Abstract
Content is an important tool that IP TV service providers can use to increase
the competitiveness of their services and to increase customer spending.
Content is the essence of these services; consequently, better content will
improve the experience of the viewer and the attractiveness of the service.
Content strategies must be developed with local market conditions clearly in
mind. The content of competitive services and the viewer's willingness to pay
are important factors that will determine the success of an IP TV content
strategy.
1.1 IP TV Market Environments and Strategies
There are two general market environments for IP TV services. The first is the
North American environment where about 90 percent of all homes are already
served by cable or satellite. This also is the case in parts of Europe that
include the Benelux countries, Scandinavia, and Austria. A few countries in
Asia such as Korea also fall into this class.
The service providers in this type of market are using IP TV services to
defend themselves against strong cable competition. They are trying to
increase their broadband market share and reduce or eliminate their rate of
loss of residential subscribers. Triple and quadruple play bundling strategies
that include voice, data, TV, and possibly mobile will be important packaging
and pricing strategies for this market.
The second market environment is one where the free, over-the-air, broadcast
channels predominate and cable and satellite have a low level of penetration,
say 30 percent or less. This is typical of most of the large European
countries such as France, Italy, and Spain. In Asia, both Hong Kong and Japan
fall into this category. The UK falls between these classes and will be
treated as part of the second, because the majority of homes are without cable
or satellite.
This market provides opportunities for the service providers to develop the
video market. While the level of competition in these markets is low, user
resistance to spending for TV services is high. The problem for the service
providers is to overcome this resistance.
1.2 Content Types for IP TV Networks
IP TV networks may offer the following types of content in the future:
Over-the-air broadcast channels that have been broadcasting TV content, in
many markets for more than 50 years. They are well established and provide
some of the most popular entertainment, news, and sports programming. National
channels that were typically developed for cable networks, especially in North
America. These channels are national or international in scope and carry
content of broad interest, including movies, drama shows, lifestyle
programming, and sports. Premium broadcast channels that the subscribers pay
for in addtion to the basic service, including movie channels, such as HBO and
Starz! in the U.S. Video On Demand (VOD) that includes films offered for a
fixed fee with trick play functions. Subscription Video On Demand that
provides the unlimited ability to watch a set of content such as HBO On
Demand. Free On Demand (FOD) content that is offered without any charges.
While there is little or no advertising associated with it today, expectations
are that Free On Demand will be supported with advertising in the future.
Network PVR (NPVR) that provides the ability to gain access to previously
broadcast programming. Interactive content that includes voting on shows like
American Idol; and where winners are selected based on audience participation,
the ability to participate in game shows, and to solve crimes on the CSI show.
Games on the TV that are for the casual player that has not installed a game
console. Internet Video Content that comes from Yahoo!, Google, and Internet
video content providers.
1.3 Service Provider Content Strategies
The content strategies adopted by IP TV service providers differ significantly
in different markets around the world. This report examines the content
strategies used in the following markets:
- Hong Kong is the most advanced IP TV market, in terms of penetration. It
appears that there will be more IP TV subscribers than cable subscribers in
this market by the middle of 2006. PCCW, the incumbent carrier, and City
Telecom, a broadband competitive carrier, both offer IP TV services. PCCW
offers a basic IP TV service at no additional charge to the viewer. City
Telecom offers the first year free. This approach has removed the barriers to
entry and caused the IP TV market to grow at a rapid rate.
- France is the most developed IP TV market in Europe. There are three
strong IP TV providers - France Telecom, Free, and Neuf. France Telecom and
Neuf offer a basic IP TV subscription at € 7.00 per month and € 6.00
per month, respectively. Free includes IPTV as part of its basic broadband
service. These low prices have helped to generate significant growth in
France. s in this market by the middle of 2006. PCCW, the incumbent carrier,
and City Telecom, a broadband competitive carrier, both offer IP TV services.
PCCW offers a basic IP TV service at no additional charge to the viewer. City
Telecom offers the first year free. This approach has removed the barriers to
entry and caused the IP TV market to grow at a rapid rate.
- Japan has three service providers offering IP TV service, NTT, KDDI, and
Softbank. It appears that Softbank is leaving the IP TV market in favor of its
TV Bank Internet video offering. KDDI has the only mature IP TV service and
achieved only 15 percent penetration, with a relatively high entry price of
$22 per month.
- North America has one of the highest penetrations of cable and satellite
services in the world, with approximately 90 percent of households served.
There is a strong acceptance of pay TV services in North America, so the
prices of basic packages are higher than in many other parts of the world. The
problem in North America is to convince consumers that IP TV is a superior
alternative. Having a stronger content offering will be a key part of a
successful IP TV strategy in North America.
1.4 Consultants and Content Aggregators
There are a number of companies that provide assistance to IP TV providers in
acquiring content for their IP TV services. These media consultants help IP TV
service providers to acquire, package, and promote content. Other consultants
may help with the deployment of the networks required to support these
services.
The content aggregators provide content to IP TV service providers. Some of
them, provide on demand and pay per view content. Others, offer broadcast
content in the U.S. These companies negotiate agreements with the studios and
othe content producers that allow them to resell this content. These
aggregators may be the only choice for smaller IP TV providers that find it
difficult to get the studios to negotiate with them. They are also a
convenient source of content for large service providers that appreciate the
easy access to content that the aggregators provider while they negotiate
their own deals with the studios and other content producers.
1.5 New Content Strategies There are several forms of emerging content that
may be important offerings in the future. The general categories are
interactive content, Internet content, and games.
All these new forms of content and are still under development. Interactive
content and games have been deployed on cable or broadcast networks, so
development has been done on them already. Internet content is a new
phenomenon that holds significant promise for IP TV networks, but work is just
starting in that area.
Table of Contents
1 Executive Summary
- 1.1 IP TV Market Environments and Strategies
- 1.2 Content Types for IP TV Networks
- 1.3 Service Provider Content Strategies
- 1.4 Consultants and Content Aggregators
- 1.5 New Content Strategies
- 1.6 Developing Winning IP TV Content Strategies
- 1.7 Opportunities, Risks, and Recommendations
- 1.7.1 Opportunities
- 1.7.2 Risks
- 1.7.3 Recommendations
2 IP TV Market Environments and Strategies
- 2.1 Pay TV Markets
- 2.1.1 Preemptive Strategies
- 2.1.2 Head On Strategies
- 2.2 Free TV Markets
- 2.2.1 High Barrier to Entry
- 2.2.2 Medium Barrier to Entry
- 2.2.3 Low Barrier to Entry
- 2.3 Content Types for IP TV Networks
- 2.3.1 Over-the-Air Broadcast Channels
- 2.3.2 National Channels
- 2.3.3 Premium Broadcast Channels
- 2.3.4 Video On Demand
- 2.3.5 Near Video On Demand
- 2.3.6 Subscription Video On Demand
- 2.3.7 Free On Demand
- 2.3.8 Network PVR
- 2.3.9 Interactive Content
- 2.3.10 Internet Portals
- 2.3.11 Games
- 2.3.12 Internet Video Content
3 Service Provider Content Strategies
- 3.1 Market Based Content Strategies
- 3.1.1 Hong Kong
- 3.1.2 France
- 3.1.3 Japan
- 3.1.4 North America
- 3.1.5 Pay TV Markets in Europe
- 3.1.6 Free-to-Air Markets in Europe
- 3.2 Service Providers
- 3.2.1 Belgacom
- 3.2.2 FastWeb
- 3.2.3 France Telecom
- 3.2.4 Free
- 3.2.5 Hong Kong Broadband Network/City Telecom
- 3.2.6 KDDI
- 3.2.7 Manitoba Telecom Services
- 3.2.8 Namesco
- 3.2.9 Neuf Telecom
- 3.2.10 NTT/Sky PerfecTV
- 3.2.11 PCCW
- 3.2.12 Softbank
- 3.2.13 SureWest
- 3.2.14 Telekom Austria
- 3.2.15 Verizon
- 3.2.16 Video Networks
4 Consultants and Content Aggregators
- 4.1 Media Consultants
- 4.1.1 3Vision
- 4.1.2 Associated Media Group
- 4.1.3 IBM
- 4.2 Content Aggregators
5 New Content Strategies
- 5.1 Content Providers
- 5.1.1 Global Digital Broadcast
- 5.1.2 Gotuit Media
- 5.1.3 Narrowstep
- 5.1.4 TANDBERG Television
- 5.1.5 Zodiac Gaming
6 Developing Winning IP TV Content Strategies
- 6.1 Characterize the Market
- 6.2 Characterize the Competition
- 6.3 Identify Resources
- 6.4 Develop Content Strategy
- 6.5 Develop Promotion Strategy
- 6.6 Develop Content Enhancement Strategy
7 Opportunities, Risks, and Recommendations
- 7.1 Opportunities
- 7.2 Risks
- 7.3 Recommendations
Table of Figures
- Figure 3-1: Belgacom's Packages and Pricing
- Figure 3-2: France Telecom's Packages and Pricing
- Figure 3-3: Free's Packages and Pricing
- Figure 5-1: Asset Selection Screen
- Figure 5-2: Playlist Selection Screen
- Figure 5-3: Selected Highlight Screen
- Figure 5-4: Narrowstep iTV Channel itv
Table of Tables
- Table 2-1: Service Provider IP TV Entry Pricing in Japan
- Table 2-2: Service Provider IP TV Entry Pricing in Europe
- Table 2-3: Service Provider IP TV Entry Pricing in Europe
- Table 3-1: Service Provider Summary
- Table 3-2: MTS Package Pricing
- Table 3-3: Neuf's IP TV Service Options
- Table 3-4: NTT/Sky PerfecTV IP TV Service Options
- Table 3-5: PCCW's IP TV Service Options
- Table 3-6: SureWest's IP TV Fiber Based Content Offerings
- Table 3-7: Telekom Austria's Channel Lineup
- Table 3-8: Verizon's IP TV Fiber Based Content Offerings
- Table 3-9: Video Networks' IP TV Fiber Based Content Offerings
- Table 5-1: Providers of New Forms of Content
