Driving on the Two-Way Street
Telcos Target Subscribers, Revenue With Apps
by Todd Spangler -- Multichannel News, 9/28/2008 8:00:00 PM
Video services from telephone companies to date have been me-too offerings designed to be at least as good as cable.
But an Internet protocol TV platform, built on a fundamentally two-way communications medium, is supposed to provide more flexibility than traditional cable video-delivery networks for all kinds of interactive services —ranging from multiplayer games to chats on the TV.
“Telcos have been very busy making the IPTV experience reliable, and ensuring it’s a quality experience,” said Pankaj Gupta, senior manager for video marketing in Cisco Systems’ service provider group. “Now that they have confidence, they’ll move forward on interactivity.”
What a service provider sometimes neglects when it deploys interactive applications is a plan to make money from them, said Steve Tranter, vice president of broadband and interactive for NDS Group, a provider of pay TV infrastructure software.
“Interactive-TV applications are often locked into the strategic bucket,” he said. “But you really want some kind of application that will generate direct revenue.”
Standalone games, like checkers, are a good starting point, Tranter said. These can even be sponsored in conjunction with a programmer. BskyB in the U.K., for example, offers games that are co-branded with MTV Networks’ Nickelodeon.
Gupta predicted that personalization will be a major driver for money-generating interactive applications.
“Everybody wants to merge Web 2.0 experiences with the TV, and they are just taking the steps now in understanding the monetization portion of it,” Gupta said.
A hard-core Boston Red Sox fan would be willing to pay 99 cents extra to get, say, a Red Sox screensaver for their TV, he said, noting that wireless carriers have created a thriving business selling ringtones.
Another example from Gupta: A subscriber could create his or her own IPTV channel based on keywords that pull in syndicated video clips from multiple sources.
IPTV providers already offer a range of interactive apps on the TV. But for now, they’re mostly thrown in for free, to distinguish their services from cable.
AT&T, the largest IPTV provider in the U.S., offers U-bar, a collection of games (like Sudoku and chess), news, weather and yellow-pages information.
The telco also launched an interactive fantasy football application with Yahoo that lets U-verse TV customers receive updates on National Football League players and stats on their televisions. That’s available at no extra charge, and for an additional $9.99, Yahoo offers StatTracker, which delivers live player, team and league statistics on the TV.
Clearly, AT&T intends to provide a much bigger bouquet of personalized features through its IPTV platform. Peter Hill, vice president of video and converged services at AT&T Labs, demonstrated a range of such concept applications at an event in New York earlier this month.
In one, he pulled up a mosaic showing six live video feeds from webcams stationed at key points for his Atlanta commute. A user would set up the route beforehand on a PC. For now it’s just an idea: “We’re looking at the art of the possible,” Hill said.
One of the big challenges for ITV developers is to make media “meaningful to someone with a remote,” said Marty Stein, senior marketing director for Motorola’s IP video solutions group.
Once that design hurdle is overcome, “things that make sense on the TV will start naturally migrating over the TV,” he said.
Amino Communications, a manufacturer of set-top boxes and software, is pitching a “merchandising solution” to IPTV providers, which will analyze subscriber video-on-demand purchases and suggest additional titles. Amino in June acquired AssetHouse, a U.K. company that developed the suggestive-selling software for pay TV.
“If you have a family that watches three Spider-Man movies in a week, you’ll want to be able to market a different kind of movie to them than the family that watches three Shakespeare plays in a week,” said Roy Kirsopp, Amino’s vice president and general manager.
Nortel Networks, meanwhile, has focused on communications-oriented ITV applications, which blend voice and video. The vendor’s Communications Module 9520, to be available by the end of 2008, provides control of communications and telephony features on TV, such as letting users divert calls to voicemail or a cell phone with a click of the remote.
“The key is, it works with the existing telephony solution you have in the home,” said Grant Hall, Nortel’s leader of video solutions marketing.
But layering multiple applications on top of the network also requires careful planning and testing, to ensure that changes to the network don’t interrupt the existing services, said Scott Heinlein, Juniper Networks senior marketing manager for service providers.
“When you implement IPTV, at first, that’s the only service on the network,” he said. “But what happens when you add a gaming-on-demand service? As you add services, the network can become complex.”
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