Since TV is time-tested as the one-hundred-year-old "killer application", Internet Protocol Television (IPTV), the newest member of the TV family, is well trusted by every fixed-line operator as a critical path to survive and thrive in this era of full convergence and open competition from the industries of cable, satellite, mobile, and Internet.
The IPTV industry is still in its infancy stage, although IPTV services have been trialed and initially deployed by multiple telecom carriers around the globe, with different scales and various levels of success. Therefore, many potential IPTV operators are wondering about what can be learned from the success secrets or pitiful mistakes of existing IPTV deployments.
With multiple international IPTV deployments and more than 50% share of China IPTV equipment market, ZTE is willing to share its first-hand learnings and non-subjective observations.
IPTV must offer distinct and attractive advantages over competing TV services (e.g., digital cable TV, satellite TV, and Internet videos)
IPTV will never succeed if it is just another me-too TV (e.g., TV-over-DSL or TV-over-fiber) because in that case, the end user has no strong incentive to switch to IPTV. In a worse case, an end user may actually receive negative and inferior experience because an IPTV network and system may not be as stable as other competing technologies.
To succeed and win word-of-mouth referrals, IPTV has to be accepted by its audience as a fashionable new way of entertainment with exciting and cool features like Time-Shifted TV (TSTV) and TV-on-Demand (TVoD).
If commercially viable and legally compliant, an IPTV operator should also attempt to secure unique contents like premium sports and movie channels, minority culture channels, and special interest channels.
Quality of Experience (QoE) is critical for user acceptance of IPTV
An IPTV operator must endeavor to avoid a bad user experience from the very beginning because it is rather difficult to repair customer relationship if the initial IPTV service fails to meet end user expectations in terms of video quality and usability.
This implies careful service planning and network design in cooperation with a strong solution provider that has extensive deployment experience (i.e., know-how) and superior technical solutions to effectively manage the QoE.
For example, TR-069 is an industry standard protocol to remotely configure an IPTV Set-Top Box (STB) and monitor its QoE parameters (packet loss, jitter, delay, etc.). TR-069 enables proactive monitoring of QoE during normal operations and provides detailed trace data when diagnosis is needed in case of unsatisfactory user experience.
Service customization tools are needed for maximal deployment flexibility
Besides offering a comprehensive solution with a rich set of desirable services, an IPTV solution provider should also provide an IPTV operator with the necessary IPTV customization toolkits for developing Electronics Program Guides (EPGs), games, and Value-Added Services (VAS).
The customization toolkits enable the IPTV operator to quickly develop specialized EPGs, games, and VAS on demand in order to catch dynamic market opportunities like promotions on festivals or sports leagues.
The customization toolkits are needed to support both the centralized deployment model at the initial IPTV deployment stage and the distributed (regional) deployment model at later stages of large-scale IPTV deployments.
IPTV solution must include strong support for enterprise and vertical markets
Vertical markets (e.g., hospitals, schools and banks) and enterprise users may account for a large percentage of revenues at all stages of IPTV deployment.
This requires features like Virtual Content Delivery Network (VCDN), specialized EPG templates, VoD for training, video telephony, video conferencing, and video monitoring for offices, banks, schools, homes, and vehicles.
In addition, integration and convergence with existing IT infrastructure, for example, PBX and customer support system, have to be included in the IPTV solution for enterprise and vertical markets.
CAPEX and OPEX must be minimized to ensure profitability
In a typical IPTV deployment, the cost of STB accounts for more than half of the per-subscriber capital expenditure. As a result, an IPTV business case often heavily depends on how to lower the cost of STB while preserving all the desirable features.
Whenever permitted by digital rights laws, the Network-based Personal Video Recording (NPVR) feature may be adopted to reduce the cost of STB while offering PVR-related functions like TSTV and TVoD.
DRM license is another major cost factor. An IPTV solution should offer multiple DRM mechanisms so that an IPTV operator may select the most cost-effective DRM to meet the technical and business demands.
An ever-decreasing subscription fee can be offset with rich VAS and intelligent advertisement insertions
To profit, an IPTV operator must adopt multiple revenue streams, through not only subscription fees, but also pay channels, as well as through advertisements, and various value-added services.
VAS is a secret weapon for IPTV to compete favorably against cable, satellite and Internet videos. Value-added services may include televoting, e-commerce, photo/video hosting, video telephony, video conferencing, and a lot more of others.
At the era of PVR and TVoD (i.e., greater control by end users), the traditional advertising model is undoubtedly challenged since users can easily skip uninteresting advertisements. However, thanks to the powerfulness of IPTV middleware and the convenience of IP transport, it is much easier for each IPTV STB to collect and report a user's viewing habits and service patterns enabling the IPTV system to perform intelligent data mining to deliver more relevant, thus more attractive, advertisement insertions. The privacy of each user must be respected in this case to avoid user resentment. A user must be able to indicate his or her choice of privacy levels.
A significant mass of subscribers can be attracted through effective marketing
When IPTV services are launched, creative and appealing market promotions (e.g., free STB for 2-year contracts, one-month free) play a key role in IPTV success. The rationale is to attract a significant mass of subscribers as quickly as possible to increase revenue streams from advertisements and value-added services.
Besides the above mentioned rules of thumb, many other important learnings and observations are probably worth sharing though they are not included in this article due to length limitations.
ZTE, as a global leader with superior IPTV solutions and extensive deployment experiences, is always willing to help every IPTV service provider successfully launch and grow their IPTV business.