It's time to close the knowledge gap that currently exists in the potentially large market for offering video-based services over telecom infrastructure.
Right now, plenty of network operators are intensely interested in the idea – but for most of them, video services are uncharted territory. They want to get comfortable with the technology and business concepts behind the notion, and in order to do that they need to get familiar with the vendors in the marketplace.
This report aims to address this issue and, in doing so, help everybody in the video service supply chain move forward. It provides a reference work for service providers trying to find their bearings, by identifying the main elements of a typical telco video network, defining product categories, and listing vendors in this field.
This report is part of Light Reading's series of Who Makes What reports. Like the others, it provides a way for the industry itself to help refine the proposed taxonomy and ensure that the list of vendors for each product category is comprehensive.
In order to contribute, simply post your suggestions on the message board linked to this article. This is the preferred input method, but you can also contribute by email, addressed to editors@lightreading.com. Please include "telco video" in the subject field to help us find messages.
We will update the report in response to messages, so if your company has been left off any of the lists by mistake, or you have comments about the taxonomy, please get in touch. The initial version of the report represents our best effort at producing a directory, but we need your input to make it comprehensive.
As with other Who Makes What reports, this is the first stage of a survey. Once the report has reached a point when no further reader comments are coming in, Heavy Reading, Light Reading's market research division, will use the taxonomy and lists of vendors as the basis of a market perception survey. This will establish which vendor names are recognized as suppliers of different telco video product categories by service providers. It will also establish which are considered market leaders in terms of price, performance, and service and support.
Taxonomy Focus
This report focuses on vendors whose products explicitly support the deployment of video services over telco networks; it does not include network equipment with a broader remit than video, since those products were covered in Who Makes What: Infrastructure Equipment, published a short while ago.
Although there is increasing activity in the telco video space today, the market is nascent in terms of its commercial relevance as a revenue stream for operators. As such, this is a critical time for the video-specific vendor community, which can be roughly divided into two principal types of organization:
Companies with established reputations in other disciplines, which have expanded their product portfolios (through development or acquisition) to include video, and which can sustain themselves through other activities as the telco video market develops
Companies set up to specifically address the video market, for which survival may depend on the rapid development of a flourishing market for video-specific technology
This leads to an interesting characteristic of the telco video taxonomy – that it includes some of the best-known names in the telco industry, coupled with a plethora of companies that will today be unfamiliar to most telco professionals.
We have segmented the market for video-specific services technology into six key areas, as indicated by the links below. Equipment may be located either in a video services headend, at interstitial points in the distribution network, or at the customer premises. Some vendors supply discrete components, others offer multiple elements, and some offer end-to-end solutions. As a result, several vendors have a presence in more than one category.
Page 2: The Big Picture What a typical telco video network looks like
— Huw Price-Stephens is an independent consultant with 20 years of IP applications experience. He's best known in the telco video space as the CTO of Yes Television, a U.K. middleware company founded in 1996 to develop IPTV solutions for the telco community. Prior to Yes TV, Huw was involved in several of the largest telco VOD trials, and his early career focused on engineering applications in the areas of IC CAD and medical imaging.
Price-Stephens is collaborating with Light Reading and Heavy Reading on a number of projects, including a series of Webinars, a Light Reading Live conference and two Heavy Reading reports, all on telco video topics.
Lets assume that you are correct about everything that you have said so far. Lets also assume that in 2-3 years Verizon will have connected all the people in their highly competitive areas, representing 1/3 of their total network.
They have now spent how many Billions and achieved what take rate in those highly competitive areas? Given that they are highly competitive the effort required to achieve a decent take rate is much higher and needs greater focus (ie: they have mainly forgotten about 2/3 of their network and spent nothing on keeping those customers). The video that they are/will be offering isn't really there yet because they are trying to do it all on their own.
So what do they do with the remaining 2/3 of their network customers...? No plans for any bandwidth improvement for at least the next 2-3 years while they get those highly competitive, but no guaranteed take rate, people connected... Sounds like they built a superior network and nobody came. If they share your view on the business case they are sitting idle in 2/3 of their network allowing the cable companies to gain entertainment revenue in those areas unchallenged to fight in the competitive areas.
It appears that there are no new sources of revenue for Verizon, they are losing marketshare in voice to broadband VoIP, they are spending Billions to build a superior network... All I see is reduced money coming in and lots more than usual money going out. This is why I still don't see the business case for telco IPTV.
Doesn't sound like a slam dunk to me. The people in Verizon are smart so I'm obviously missing a great deal here.
Because they have shareholders that are their primary concern. Moving to the utility model will be bad for their profit.
Can't they set the rates so they are a close enough to being even with voice reveneus and in a manner that grows as bandwidth usage grows? Particularly now that they aren't being economically regulated for "information services."
Unless you want to go back to Rate of Return AND allow them to plow as much money as they want into the ground. We would sell lots of equipment, but phone service would be $1M/month.
I believe we need a model that promotes investment into infrastructure. I don't think that requires $1M/month phone bills.
2-3 more years to cover 1/3 of their network...? I'll believe that when I see it. 'Passing' doesn't count, people have to be connected to the system. Again the questions still stand: How much expense and what is the take rate? What other services are capable of being put into the ONU? Is the extra hardware for these new services stuff that the customer takes with them when they move (eg: if there is no expansion capability built in to the ONU then automatic meter reading won't work for the utility)?
Are the ONU's plugged in to a wall socket? How much battery power is available in the case of a power outage? Can E911 calls get through in the case of a power outage? This is also an issue with VoIP via cable modems but would be a nice differentiating feature for telcos if it was possible.
Do the ONUs have fixed-mobile convergence addressed? If not this keeps the door open for a mobile provider to team with a cable provider as mentioned before, particularly in highly competitive areas. Bell Canada is particularly vulnerable to this with Rogers in their back yard.
Because they have shareholders that are their primary concern. Moving to the utility model will be bad for their profit.
Unless you want to go back to Rate of Return AND allow them to plow as much money as they want into the ground. We would sell lots of equipment, but phone service would be $1M/month.
How long before the superior networks reach the majority of their serving area? How long for 75%? How much marketshare will they lose to cable in that time? How much will be spent to make this happen? What is the necessary take rate to make the installation pay for itself? Optics is certainly best but it is also incredibly expensive.
One carrier veteran told me that Verizon would be quite financially stable if they lost 50% of their customers...as long as they could chose the 50% (those who take extra features like voicemail, call waiting, etc. are termed high-margin customers. Those who take no extra services are basically 'break-even'). Unfortunately for the carriers the people who go VoIP are in the high-margin 50% that they would rather not lose.
If cable carriers manage to bring in a wireless network provider to the fold, and thereby offer 4-play services (voice, video, data, & wireless), it may not matter if fiber is available in your area. The telcos better have some great 'commercial' solutions ready or its over.
If worse comes to worse for the telcos they could supply the wireless networks for the cable providers...
IPTV is a strange product, especially for cable providers. Its existance implies that people can get TV over broadband networks, whether those networks are cable or twisted pair. The telcos will hope that IP-based-Blockbuster's will cause consumers to cancel their cable TV subscriptions in the same manner as VoIP is causing some telephone customers to cancel their voice subscriptions.
Every household with broadband Internet access, of any sort, represents a potential land-line revenue loss for the telco (to either the telco's broadband group or a cable competitor) and a potential broadcast TV revenue loss for a cable company (either to IPTV-over-broadband cable or DSL).
The business case of Telco Video goes like this: Either do it or lose all your customers to cable who will offer every service you have at a lower price point and subsidize it with video. Imagine you are SBC and have no customers, what is your stock price?
and/or
...you are spending Billions to build an inferior network.
So it is quite conceivable that the RBOCs will spend Billions to build an inferior network and still lose all their customers...? I didn't say that I was doing optical ADMs.
Hello, Optics in the Access is exactly what you are talking about not doing. Other than that you are spending Billions to build an inferior network. The copper connection TODAY is 18kft or less.
Only 60% of homes are computer homes. The rest do not have PCs to use. Fewer have PCs hanging around (and old PCs would be better given to schools right?). Many brand new TVs can take S-input. It is like reminding oneself that even making homes "cable ready" is a phenomenon of the last 10 years or so.
No, 802.11g has in a perfect case 54Mbps. In a home with a Microwave and insulated walls it has a lot less.
HDTV in MPEG4 is more 8 - 12 Mbps for quality video that content providers will allow you to transmit.
The business case of Telco Video goes like this: Either do it or lose all your customers to cable who will offer every service you have at a lower price point and subsidize it with video. Imagine you are SBC and have no customers, what is your stock price?
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