But there are many good arguments for Verizon to consider a transition to IPTV, and here are a few powerful ones:
- It would allow Verizon to offer subscribers much more broadcast and VOD fare than if it stayed with its RF overlay approach.
- IPTV makes more sense if you're thinking of offering more and more high-definition channels. (And who isn't going to prefer high-definition to standard-definition video?)
- The logic of having a converged network that delivers two services (data and voice) gets even stronger when offering three services.
I can, however, understand Verizon playing coy when it comes to IPTV. Telcos delivering IPTV services today are merely at the cusp of beginning a mass-market rollout. As they ramp up, there will be lessons learned regarding not only IPTV as a technology, but also what applications to provide to make IPTV not just a me-too offering but a superior user experience.
For Verizon, sticking to its more conservative approach buys it time to understand what, if any, will be the relationship between IPTV and Internet video. Despite its fast-growing popularity, in terms of picture quality net video is going to keep looking like, ahem, net video as long as telcos control the last-mile bandwidth and it is delivered via a best-effort IP service. In fact, surveys indicate that the telcos themselves have not figured out whether net video complements or competes with IPTV. If I had to guess, I'd say that there will be some kind of accommodation between telco TV and net video.
Frankly, I think that Verizon's FiOS is a smart play because it has put its money into something fundamental – fiber bandwidth. Despite other telcos going the IPTV route, Verizon doesn't have to be at the leading edge. FiOS TV gives Verizon time to kick the tires of IPTV and, as it says, make the transition to IPTV "when and if" there's a business case for it. "When" Verizon might move to IPTV is anybody's guess; it's the "if" part that I don't buy. I'm betting that Verizon will make the move to IPTV sooner rather than later.
— Sam Masud, Senior Analyst, Heavy Reading