative new ways of serving TV in atime-shifted manner and excessbandwidth available in the Next Generation networks. We expect signifi-cant increase in concurrent viewers of suchservices.Gettingwith theprogramme CW 12 I