OTT content -- how to integrate it, compete against it, or learn from it -- was the biggest theme at TelcoTV this year, and the takeaway was that pay-TV providers have to find a way to integrate it, or else risk being cannibalized by it.
Hybrid approaches that include an OTT addition to linear TV emerged as one viable option for IPTV providers.
That's the model that Entone Inc. introduced at the show and the one startup Skitter Inc. is based on. Toledo Telephone is one of the few telcos to embrace OTT delivery for its pay-TV service, and even COO Dale Merten admits that he'd be interested in going hybrid. (See Entone Crafting VUDU-Powered Cable Boxes .)
"For our customers, they have an increasing resistance to paying $70 to $80 for channels they don't watch," Merten said on a panel. "I like the Skitter model. A large portion of customers would rather pay $10 per month for a single provider with an OTT overlay."
Viewing the mobile phone as just another TV screen was another sentiment common amongst telcos in attendance. Verizon Communications Inc. (NYSE: VZ) introduced Flex View, its cloud-based on-demand service for mobile viewing, while most of the other service providers were deep in the discussion phase. (See Verizon FiOS Gets Flexible.)
The roadblock stopping most from making the leap to mobile is the business model, according to Ric Brovedani, senior director of strategic solutions at Alcatel-Lucent (NYSE: ALU). They see the value, but don't know how to translate it to profits. As such, most are first addressing the PC screen before they go all the way. (See What to Do About FLO TV?, TelcoTV's Smaller Screen, and TelcoTV 2010: Pay TV Shows Multi-Screen Appeal.)
"It all boils down to understanding and addressing consumer experiences," Brovedani said. "The growth of mobile is only because in the recent years we got compatible devices, like the iPad and other tablets. We'll see more video content take off there that will drive people towards integrated solutions."
Speaking of tablets... the consensus was that widgets could enhance TV viewing, but there was also a debate brewing over whether they belong on the TV or just the tablet.
Motorola Inc. (NYSE: MOT)'s general manager Alan Lefkof said these apps are better suited for companion devices like tablets, where they are already popular, while Verizon's director of video services Joe Ambeault said they can enhance the viewing experience as long as they don't overwhelm it. (See Startup Builds TV Widgets for NSN, TelcoTV 2010: Future of TV Is Tablets, Moto Says, and TelcoTV 2010: Verizon Takes a Flex View of the Cloud.)
Of course, the aim of all pay TV providers efforts today is to keep consumers committed to paying a monthly fee and, so far, it's mostly working.
"Cord shaving" was a term that Ambeault coined to describe consumers' approach to TV: they are experimenting with adding in OTT content, but they aren't getting rid of their subscriptions, he said. Heavy Reading 's own research agreed that cord cutting isn't a major concern for IPTV providers yet. (See TelcoTV 2010: Apple's Cord-Cutting Fanboys and IPTV Bogeymen: 2 Down, 1 Still Looms.)
For more of the sights and sounds of TelcoTV, be sure to check out our Show Site and the following stories:
- Advertising's Role in IPTV
- TelcoTV: A 1Gbit/s Prediction
- Cisco Spiking Its IPTV Middleware
- TW Cable Unleashes 'Look Back'
- TelcoTV 2010: Should the Feds Fund Entertainment?
- TelcoTV 2010 Photos: Opening Keynotes
- TelcoTV 2010: Cable Wrestles With IP Changes
- TelcoTV 2010: Occam VP Warns of the Rule of 18
- TelcoTV 2010: RUS Sends Friend Request to FCC
- TelcoTV 2010: Dish Ready to Serve 'Sling Adapter'
— Sarah Reedy, Senior Reporter, Light Reading Mobile