2008
04/2008 - Deutsche Telekom Chooses JDSU for IPTV Monitoring
04/2008 - FTTH Growing in North America
03/2008 - Alcatel-Lucent Acquiring ReachView Technologies
03/2008 - MPEG LA Suing Amino
03/2008 - Entriq Acquiring DayPort
03/2008 - Roo Group Acquiring Kamera
03/2008 - Viaccess Acquired Orca Interactive
03/2008 - NEC Re-enters IPTV Business
02/2008 - French Telecom Operators Launching Soft At Home Middleware
02/2008 - Survey Shows Video Quality Critical to IPTV Success
01/2008 - Will 2008 Be The Year of HD?
01/2008 - Verizon Hits 1 Million Subs - Looking to the Big Apple
01/2008 - Current Media's IPO for $100 Million
2007
12/2007 - EU Chooses DVB-H Mobile TV Standard
12/2007 - Mobile TV: Global Standards Review & Forecast Report
12/2007 - MRG's Top 10 IPTV Drivers for 2007
11/2007 - German IPTV Market Heats Up
11/2007 - Bell Canada Postpones IPTV Service
10/2007 - Internet Video: Threat or Opportunity for IPTV Operators
10/2007 - Verizon vs. Cable Operators
09/2007 - Arris Acquires C-Cor for $730 Million
09/2007 - Avail Buys Kasenna's ViewNow Subsidiary
09/2007 - Alcatel-Lucent Buys Tamblin
08/2007 - Independent Hollywood Studios Consider Simultaneous Release
08/2007 - SecureMedia Acquired by Cavalier Telephone
07/2007 - iPhone Video Support
07/2007 - Chile Goes IPTV
07/2007 - Symmetricom Unveils QoS Probe
06/2007 - IMS Playing Increasing Role in Converged Services
06/2007 - SES Americom Unveils IP-Prime Turnkey IPTV Solution
06/2007 - Internet Video for IPTV Service Providers: A Preview
06/2007 - BSkyB Talking to Tiscali; Drops PVR Fees
05/2007 - Motorola to Acquire Modulus Video
05/2007 - Avail Media Gets Funding
05/2007 - Comcast Drops Microsoft from Cable Boxes
04/2007 - HD: A Must-Have for IPTV in North America
04/2007 - Packet Vision Looks to IPTV Advertising
03/2007 - Iceland's IPTV Market
03/2007 - Cablevision Loses Network DVR Lawsuit
02/2007 - Hawaii IPTV Services Launches
02/2007 - Ericsson and Arris Bid for Tandberg
01/2007 - Mergers and Acquisitions
01/2007 - Tiscali to Relaunch Homechoice as Tiscali TV
Deutsche Telekom Chooses JDSU for IPTV Monitoring
April 2008
JDSU announced that Deutsche Telekom is using its IPTV monitoring solutions as part of its roll out. Andrew Sachs said that DT wanted to ensure service quality for their multi-million dollar IPTV deployment.
JDSU's NetComplete service assurance system and IP test probes will be deployed in DT’s network. The NetComplete solution also includes software that enables monitoring of service quality from central network operations centers.
JDSU's NetComplete solution monitors IPTV video streams at the most important points in the network: the head end and the edge. Operators can learn about and attend to service issues before they impact the home experience.
They can be used during installation, and during maintenance. JDSU's solution includes handheld field instruments (the HST-3000) that can help with installation and maintenance of triple play services.
Sachs clarified that JDSU doesn’t do the load testing or performance assessment prior to deploying IPTV. Rather, JDSU probes are installed in a network once it’s up and running. Their instruments can help installers know whether a line can support a service (VOIP, data or IPTV) and pre-qualify lines.
Provisioning lines often depends upon the Operator, Sachs said. Some IPTV Operators use a “fire and forget” system where they don’t pre-qualify prospective customers. He said Neuf-Cegetel offers low-cost phone and video services and customers perform self-installation. If it turns out that the line can’t support IPTV, then customers send back the modem and equipment.
Source: MRG April 2008 IPTV Bulletin
FTTH Growing in North America
April 2008
Joe Savage, President of the FTTH Council spoke during the NAB Show and said that FTTH is growing in North America with 2.91 million households connected with Fiber. That’s a 97% growth rate from a year ago when just 1.48 million households had Fiber in April 2007.

Source: Fiber to the Home Council
Savage said that the number of households receiving video services fiber is increasing also and now numbers over 1.6 million. Savage also said that takeup rates for IPTV services offered via FTTH are better than those over non-fiber which are at the 20 percent range. IPTV take-up (with FTTH) runs about 28 percent.
 Source: Fiber to the Home Council
Additionally, Savage said that providers, like Verizon, are waiting for more IPTV growth before moving away from RF.
Other fiber facts from the FTTH Council’s recent report:
- FTTH now passes almost 12 million homes or about 10 percent of the U.S. homes.
- In U.S. areas covered by Verizon or Tier 3 ILECs, 5.8% of homes are already connected with fiber.
- The overall Fiber take up rate, went up for the fourth straight six-month period.
Source: MRG April 2008 IPTV Bulletin
Alcatel-Lucent Acquiring ReachView Technologies
March 2008
Alcatel-Lucent is acquiring ReachView Technologies, a consulting company and software maker, for an undisclosed amount.
Source: MRG March 2008 IPTV Bulletin
MPEG LA Suing Amino
March 2008
Companies in the patent licensing group MPEG LA are suing set-top box maker Amino because it is infringing on MPEG-2 compression technology patents. Amino said that it rejecting the claim that it has infringed patents and said it has not been served with any patent enforcement actions. Amino said that the MPEG LA companies have no legal right to remove Amino MPEG-2 products from sale, or to receive any damages. Bob Giddy, CEO of Amino said in a statement that the company has tried to reconcile agreements with suppliers and the MPEG LA. The patent lawsuit was filed in February in Dusseldorf, Germany.
Source: MRG March 2008 IPTV Bulletin
Entriq Acquiring DayPort
March 2008
Entriq said it was acquiring DayPort, a company focusing on video publishing, content, workflow, and syndication solutions. Financial terms of the deal were not disclosed.
Source: MRG March 2008 IPTV Bulletin
Roo Group Acquiring Kamera
March 2008
Roo Group, an online video network provider, said it was acquiring Swedish-based IPTV technology company Kamera.
Source: MRG March 2008 IPTV Bulletin
Viaccess Acquired Orca Interactive
March 2008
Viaccess, a subsidiary of France Telecom, has acquired Orca Interactive for US$21.4 million in cash. Orca is a developer of interactive-TV applications. Reportedly, Orca (reportedly) has US$12 million cash on hand, making the real price about US$9.4 million.
Source: MRG March 2008 IPTV Bulletin
NEC Re-enters IPTV Business
March 2008
In March, NEC announced that it was re-entering the IPTV business by providing solutions to carriers by using an IP multimedia subsystem (IMS) architecture. NEC said that it hopes to earn about $500 million by 2010.
For more information, consult our: MRG March 2008 IPTV Bulletin
French Telecom Operators Launching Soft At Home Middleware
February 2008
Three French telecom companies-- France Telecom, Sagem Communications and Thomson--launched a joint venture looking to create open source middleware products that “better fit the needs of Telecom Operators.”
Their initiative, called Soft At Home, acts as middleware, competing with Microsoft’s IPTV Mediaroom platform.
Although the companies wouldn’t say how much they’ve invested in the company, their budget was for about 80 employees. FT will hold 60% of the company, while the other two will each have 20%.
An executive for France Telecom said they were looking to develop a standard for the industry and take on the needs of Telecom Operators.
The software will include applications like photo viewing, receiving calls on TV and more. They plan to commercially launch the software in the 3rd or 4th quarter 2008 in France.
This deserves monitoring, because France Telecom/Thomson will now find itself competing with other Tier-1 developed middleware products like Cascade (PCCW) and MyViewTV (Telefónica). Conceivably, Verizon (which largely developed its own middleware for FiOS after firing Microsoft) also could spin off its middleware, although we don’t see that happening soon. A major impact will be on potentially reducing the market for Microsoft’s Mediaroom middleware.
{Note: analyst comments are italicized}
For more information, consult our: MRG February 2008 IPTV Bulletin
Survey Shows Video Quality Critical to IPTV Success
February 2008
A study conducted by Multimedia Research Group found that video quality is critical to the growth and success of IPTV. By increasing quality of experience (QoE), IPTV Operators can significantly, reduce overall costs, lower customer support calls and reduce customer churn.
 Source: MRG, Inc. and Symmetricom
The study found that many Service Providers feel their existing monitoring solutions lack an accurate measurement of perceptual end-user quality.
Key results of the study:
-
84% reported video quality monitoring as critical or a very important part of their video initiative.
-
Over 90% of respondents were notified about service quality problems from subscriber calls.
-
77% say video quality is a main reason for customer churn.
-
The top three issues are video freeze, macroblocking and video blackout.
-
Over 72% of all problems come from access, core and home networks.
-
77% of participants feel that existing video quality monitoring solutions are not an accurate measure of end-user quality and 78% feel that they are not true end-to-end solutions.
-
Less than half of respondents conduct deep packet inspection (MPEG), P and B frames, and groups of pictures.
A summary of the report can be downloaded at: http://qoe.symmetricom.com/lp/IPTV_Study1/
For more information, consult our: MRG February 2008 IPTV Bulletin
Will 2008 Be The Year of HD?
January 2008
Comcast announced that it was adding more Hi-Def VOD content. Under an initiative called "Project Infinity" Comcast will offer over 1,000 high-definition (HD) on-demand movies and TV programs every month by the end of 2008, up from about 250 HD programs.
Currently, Comcast’s Web site shows that there are 24 HD channels available. Five of them (NFL Network, HBO, Starz, Showtime and Cinemax) are only available to those paying extra per month for those channels.
Verizon’s Web site says that FiOS TV only offers 20 HD channels which doesn’t seem to include premium channels. However, Verizon also plans to step up its HD offerings to 150 HDTV channels (including HD VOD titles) later this year.
Dish Network said it was expanding its HD channels from 76 to 100 this year. Some of these are not year-round, which brings the total to under 90.
DirecTV now has 90 national HD channels. It will also offer local HD networks in 11 additional markets by mid-2008 — bringing the total number of markets where DirecTV offers local HD programming to 76.
For more information, consult our: MRG January 2008 IPTV Bulletin
Verizon Hits 1 Million Subs – Looking to the Big Apple
January 2008
Verizon Hits 1 Million Subs – Looking to the Big Apple: Verizon is reportedly looking to offer FiOS TV in New York City, by making a 15-year video franchise deal with regulators. New York City’s existing franchise deals with Time Warner and Cablevision expire later this year. Its IPTV subscriber base has now reached 1 million.*
Verizon has primarily focused on suburban areas, so entering New York City could be a huge win for the company. It would go a long way to gaining subscribers and credibility as an alternative TV provider to the cable companies. It can also make it easier for Verizon to enter other urban markets, such as Boston, Washington DC or Philadelphia later this year. Entering the urban/big city market also means that Verizon must go after multiple dwelling units (MDUs), and the less wealthy. Most of Verizon’s current operational areas are in suburbs, so a push into dense urban environment will represent a new challenge and opportunity to the FiOS team.
* Note: We count FiOS as IPTV because its (100%) VOD service is carried over a managed IP network.
{Note: analyst comments are italicized}
For more information, consult our: MRG January 2008 IPTV Bulletin
Current Media's IPO for $100 Million
January 2008
Current Media, the youth-oriented channel founded by former Vice President Al Gore, has filed for a $100 million IPO. The announcement comes at an important time for the programmer. According to news accounts of the future stock offering, the channel had an accumulated deficit of $31.9 million at the end of 2007. Revenues for 2007 were $63.7 million.
Since the channel boasted profitability after its first year of operation, we wonder where the $31.9M deficit came from. Yet to reach 51 million U.S. households as it has, the channel has done quite well if compared with other start-ups like Oxygen, which ran up a deficit of about $250M in 5 years and reaching not many more households.
{Note: analyst comments are italicized}
For more information, consult our: MRG January 2008 IPTV Bulletin
EU Chooses DVB-H Mobile TV Standard
December 2007
The European Commission said it is endorsing DVB-H as the official mobile TV standard. This is a blow to MediaFLO, a standard developed by Qualcomm. All 27 member states will be required to support the use of DVB-H for mobile television.
Viviane Reding, the commissioner for the information society and media, welcomed the endorsement by a majority of member states. “This shows that political resolve and market developments are in tune to ensure this potentially multi-billion Euro market is on the right track by mid-2008,” she said.
“I welcome the support received today for the Commission’s mobile TV strategy and, by a strong majority of member states, also for DVB-H. At the same time, I call also on the minority of governments who are still reluctant, partly for internal reasons, to endorse DVB-H as a European standard to join the majority quickly.”
For more information, consult our: MRG December 2007 IPTV Bulletin
Mobile TV: Global Standards Review & Forecast for Infrastrucuture & Handsets - 2007 to 2011
December 2007
This report assesses the spectrum allocation, trials, technology usage & development, content strategies, deployments, business models and global forecasts for the mobile TV subscription growth and the infrastrucuture build-out for five major regions and over seventy Operators. The report also projects which technologies will prevail and in what regions; and shows how "co-operation" between Cellular Operators and broadcasters plays out over the next five years.
For more information, consult our Mobile TV – April 2007 report.
MRG's Top 10 IPTV Drivers for 2007
December 2007
Compiled by IPTV Analysts: Jose Alvear, Len Feldman, Steve Hawley and Gary Schultz
#10.
2007 was the year that the first Service Provider (Free) reached 1 million IPTV subscribers. (We're counting actual IPTV users, not customers who can't receive IPTV [due to distance], or who choose not to.) There's also still a chance that either Orange France Telecom and Verizon (or both) will reach the 1 million subscriber mark before the end of the year.
#9. 2007 was the year where IPTV vendor consolidation began in earnest:
- The Alcatel-Lucent merger closed this year, as did the formation of Nokia Siemens Networks.
- Motorola became number one in live encoders, thanks to its acquisitions of Tut and Modulus.
- Ericsson acquired TANDBERG Television.
- Cavalier acquired SecureMedia.
#8. In 2007, Microsoft's Service Providers started deploying IPTV to their customers in quantity. While we still have concerns about the mass deployability of the Microsoft Mediaroom solution, it's clear that systems built on Microsoft's middleware have commercial viability.
#7. 2007 was the year that the first IPTV deployments (albeit small) began in India. Meantime, Korea’s on-demand (VOD) IPTV service is skyrocketing, due partially to Korea being the most broadband-equipped country in the world (with virtually 100% broadband penetration), with the majority of homes receiving 100 Mbps.
#6. In 2007, PCCW was passed as the world's largest IPTV Operator by both Free and Orange France Telecom. As a result, France became the world's largest IPTV market (although PCCW also continues to grow).
#5. For the first time, major Cable Operators like Comcast are publicly expressing concerns that the Telcos' IPTV efforts are starting to eat away at their subscriber bases - and that is impacting shareholders.
#4. When IPTV was an "early adopter phenomenon," making it work was an exercise in creative engineering and the Operator's engineers were driving the train. Now, more than ever, concerns over cost containment, breakeven and profitability have engaged the business side of the house. This has resulted in a rising interest in advertising and content.
#3. From an infrastructure perspective, IPTV turned a corner this year. Operators no longer question whether IPTV can be made to work as a business. Instead, the attention has moved toward refining the consumer’s experience, and therefore toward investing in test, measurement and monitoring.
#2. Now that U.S. Tier-1’s (Verizon and AT&T) are growing their subscribers, the U.S. is being seen as finally starting to catch up with the rest of the IPTV world. However the perception that the U.S. and Canada are "behind" the rest of the world is somewhat inaccurate because smaller North American Operators have been doing IPTV for as long as a decade.
#1. MPEG-4 AVC set-top boxes are shipping in volume, making it the first time that the promises of MPEG-4 AVC could be realized after many years of
waiting.
And here's a "top ten stay tuned in 2008" item: "Convergence" is coming, but it isn't here yet. Operators, middleware, security and other infrastructure suppliers are working together to enable and test multi-service use-cases, but there is still some uncertainty as to which ones will reward them with added revenues.
For more information, consult our: MRG December 2007 IPTV Bulletin
German IPTV Market Heats Up
November 2007
Europe is home to some of the largest IPTV services. For example, France already has about 2 million total IPTV subscribers. However, Germany has been lagging in IPTV, despite having a big economy, and a tech-savvy population of over 82 million people.
Currently there are three IPTV providers in Germany: HanseNet, Deutsche Telecom and Arcor.
Company |
Date Launched |
Channels |
Price |
Subscribers |
HanseNet |
May 2006 |
100 |
€9.90 |
15,000 |
Deutsche Telecom |
October 2006 |
N/A |
€59.95 |
75,000 |
Arcor |
May 2007 |
110 |
€9.95 |
Trial |
Source: Copyright © 2007 MRG, Inc.
For more information, consult our: MRG November 2007 IPTV Bulletin
Bell Canada Postpones IPTV Service
November 2007
Bell Canada is reportedly postponing the launch of its IPTV ADSL service. The decision to put it on hold has been known among key players in the industry, but it’s a long road for Bell.
Back in 2003, Microsoft and Bell Canada announced that they were trial testing IPTV. Later, Bell said it would launch commercial IPTV in 2006, but before the year was over, the company said that it would wait until Microsoft released an update of its IPTV software.
Now, about four years later Bell Canada hasn’t launched its service yet. Company officials refuse to talk about when the IPTV service may launch, saying they don’t comment on future products and releases.
For more information, consult our: MRG November 2007 IPTV Bulletin
Internet Video: Threat or Opportunity for IPTV Operators
October 2007
IPTV operators of managed networks everywhere are wondering how best to deal with (best-effort) Internet Video services that may eventually become either partners or competitors. MRG’s new report "Internet Video for IPTV Service Providers" investigates how IPTV can leverage both professionally-developed and user-generated video content to reduce churn and generate revenue.
"We've found that using Internet Video is a tremendous opportunity if it's tailored around the IPTV operator's local market," states Len Feldman, Director of IPTV Analysis for MRG, Inc. "Internet Video, if brought onto a managed network with superb search and display, can be a significant added value for the IPTV operator."
For more information, consult our Internet Video for IPTV Service Providers – September 2007 report.
Source: MRG October 2007 IPTV Bulletin
Verizon vs. Cable Operators
October 2007
Now two years old, Verizon has spent over $18 billion for its FiOS TV service. Verizon said it now has 500,000 customers, and is adding 2,600 new customers every business day. An analyst with Banc of America, predicts that Verizon will have 2 million FiOS TV subscribers by the end of 2008. That would make it the 9th largest provider of TV service in the U.S.
At an investor conference, Comcast said that Verizon is a real competitor and is taking customers away from them.
For more information, consult our: MRG October 2007 IPTV Bulletin
Arris Acquires C-Cor for $730 Million
September 2007
Arris announced that it is acquiring C-Cor for $730 million. The deal is expected to close in January 2008. The combined company will have over $1.2 billion in sales over the past 12 months.
Arris and C-Cor have had a long standing business relationship, said the companies.
For more information, consult our: MRG September 2007 IPTV Bulletin
Avail Buys Kasenna's ViewNow Subsidiary
September 2007
Avail Media has acquired Kasenna’s ViewNow subsidiary. Financial terms of the deal were not disclosed.
ViewNow provides video-on-demand programming from major studios, to cable providers and Telcos. Content providers include Buena Vista/Disney, Dream Works, Lions Gate Films, NBC/Universal, New Line Cinema, Paramount, 20th Century Fox and Warner Bros.
For more information, consult our: MRG September 2007 IPTV Bulletin
Alcatel-Lucent Buys Tamblin
September 2007
Alcatel-Lucent announced it acquired Tamblin, a privately held company for an undisclosed sum. Alcatel-Lucent said that Tamblin will provides applications and tool kits to enhance the company’s IPTV service.
Tamblin provides interactive TV advertising campaigns and can help provider track usage. Tamblin's primary product suite, i-ZoneTV, is an application creation and management system developed for the TV broadcast industry.
For more information, consult our: MRG September 2007 IPTV Bulletin
Independent Hollywood Studios Consider Simultaneous Release
August 2007
Usually, when a movie is premiered it hits the theaters, then months later it goes through other releases such as DVD, premium TV, VOD and finally free TV. These release windows, as they’re called, have been around for many years and are in place to maximum revenue from each source.
However, with the popularity of Internet TV, some Hollywood studios are looking at something called “simultaneous release.” This means premiering movies in theaters, DVDs and the Internet at the same time.
Simultaneous release is an important topic for service providers in the IPTV space since it affects when movies are available for video-on-demand.
{Note: analyst comments are italicized}
For more information, consult our: MRG August 2007 IPTV Bulletin
SecureMedia Acquired By Cavalier Telephone
August 2007
SecureMedia
announced that it was acquired by Cavalier Telephone and TV, a CLEC provider in the United States. Cavelier is also SecureMedia’s customer.
Largest local exchange carrier, with 350,000 telephone customers and “ambitious plans for IPTV,” said Whit Jackson, VP of Business Development at SecureMedia.
“The dominos are beginning to fall,” said Jackson.
SecureMedia will remain a wholly owned subsidiary and will continue to have its existing customers. “We’re looking to continue to grow the business and still have a road map, with the same team,” he said. SecureMedia will also actually hire more people soon, he said.
For more information, consult our: MRG August 2007 IPTV Bulletin
iPhone Video Support
July 2007
With the release of iPhone this month, we’re finally getting to hear about real-world usage and reviews. Most reviews are positive, but admit that the iPhone has some flaws. Apple has yet to announce sales for the current quarter, but AT&T’s activations weren’t as high as many expected.
In its second-quarter earnings announcement, AT&T said that 146,000 iPhones were activated in a day and a half. Most analysts predicted that AT&T would report 500,000 to 700,000 activations during the first few days.
However, not all of AT&T’s sales were recorded (just the first two days before the end of the quarter), and there were many reports of delays in signing up for service. So it’s possible that AT&T may still show good numbers for the next quarter. The one good news for AT&T is that 40% of iPhone subscribers were new to AT&T.
For more information, consult our: MRG July 2007 IPTV Bulletin
Chile Goes IPTV
July 2007
The competition for IPTV service in Chile is heating up. In 2006, Chilean telecom operators CTC and Telsur announced plans to launch IPTV with Telsur investing US$30 million, and CTC investing over US$100 million in IPTV and broadband investments.
In July 2007, Telefónica del Sur (Telsur) launched WiTV, an IPTV service available in parts of southern Chile. Telsur’s 50,000 broadband customers can order the service featuring 80 channels.
Meanwhile Chilean fixed line incumbent Telefónica Chile already launched its IPTV service in the capital, Santiago. Currently, Telefónica Chile’s service is still in its initial phase and is limited to wealthier neighborhoods. In 2008, the company will rollout service to other parts of Santiago.
For more information, consult our: MRG July 2007 IPTV Bulletin
Symmetricom Unveils QoS Probe
July 2007
Since launching our IPTV Video Quality: QoS & QoE report in 2007, MRG has been publishing articles on Test & Measurement as a means of educating the market in the tools that help operators achieve improved QoS and QoE in their systems. This is one of those articles.
Symmetricom announced the new Q-400 IPTV probe, that enables Quality of Service (QoS) assurance and Quality of Experience (QoE). Symmetricom created and patented a scoring system to measure IPTV service quality, called V-Factor, so that network administrators can see what the customer is experiencing in real time. Symmetricom's probes collect and report aggregate statistics in real time for customer flow simulations and traffic flow analysis.
The Q-400 monitors up to 400 SD or HD H-264 IPTV streams and up to 10,000 VoIP streams in parallel in full passive mode.
{Note: analyst comments are italicized}
For more information, consult our: MRG July 2007 IPTV Bulletin
IMS Playing Increasing Role in Converged Services
June 2007
IMS for IPTV will likely start with cross platform services like caller ID on TV screens.
IMS will help mobile media devices register with local broadband networks to be able to access media and other information and display it in accordance with the capabilities of the local display (ranging from a small low resolution screen to a large HD wall display).
For more information, consult our: IMS and SDPs in IPTV Networks — August 2006 report and our MRG June 2007 IPTV Bulletin
SES Americom Unveils IP-Prime Turnkey IPTV Solution
June 2007
IP-Prime offers various programming options, a carrier-grade headend, set-top boxes and multiple middleware solutions to make it a complete end-to-end IPTV solution.
Bill Squadron, senior vice president of media partnerships at SES Americom, said that its solution is the closest thing to “flicking a switch” to turn on an IPTV service. During NxtComm, SES showcased IP-Prime with NDS middleware.
IP-Prime is available as a “Transport Only” system where programming is delivered to the telco’s headend in MPEG-4 and distributed using the telco’s own STB solution. Or it can be used as a “Fully Managed” solution where SES takes care of the entire process from ingest to deliver into set-tops.
For more information, consult our: MRG June 2007 IPTV Bulletin
Internet Video for IPTV Service Providers: A Preview
June 2007
It’s impossible to underestimate the impact of Internet video on service providers. The YouTube phenomenon is driving incredible demand for bandwidth; by some estimates, web video comprises as much as half of all backbone bandwidth. Subscribers are demanding more and more bandwidth to both view and submit video over the web. And when those subscribers are watching web video, they’re not watching broadcast or VOD content on IPTV services. But can the problem of Internet video also represent an opportunity? Can service providers actually make money with Internet video?
In July 2007, MRG will release “Internet Video for IPTV Service Providers,” a comprehensive report that will explain how to utilize Internet video in order to decrease churn and increase both subscription and advertising revenues. The report will cover both user-generated content (“bottom-up”) as well as professionally-produced (“top-down”) content, and the ways in which the video services offered by service providers should differ from YouTube and other sites.
The report will examine the technical and cost aspects of building and operating an Internet video capability, including outsourcing options throughout the content chain. A variety of vendors will be profiled, along with their relevant products and services. The issues of why, when and how to move Internet video to the set-top box will also be explored.
For more information, consult our: MRG June 2007 IPTV Bulletin
BSkyB Talking to Tiscali; Drops PVR Fees
June 2007
U.K. satellite broadcaster BSkyB is reportedly in talks with Italian-based Tiscali to place its basic selection of in-house channels on Tiscali’s UK IPTV platform. Additionally, BSkyB is dropping its subscription fee for its Sky+ PVR package, which currently costs £10 ($20) per month.
Dropping the fee for PVR means that BSkyB is trying to push the competition and drive down costs. Possibly other TV providers may be forced to drop PVR fees and absorb the costs themselves. Meantime, BskyB has announced plans to stop supplying Virgin Cable with satellite feeds.
{Note: analyst comments are italicized}
For more information, consult our: MRG June 2007 IPTV Bulletin
Motorola to Acquire Modulus Video
May 2007
Motorola announced this month that it will acquire MPEG-4 encoding company Modulus Video for an undisclosed sum.
Bob Wilson, chairman & CEO of Modulus Video, said that the news of the acquisition was well received by customers, partners and their investors. The acquisition will likely close in June or July 2007.
Motorola has been Modulus’ biggest customer for the last two years, said Wilson. “It’s a natural fit,” he said.
For more information, consult our: MRG May 2007 IPTV Bulletin
Avail Media Gets Funding
May 2007
Avail Media closed a series-B round with $17 million in funding co-led by Washington, D.C. area funds Novak Biddle Venture Partners and Columbia Capital.
Avail Media's solution allows IPTV content to be acquired directly from programmers in its full-resolution and unaltered format, encoded and encrypted, and finally transported to the customer via satellite.
The funds will assist the company as it expands its suite of services and brings on additional employees for operations and technology development.
For more information, consult our: MRG May 2007 IPTV Bulletin
Comcast Drops Microsoft from Cable Boxes
May 2007
Comcast said it was dropping Microsoft’s TV software from its digital cable boxes in the Seattle area. Instead, Comcast will use GuideWorks electronic program guide software, which is already in use in the rest of the U.S. GuideWorks is a joint venture between Comcast and Gemstar TV Guide.
Seattle was the only Comcast system using Microsoft software. Microsoft, however, said that its cable TV software is still in use in Latin America.
GuideWorks will be rolled out in stages to existing digital cable boxes from June through early September.
For more information, consult our: MRG May 2007 IPTV Bulletin
HD: A Must-Have for IPTV in North America
April 2007
During the NAB 2007 conference, MRG’s Bulletin Editor, Jose Alvear, moderated a panel session entitled “IPTV Wanted...Must Do HD” with company reps from Microsoft, Calix, Modulus Video, and AT&T.
The panelists provided a good cross section of the front to end IPTV experience and spoke about the drivers and challenges to HD over IPTV. Microsoft’s Channel Manager, Bruce Churchill, pointed out that many people change how they watch TV after getting an HD set. “Many people with HD only watch HD content, or channel surf HD channels first,” he said.
Overall, all the panelists agreed that HD is a must-have experience for IPTV customers. In 2006, digital TV sets outsold standard sets by 46 percent in the U.S. and total HDTV sets were at 11 million. And with the analog switch-off date (February 2009) fast approaching in the U.S., providers will have to be nimble to keep customers happy.
The U.S. is one of the biggest IPTV HDTV markets. According to MRG research, 15% of IPTV households (about 274,000) in the U.S. already have HD sets. This number will climb to 85% (8.82 million) by 2011, driven by the move to HD and the popularity of HDTVs.
HD is already a “must-have” for most IPTV service providers. If an IPTV provider can offer more HD channels than cable or satellite, it might be able to compete and convince customers to switch to IPTV.
Following is a breakdown of HD offerings in the U.S.
| Provider |
HD Channels |
Price |
| AT&T U-Verse |
25 HD channels |
$10/month |
| Verizon FiOS TV |
20 HD channels
(16 national, 4-5 local) |
$9.99/month |
| DirecTV |
Over 200 HD
(NFL games) |
$9.99/month |
| Comcast |
15 HD Channels |
$5/month |
DirecTV has the most HD channels, but most of those are sports programming. Removing those extra channels, AT&T’s U-Verse, an IPTV service, is beating cable and satellite. Comcast has the fewest HD channels, but charges a lower monthly fee also.
This HD advantage is what IPTV providers must push for since IPTV is still a difficult sell for new customers. In fact, AT&T recently announced that it was offering free HD service for 1 year for new subscribers of its U-Verse service.
In the U.S. where cable competition and satellite competition is strong, IPTV service providers have to differentiate their services with HD including HD DVRs. They must also provide better quality than competing HD services. Also, satellite and cable providers have been known to scale back the HD bitrate which means potential quality problems that IPTV operators can exploit.
One thing that can help the economics of delivering HD is to lower the video bitrate. On the NAB exhibit floor, Grass Valley/Thomson was demonstrating its Mustang encoding chip which claims to deliver high-motion HD video at 4 to 5Mbps, which is about half the bitrate of current MPEG-4/AVC encoders that range from 8 Mbps and 12 Mbps. Lower bitrates means more HD channels for providers and consumers and that’s what everyone is after.
IPTV will lead the HD market based on MPEG-4/AVC—faster than cable or digital terrestrial. As providers switch to HD, MPEG-2 equipment will become obsolete. MRG research shows that revenue from MPEG-2 set-top boxes and headends will disappear by 2008 or 2009 and be replaced by MPEG-4 SD and HD equipment.
For more information about HD/AVC IPTV encoders and set-top boxes, see MRG’s new IPTV Global Forecast — 2007 to 2011, April 2007 or visit our website at www.mrgco.com/TOC_IPTV_GF0407.html.
For more information, consult our: MRG April 2007 IPTV Bulletin
Packet Vision Looks to IPTV Advertising
April 2007
With the success of many IPTV deployments, people are starting to ask: What about IPTV advertising? Packet Vision is answering that call by “providing targeting TV advertising to specific households via IPTV.”
Charlie Horrell, CEO of Packet Vision, says that the company’s technology supports local ad insertion, interactive and targeted advertising that can be tailored to match the demographics of individual households and even altered in real-time to reflect viewers’ reactions.
Founded in 2004, Packet Vision is a relatively new company and just recently announced its first customer trial in the US with Alaskan IPTV operator MTA.
Packet Vision’s ad server sits on the edge of the network, cuts in advertising and outputs 200 independent video streams. Aside from the hardware, the system also comes with sales and a traffic management software system so that providers can easily track and manage advertising campaigns.
Horrell said, “telcos are busy getting subscribers and are not focused on advertising much.” But as IPTV subscribers hit the critical mass, he believes providers will start IPTV advertising.
Packet Vision is interested in talking with everyone in the IPTV space, but is specifically looking at the mature European market such as France, Italy and Spain. But they are also interested in U.S. providers like AT&T and Verizon.
There are three types of data that can be gathered by Packet Vision’s technology: CRM information from the telco provider, the address or location, and tracking via IP tools such as channel changes and clicks.
Horrell said Packet Vision is using a “zero-risk, low capital investment model” which means the company will provide the server for free, in exchange for getting a percentage of revenues.
“One-to-one advertising hasn’t gotten very far. It’s more like one to many ones,” said Horrell. He says that viewers will see more relevant advertisements, which can prevent “channel hopping” and start new ad models for TV advertising.
Targeted advertising capabilities are great, but most service providers aren’t even selling conventional linear advertising yet.
“Most of the pieces of the jigsaw to turn IPTV into a mass revolution are in place, and the service that Packet Vision is providing will be the catalyst to turn opportunity into revenue for players in this market,” said Richard Scott George, GM of Packet Vision.
Servers and insertion devices are such a small percentage of the total cost of a system that we think that few system operators will trade off servers for a percentage of revenues. However, there could be a significant opportunity for a vendor that offers a complete, turnkey ad sales and delivery service, including hardware and software along with a qualified local and national ad sales force, in return for a share of ad revenues.
For more information, consult our: MRG April 2007 IPTV Bulletin
Iceland's IPTV Market
March 2007
Iceland Telecom (now called Siminn) says that it has deployed IPTV around the entire country with over 50% of its 52,000 DSL customers subscribing to the TV service.
In November 2004, Siminn launched its IPTV service in 10 towns around Iceland and by late 2005 it began offering full IPTV services with more than 60 channels, and VOD. Siminn is using Thomson middleware, Thales SmartVision broadband service platform and IBM servers.
For more information, consult our: MRG March 2007 IPTV Bulletin
Cablevision Loses Network DVR Lawsuit
March 2007
The U.S. District Court for the Southern District of New York ruled against Cablevision’s attempt to launch a network digital video recorder. Twentieth Century Fox, Universal City Studios, Paramount Pictures, Disney, CBS, ABC, NBC Studios, Turner Broadcasting’s Cartoon Network and CNN sued Cablevision in May 2006 claiming that its network DVR (called RS-DVR) would violate copyright laws.
The judge ruled that a remote-storage DVR would allow Cablevision and its customers to engage “in unauthorized reproductions and transmissions of plaintiffs' copyrighted programs.”
“The RS-DVR is not a stand-alone machine that sits on top of a television,” Chin wrote. “Rather, it is a complex system that involves an ongoing relationship between Cablevision and its customers, payment of monthly fees by the customers to Cablevision, ownership of the equipment remaining with Cablevision, the use of numerous computers and other equipment located in Cablevision's private facilities and the ongoing maintenance of the system by Cablevision personnel.”
Network DVRs lets users store TV shows on a provider’s network rather than on individual set-top-box hard drives. The judge ruled that recordings on a remote hard drive would be unauthorized reproductions.
The studios argued that because Cablevision was hosting the video on its servers, it wasn’t a network DVR, but a video-on-demand service and Cablevision needed permission to “rebroadcast” the programs.
Cablevision argued that its network DVR would not violate copyright laws since it works similar to DVRs in customers’ homes. In fact, Cablevision said it would dedicate separate storage space for each subscriber. In other words, if 500 subscribers decided to record the TV show “Lost,” there would be 500 separate copies saved on the Cablevision network.
Cablevision said it is reviewing the opinion and assessing all of its options, including an appeal.
Content providers are evidently trying to protect their content and possibly try to get TV operators to negotiate separate fees for implementing network DVRs. At the same time TV providers are trying to save money by deploying less expensive set-top boxes to customers and using their own network storage.
Meanwhile, the court decision is good news for TiVo, as well as set-top box makers like Scientific Atlanta and Motorola. As DVRs evolve and become more mainstream, however, it will be difficult to separate VOD from DVR functions. If Cablevision appeals, network DVRs in the U.S. may still be up in the air, however.
{Note: analyst comments are italicized}
For more information, consult our: MRG March 2007 IPTV Bulletin
Hawaii IPTV Service Launches
February 2007
NeuLion announced that its IPTV service was chosen by Hawaii IPTV for its Hawaii Television Network. Hawaii IPTV will deliver live and on-demand content consisting of various Hawaii programming including news, and other local TV shows. Content is delivered over the public Internet, to the Hawaii IPTV set-top box ($150). Customers need a broadband connection to use the service.
The company said that the goal of the Hawaii IPTV service is to “deliver the Hawaii experience to Native Hawaiians and Hawaii expatriates living away from Hawaii.”
For more information, consult our: MRG February 2007 IPTV Bulletin
Ericsson and Arris Bid for Tandberg
February 2007
In late February, Ericsson made a surprise bid for Tandberg Television pitting it against Arris, which announced in January, that it was acquiring Tandberg for $1.2 billion. Ericsson upped the offer to $1.39 billion cash, which is about 10% more than Arris’ offer. Now it’s up to Arris to respond. News reports say that Arris is looking to make a counter offer, but nothing was announced so far.
Last month, Tandberg executives said they were backing Arris’ bid while calling the Ericsson offer "unsolicited." Still, if Arris does want to make a counter offer, it has to go through Ericsson since it owns a large percentage of Tandberg stock.
For more information, consult our: MRG February 2007 IPTV Bulletin
Mergers and Acquisitions
January 2007
Ericsson Acquires Redback Networks for $1.9 Billion
Telco giant Ericsson is acquiring edge router company Redback Networks for about $1.9 billion. Silicon Valley-based Redback has over 700 carrier customers in 80 countries and has some top-tier customers. Fifteen of the top 20 telephone carriers worldwide use Redback's technology, including broadband routers to manage IP-based data, voice and video services.
Arris and Tandberg Merge
Arris and Tandberg announced that they were merging at a deal valued at $1.2 million. The companies said by combining Arris’ VOIP equipment with Tandberg’s IPTV products they will accelerate the combination of voice, video and data products. According to MRG, Inc. Tandberg enjoys about 30% of the global IPTV video headend (encoder) market, with a strong position in Tier 1 and Tier 2 IPTV service providers.
Motorola Acquires Tut Systems for $39 Million
Motorola announced it was acquiring Tut Systems for about $39 million. Tut is a provider of carrier-class digital video encoding, processing and distribution products using MPEG-2 and MPEG-4 AVC video compression. It also provides local ad insertion, forward error correction, and real-time conditioning of video and audio.
For more information, consult our: MRG January 2007 IPTV Bulletin
Tiscali to Relaunch Homechoice as Tiscali TV
January 2007
Tiscali announced that it expects to gain about 500,000 U.K. subscribers in 2007 for its Homechoice IPTV offering. Tiscali acquired Homechoice TV when it bought Video Networks International in August 2006 and will rename the offering Tiscali TV when it relaunches later this year.
Broadband provider Tiscali has about 1.4 million U.K. DSL subscriber users and it hopes to convince more than half of them to add TV services. Tiscali said it plans to have over 80 TV channels including E4, MTV, Paramount Comedy and Cartoon Network, as well as 1,000 VOD movies.
In a survey commissioned by Tiscali of 1,400 users, 42% of respondents believe that today's traditional TV schedules will no longer exist in 10 years. Seventeen percent of users surveyed said they already watch on-demand TV, and 63% want to watch on-demand. Being able to watch movies at any time is so important to British consumers that more than half (51%) would prefer to rent a movie by downloading it through their broadband connection rather than go to a video rental store.
For more information, consult our: MRG January 2007 IPTV Bulletin
Time for Microsoft to Deliver
December 2006
Microsoft’s software deployments are starting to become commercial. Deutsche Telekom and Swisscom started their service in October 2006 and BT started its service in December 2006. AT&T’s service started in June 2006, but did not start to scale until the end of November 2006.
In addition, Verizon had to develop its own software (instead of using Microsoft’s) to support advanced functions such as whole home PVR in its FiOS TV FTTP IPTV service. Verizon uses Microsoft’s middleware for cable companies to manage channel selection. Since Verizon uses a cable like RF architecture for delivering broadcast channels, it does not use the same Microsoft IPTV Edition software that Deutsche Telekom, Swisscom, BT and AT&T do.
2007 will show how well Microsoft’s software operates. The first clue will be whether or not AT&T expands its IPTV service to 10 or more additional markets by the end of 2006, as it had previously promised. The real test will be to see the rate at which these services add subscribers. If these four IPTV services have 100 or 200 thousand subscribers between them by the middle of 2007, then Microsoft will be on its way. If not, then Microsoft may well see its market position slip.
For more information, consult our: MRG December 2006 IPTV Bulletin
Alcatel/Lucent Merged
December 2006
The Alcatel/Lucent merger completed with the resulting companying being called Alcatel-Lucent. The logo itself is the letter L and the letter A mapped into an infinity sign.
Serge Tchuruk of Alcatel will be the Chairman of the Board and Pat Russo of Lucent will be the company’s CEO. The company stated that it will be the number one company in wireline, number three in mobile systems, and in the top three in applications and services. In the presentation it highlight its leading position in IPTV.
Alcatel-Lucent is the number one company in IPTV access systems, both globally and in Europe. It should be able to maintain that position.
It will be interesting to watch the Microsoft relationship. We believe that problems with Microsoft’s software have put a strain on this relationship. Alcatel’s recent video-on-demand patent suits against Microsoft is another sign of this strain. {Note: analyst comments are italicized}
For more information, consult our: MRG December 2006 IPTV Bulletin
Hong Kong Broadband Flat
November 2006
City Telecom saw an in increase of 13 thousand IPTV subscribers for its Hong Kong Broadband Network Systems IPTV service bringing the total number of subscribers to 116 thousand at the end of August 2006.
City Telecom experienced a decrease in its total broadband subscriber base to 220 thousand compared to 227 thousand 12 months earlier. The company stated that it is upgrading its consumer business to less price sensitive and more service oriented customers. Consequently, its consumer broadband revenue increased 23 percent to $95 million.
For more information, consult our: MRG November 2006 IPTV Bulletin
Alcatel/Lucent Merger Approved
November 2006
George W. Bush, the President of the U.S., gave the final approval for the Alcatel/Lucent merger. This approval was based on agreements between Alcatel/Lucent and U.S. government security agencies. Alcatel’s current CEO Serge Tchurik will be the Chairman of the new company and Lucent’s current CEO Pat Russo will be the CEO of the new company.
This approval followed Congressional hearings addressing the U.S. security aspects of the merger. Lucent Bell Labs does significant defense related contracting with the U.S. government. Alcatel/Lucent addressed this by making Bell Labs a separate subsidiary following the merger.
Source: MRG November 2006 IPTV Bulletin
AT&T's Slow Start
October 2006
In its 3Q06 financial announcement, AT&T stated that it had 3 thousand U-verse IPTV subscribers at the end of September 2006. This is up from 1 thousand at the end of June 2006. It stated that it is getting a strong initial response with 85 percent of subscribers taking higher end video packages
AT&T also stated that its U-verse FTTN deployment passed 1.3 million homes at the end of the third quarter of 2006. It is forecasting 2.4 million homes passed by then end of the year.
AT&T is continuing to discuss a Houston launch with HDTV by the end of November 2006 and that it expects to launch about 15 markets within its territory by the end of 2006. It also stated that its initial market entrance and expansion will be deliberate.
Source: MRG October 2006 IPTV Bulletin
Verizon FiOS TV Booming
October 2006
Verizon made a presentation to the financial community to describe the current and anticipated returns from its FiOS FTTP deployment. It has been under pressure to explain why FiOS is worth the heavy investment that it is making.
Verizon is achieving 15 percent penetration of its FiOS service where the service has been available for at least 12 months. It is achieving a monthly churn rate of less than 1.5 percent. It stated that 70 percent of its FiOS subscribers are new to Verizon broadband.
By the end of 2006 Verizon will have two national super headends in operation along with nine regional headends. There will be 292 central offices supporting FiOS services. Verizon will also have video franchises in 300 municipalities that will cover 6.1 million households.
Source: MRG October 2006 IPTV Bulletin
Google Acquires YouTube
October 2006
Google acquired the Internet video content provider YouTube for $1.65 billion in stock even though YouTube had no significant revenue stream itself. YouTube reportedly attracted 57 percent of visits to Internet video sites in September.
YouTube’s popularity made it an attractive acquisition for Google. Google’s mastery over Internet advertising puts it in a unique position to capitalize on YouTube’s popularity.
Source: MRG October 2006 IPTV Bulletin
Free's First Half Results
September 2006
Free, the competitive carrier in France, announced its first half 2006 results. It now has 1.9 million broadband subscribers. It has 1.26 million TV enabled subscribers and had 273 thousand paying IPTV subscribers at the end of the half.
During the first half of 2006, Free introduced HD services and broadcasted French Open tennis matches in HD. It also introduced the ability to record and time shift TV programming on its HD Freebox set-top box.
Source: MRG September 2006 IPTV Bulletin
Shanghai Telecom IPTV Service
September 2006
Shanghai Telecom introduced its IPTV service together with the Shanghai Media Group (SMG). It stated that there are currently 10 thousand subscribers using this service. It expects the number of subscribers to grow to 80 thousand by the end of 2006 and 200 thousand by the end of 2007. It stated that this service will become profitable at 1 million subscribers.
This service will provide 58 channels, 12 from SMG, 15 from China Central Television (CCTV), 20 feature channels, and 9 from other provincial satellite sources. This service will include a time shifted TV service that will provide the ability to replay programs within 48 hours of their initial airing time.
The service will also include 3 thousand video-on-demand and pay per view services. Viewing a film will cost $.25 to $1.25. Viewing each episode of a TV series will cost $.038 to $.125.
For more information, consult our MRG September 2006 IPTV Bulletin
Market Leader Update
August 2006
MRG has just released the latest version of its IPTV Market Leader report. This shows which companies are leading globally and in four regions worldwide within in each of the six market categories we are tracking.
These ratings were based on ranking companies based on the number of subscribers in the 474 IPTV service providers that we have identified globally.
Mergers and acquisitions have had a big effect on these ratings. Tandberg’s acquisition of Skystream put it into a solid number two position globally and number one in Europe and Asia. Motorola’s acquisition puts it into the number one position in set-top boxes. The Alcatel/Lucent merger will put the resulting company in a strong number one position globally.
The conversion of in-house middleware packages to merchant status is the second major trend. PCCW’s Cascade subsidiary has sold its middleware package to True in Thailand. Converting the Cascade middleware to merchant status put it into the number one position globally.
Lucent has taken over the support of Telefonica’s in-house developed middleware software. Lucent is starting to aggressively market this software as a product, at least to Telefonica subsidiaries in Latin America.
The IPTV market is still forming. We expect that these ratings will continue to change significantly as the Market matures over the next couple of years.
{Note: analyst comments are italicized}
For more information, consult our IPTV Market Leaders Report - Sept. 2006
Source: MRG August 2006 IPTV Bulletin
Verizon Under Siege
August 2006
Verizon lost 4.2 million switched access lines in 2005, which is more than twice the 1.9 million switched access lines that AT&T, BellSouth, and Qwest lost together.
While AT&T and BellSouth have been successful in reducing the rate at which they are losing switched access lines in 2004 and 2005, Verizon took a big turn for the worse in 2005.
Verizon has very strong cable competition, particularly Cablevision in the New York area that has had quite successful VoIP offerings
For more information, consult our MRG August 2006 IPTV Bulletin
Free's Q2 Results
August 2006
The number of broadband subscribers at Free in France grew from 1.8 million to 1.9 million at the end of June. The number of IPTV capable subscribers grew to 1.4 million. The company now has 273 thousand subscribers paying for at least one IPTV service. Its subscribers have purchased 803 thousand video-on-demand features since it was introduce in December 2005.
Source: MRG August 2006 IPTV Bulletin
Cisco to Acquire Arroyo
August 2006
Cisco agreed to acquire video-on-demand system company Arroyo Video Solutions. This extends Cisco’s IPTV coverage into a new market segment and puts it directly into competition with Microsoft.
Arroyo has been focusing on the U.S. cable market and we have not identified any IPTV deployments. Arroyo’s strategy is to focus on personalization, which plays on a real IPTV strength.
The question now is what Cisco will do so that it can compete head-to-head with the Alcatel/Lucent/ Microsoft colossus. Middleware is the key missing element, but Content Protection/DRM is important as well. Cisco is an investor in leading Content Protection/DRM company Widevine.
{Note: analyst comments are italicized}
Source: MRG August 2006 IPTV Bulletin
Motorola to Acquire Broadbus
July 2006
Motorola announced that it would acquire Broadbus to round out its video offerings. Broadbus’ strong position in the U.S. cable market makes it a good addition to Motorola.
Broadbus is using its success with the cable providers to enter the IPTV video-on-demand market. It has 85 cable deployments and stated that it deploys with a tier one carrier in the U.S.
Broadbus uses solid state memory to distribute video-on-demand content from a central disk based library. It stated that it can support 100 thousand streams with six servers and 112 disk drives. Adding time shifted TV to this service would double the system to support 200 thousand streams with 12 servers. The number of disk drives would grow to 154.
The company states that the replacement of disk drives with solid state memory reduces facility costs such as power, space, and cooling by over 80 percent. It also states that its system will reduce the number of software upgrades by more than 90 percent. It has found that these savings can reduce OpEx by about 50 percent.
Source: MRG July 2006 IPTV Bulletin
Sky Offers Free Broadband
July 2006
It seems that offering certain components of an IPTV triple play offering for free is a common strategy. Free, of course, means that it is included in the base price of the bundle. Often a basic set of broadcast channels or VoIP services are offered for free.
In a new twist on this strategy, BSkyB, the satellite video provider is turning it on its head. It will provide a free broadband connection for subscribers to its video service. The range of services offered is given below:
Monthly Price |
Download Speed |
Monthly Allowance |
Free |
2 Mbps |
2 GB |
$9 |
8 Mbps |
40 GB |
$18 |
16 Mbps |
Unlimited |
This is a disruptive strategy that repositions BSkyB from a single play video provider to a triple play provider all at once. Its offer of a basic broadband service for free to all video subscribers will be very attractive to the mass market that has not yet committed to broadband. These people know they should have broadband and the ability to get it for “free” will cause many of them to make the move.
This is a direct challenge to the new BT service which is based on free digital terrestrial content and to its 21st century VoIP strategy. It raises the ante against the consolidating cable companies. It also makes it much tougher for the competitive IPTV companies such as Orange and Video Networks.
It seems likely that Sky in Italy will also adopt this strategy to fight off competition from Telecom Italia, FastWeb, and the new digital terrestrial services.
This is also a logical strategy in the U.S. Echostar seems to be exploring its own broadband alternative, including WiMAX technology. Echostar may well find an attractive broadband offering in the U.S. necessary to counter increasing competition from the cable and the IPTV companies.
{Note: analyst comments are italicized}
Source: MRG July 2006 IPTV Bulletin
AT&T Introduces IPTV
June 2006
AT&T introduced its U-Verse IP TV service to 5,000 homes scattered across San Antonio. It is priced at $69 to $124 per month with a family oriented bundle at $54 per month. A Spanish language package is available for an additional $10 per month.
AT&T offers over 200 channels along with a data service with speeds of 1.5 to 6 Mbps. The service comes with three set-top boxes, one with DVR capability. The standard installation fee is $95.
AT&T also introduced its Homezone service that combines Echostar video content with video-on-demand delivered over a DSL line to a 2Wire set-top box.
AT&T plans to introduce its U-Verse service in 15 to 20 markets by the end of 2006. It has not set a date for a full market launch in San Antonio or for any other market. It has stated that it will introduce the service in Houston, Texas.
This is a tentative rollout that appears to be a continuation of its technical trial. We believe that it would have made a much larger introduction if it were holding a full market trial.
{Note: analyst comments are italicized}
Source: MRG June 2006 IPTV Bulletin
Ericsson Introduces IPTV
June 2006
Ericsson introduced its IP TV offering at Globalcomm with a formal partnership with Kasenna who will provide its video-on-demand and middleware products. This offering will use Ericsson access systems and support broadcast and video-on-demand services.
In its next phase in 2007, the company plans to add IMS support to its IP TV offering in order to support both communications services and TV services.
The third phase of its implementation in 2008 will include convergence with mobile networks, including services that support both mobile and IP TV devices.
At Globalcomm, Ericsson showed a DLNA based demonstration with products from Sony.
Ericsson comes to the IP TV market later than the other major telecom suppliers such as Alcatel, Lucent, and Siemens. It faces the same problem as Siemens – it must overcome Microsoft’s dominance with large service providers.
Ericsson is taking a smart approach and leverage its mobile and IMS experience. It seems clear that mobile technologies will be increasing in IP TV networks, and Ericsson is well positioned to take advantage of that.
{Note: analyst comments are italicized}
Source: MRG June 2006 IPTV Bulletin
Siemens and Nokia to Merge
June 2006
Siemens and Nokia became the latest pair of major telecom suppliers to announce a merger. This follows hard on the heels of the Alcatel/Lucent Merger announcement in April 2006.
Nokias Networks division will merge with Siemens Carrier division. Both of these organizations offer Wireless and Wireline services and have aggregate revenue of €15.8 billion. They stated that 78 percent of these revenues are from wireless networks and 22 percent from wireline. The companies expect cost savings of €1.5 billion.
The resulting organization will be owned 50-50 by each company and will be headquartered in Helsinki. Most of the top level executives will come from Nokia.
The companies included IP TV as one of the leading market segments that the combined company will address.
The merger will not improve Siemens position in the MRG Market Leader Report. We have not identified any Nokia products in the IP TV market segments that we track in this report.
We expect that the resulting company will continue to put a high priority on IP TV, given the importance of IP TV in the service provider market today.
This merger together with the Alcatel/Lucent and the Ericsson/Marconi mergers will put significant pressure on Nortel, Cisco, NEC, and Motorola, as well as smaller companies such as Tellabs, Fujitsu, and Hitachi to find merger partners.
{Note: analyst comments are italicized}
Source: MRG June 2006 IPTV Bulletin
Siemens IPTV Home Equipment
May 2006
Siemens offers a line of home gateways that support VoIP and WiFi. Siemens has found that 802.11g WiFi is not sufficiently robust for IP TV video traffic. The company does expect that 802.11n will resolve these issues.
Siemens stated that both power line and polymer optical fiber (POF) will be popular methods for networking homes for IP TV. POF is a very thin fiber strand that can be deployed by the home owner. It is unobtrusive and can be easily hidden under rugs or other places. POF does not have the interference problems found with either wireless or power line systems.
Siemens also demonstrated its Tango customer equipment network element manager. Tango can manage both Siemens and non Siemens cust |