Telecom Redux - IPTV: standard issue

Friday, 03 September 2010

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IPTV: standard issue

Friday, 11 December 2009

Growth hinges on open specs says Arthur D. Little…

With the telecoms industry looking to IPTV as its ‘golden ticket’ to finance large-scale fibre-optic broadband roll-out, a new study by management consultancy Arthur D. Little (ADL) warns that without a single, global IPTV standard, the technology could fail to deliver on this promise.

According to ‘Open standards for IPTV Set-Top Boxes’, with a variety of Internet-ready consoles already in the home (gaming platforms, PCs, DVD players and so forth), the industry has yet to reach a consensus as to which device will serve as the hub for delivering IPTV.

ADL reckons that mass-market take up of IPTV via set top boxes (STBs) represents the industry’s best chance of funding large-scale fibre broadband infrastructure, so making sure the STB becomes a universal household fixture should remain a top priority for telecom regulators and players along the supply chain.

"With no widely accepted standard for delivering IPTV, the industry risks lower interoperability and higher costs,” offers Erik Almqvist, partner and head of ADL’s Telecommunication, Information, Media and Electronics (TIME) Practice in the Nordic region. “In some cases proprietary solutions can solve this problem, but for the set top box no proprietary standard is emerging that can achieve sufficient acceptance to drive global demand.”

Based on its analysis of the global IPTV market, ADL believes that an open approach to developing STB standards is the best path to achieving rapid price decreases and mass-market distribution, provided certain conditions are met and risks are effectively mitigated. These include:

·         negotiation and cooperation – manufacturers, operators and existing standards bodies must commit to substantial early investment and compromise based on the promise of major market growth once the standard is adopted

·         innovation – developing an open framework with multiple version functionality will allow future innovations to be retrospectively compatible

·         security – open standards’ detractors point to the risk of ‘hacking’, however this security threat exists with any popular standard – proprietary or open

·         corporate and geo-politics – to avoid being steered by the agendas of financially or politically-powerful players, the standard must be developed by a globally representative body of technology providers and operators

·         intellectual property – patent holders must agree licensing terms that ensure the equipment costs are not unduly burdened by Intellectual Property Right (IPR) costs

Big picture
Meantime, another analysis – the forthcoming ‘Q3 2009 IPTV statistics’ from Point Topic – notes another non-trivial hurdle facing the nascent IPTV industry: how to take market share from other video delivery systems. Point Topic argues this offers a significantly tougher set of challenges than, for example, those faced by broadband which had more straightforward path to market dominance offering a significant set of USPs compared to dial-up internet access.

“TV and the delivery of the content is a mature market. There are an entrenched set of suppliers, often fenced with regulatory, even protectionist, hurdles. Add to this the lack of a stand-out USP, particularly when compared to cable TV, and IPTV is plainly in a tough fight for subscribers,” reasons Point Topic senior analyst John Bosnell.

Still, IPTV has made a start. Point Topic estimates that by the end of Q2 2009 there were just over 26mn IPTV subscribers worldwide. That was an annual increase of 53%, up from the estimated 17mn a year previously.

These figures are not a million miles away from those of the Multimedia Research Group (MRG). In that company’s November 2009 edition of the ‘IPTV Global Forecast - 2009 to 2013’, it’s calculated that global IPTV subscribers will reach 28mn in 2009. MRG sees this growing to 83mn in 2013, a compound annual growth rate of 31%. MRG says the European region will continue to lead in IPTV deployments in 2013 with 48% share, followed by Asia, North America and Rest of World.
John Williamson