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IPTV Pioneer Now Going OTT

Carol Wilson
9/28/2011

ORLANDO -- Digital Home Summit -- Ringgold Telephone Co. Inc. , a tiny independent telco in northeastern Georgia, pioneered IPTV deployment in 2003, years ahead of larger telcos such as AT&T Inc. (NYSE: T) and Verizon Communications Inc. (NYSE: VZ). Now Ringgold is trying to pioneer what comes after IPTV, having pulled the plug on the service without ever seeing a single dollar of profit from video.

Ringgold is finding profit in reselling Dish Network LLC (Nasdaq: DISH)'s video service and is considering a holiday offer that would combine a free Roku Inc. , Apple Inc. (Nasdaq: AAPL) or Clearleap -powered box for OTT video alongside the installation of an off-air HD antenna for free broadcast channels available to customers who sign a long-term contract for Ringgold's broadband service.

The idea is to get them to cut the cable cord, says Phil Erli, EVP of Ringgold, who spoke here yesterday. Erli and Ringgold went all-in with its IPTV service, offering one of the first telco video-on-demand (VoD) services and producing local content that included high school sports, talk shows, fitness programs and dramatic programming about the history of the region.

Now Ringgold is helping its customers decide if OTT video is right for their needs with a new online tool.

"We know we have to make this simple for them," he says. "It's too easy to just turn on the TV and let the cable company handle it. We want them to understand they have a lot more control than they might think."

IPTV headaches
The major problems with IPTV largely fell into two categories: middleware that was available and affordable for Ringgold didn't rise above the "me-too" level for what local cable was offering; and retransmission costs ate up any potential profits, Erli says.

He cites a local NBC affiliate that insisted on a contract that ultimately would cost Ringgold Tel $5.25 per month, per subscriber -– that one expense would eat up any possible profits.

"These weren't negotiations, they told me what we would pay," Erli says. "This business just doesn't scale, not as long as a local provider can stick a gun in your ribs and say, 'Give me all your money.'"

Ringgold started with Minerva Networks Inc. middleware, and couldn't get the DVR and HD capabilities it wanted ahead of the local cable operator. Erli explored other options, including Microsoft Corp. (Nasdaq: MSFT)'s Mediaroom, but that approach required too many servers to be cost-effective for a small telco.

The telco targeted 30 percent penetration for its video service, delivered in part over a fiber-to-the-home (FTTH) network, but never hit that the number because, as Erli admits, its video product was "mediocre."

Ringgold retained more than half of its IPTV customers when it switched to Dish, and some of those who were angered and left the service for cable have come back, Erli says. He believes the rising cost of pay TV will lure even more back to an OTT offering, especially when it's paired with HD broadcast, which pulls in the major networks and about 12 total stations in the Ringgold area, and with a growing amount of content viewable online.

— Carol Wilson, Chief Editor, Events, Light Reading

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Jeff Baumgartner
Jeff Baumgartner
12/5/2012 | 4:52:27 PM
re: IPTV Pioneer Now Going OTT


Interesting story.. they sound like a candidate for Sezmi's new approach, if it's not too late.  But suspect Sezmi will need alot of Ringgold's to make its idea work.


Sezmi Dumps No-Frills Pay-TV Service: http://www.lightreading.com/document.asp?doc_id=212679&site=lr_cable&f_src=lightreading_gnews


JB

DCITDave
DCITDave
12/5/2012 | 4:52:19 PM
re: IPTV Pioneer Now Going OTT


I think a combo of over-the-air channels and over-the-top video is most of what most people want in a TV service. And it would create demand for broadband, which is the service provider's flagship consumer service.


Pay TV and IPTV are generally over-rated and, unless you have the money to shovel at the problem like AT&T and Verizon, there are probably better ways to give customers much of the same functionality without having to rebuild your plant.


This year's TelcoTV event might become famous for being the year that many small- to mid-sized Telco's said 'no thanks' to traditional pay TV.

cnwedit
cnwedit
12/5/2012 | 4:52:18 PM
re: IPTV Pioneer Now Going OTT


The one thing you have to do is commit to their broadband over the long term - don't know what that term is, yet.

DCITDave
DCITDave
12/5/2012 | 4:52:18 PM
re: IPTV Pioneer Now Going OTT


If I could pay them for broadband, a small install fee and get rid of a monthly TV bill (outside of the occasional movie rental), I'd do it.


All you'd need is a capable DVR (not expensive) and you could enjoy a cable-like Pay TV experience at for just about $0 each month. How cool is that?!

cnwedit
cnwedit
12/5/2012 | 4:52:18 PM
re: IPTV Pioneer Now Going OTT


What makes Ringgold's approach interesting is that they are giving their customers a chance to check out how OTT/broadcast combo might meet their viewing needs before they make the leap.


And they are considering offering to install the antenna and help set things up so customer knows what's what.  I think it's the set-up that keeps some folks from looked at connected TV options.

DCITDave
DCITDave
12/5/2012 | 4:52:17 PM
re: IPTV Pioneer Now Going OTT


Not hard to do. I'd rather pay more than average for bb and get free TV.


With U-verse, you end up paying $200+ a month no matter what choices you make. 


They charge DVR fees, HD fees, programming change fees and loads of other hidden charges and the discounts offered for subscribing to more than one service aren't great.


The service IS great, though. I can't complain about that. But, whew, I wish I had a less expensive option.


ph

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