Make Video, Not War
I wouldn't complain if I wanted a fatter pipe and my Internet service provider charged me more for it, just as I wouldn't have grounds to gripe if I wanted more TV channels and my TV service provider said I'd have to cough up more for them. But I'm against anyone tinkering with my Internet access beyond that.
At the same time, I can understand why telcos that have turned to offering TV services to bolster revenues are worried about video content from Google (Nasdaq: GOOG) and YouTube Inc. , as well as other video content providers. Many telcos don't know what to make of Internet video, but it sure does take up bandwidth. Is it a threat or an opportunity? Some might console themselves by saying, well, folks don't spend as much time watching Internet video as they do TV. But there is no denying the popularity of Internet video, and the fact remains that anytime someone turns away from telco TV to the Web for video, it represents time during which the telco TV provider has, in a sense, lost the customer. And this is also probably why some might think the current unlimited Internet usage model is unsustainable.
I don't claim to have all the answers, but I think that attitude is shortsighted. People turn to Internet video because they find it interesting, compelling, whatever. Still, I don't necessarily see this as a telco TV vs. net video war. Video is video, whether it's high-definition channels offered by telcos or grainy user-generated content on YouTube. So what we are really talking about here is video content.
And that's why I find Alcatel-Lucent (NYSE: ALU)'s recent announcement regarding its Triple-Play Service Delivery Architecture 2.0 interesting. When the vendor talks about TSPDA 2.0 delivering more intelligence, more control, and more queues, that translates into telcos being able to offer, in addition to IPTV, a variety of managed services, such as managed gaming, managed VOIP, managed video, and, of course, high-speed Internet. Yes, I understand there might be an additional charge associated with the Alcatel-Lucent "managed video" proposal, but I don't place that on par with squeezing the Internet spigot.
That's one solution, though not the only solution. Something else the telcos can do is take the opportunity to make TV something more than the proverbial cultural wasteland. It's this simple: If you offer me programs that I'm interested in, I'll watch them. They can also do things that allow me to "personalize" my TV experience, such as more video on demand, along with VOD-like features such as time-shifted TV, personal video recorder, and more high-definition content.
Bottom line: Let's make the TV viewing experience more interesting, and then look for creative ways to make Internet video complementary to telco TV.
— Sam Masud, Senior Analyst, Heavy Reading