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Taking IPTV Out of the Silo

Heavy Lifting Analyst Notes
Heavy Lifting Analyst Notes
Heavy Lifting Analyst Notes
7/30/2008

Vendors were few and attendee traffic was thin, but there was one clear message coming out of the IPTV World Forum last week in Chicago (the first time the event was held west of the pond, which is probably why there was a paucity of warm bodies). From Ian Tapp, senior VP of business development at Tandberg Television , who gave the opening-day keynote; to Joseph Ambeault, Verizon Communications Inc. (NYSE: VZ) video service's director of consumer product development; to Sanjay Mewada, VP of strategy for Netcracker Technology Corp. , the common theme was that service providers will have do much more than what they are currently offering with IPTV.

Tapp believes it's a different world now, made up of "digital natives" comfortable with new technologies and the less tutored "digital immigrants" – although it would be a mistake to categorize them based on age. Although Ambeault did not lift the lid on precisely what interactive services Verizon is developing, it's significant that he has strategic responsibilities for both Verizon's wireline and wireless products.

But it was Mewada who I thought gave one of the most refreshingly honest presentations, when he urged telcos to look at the service layer as distinct from the network infrastructure in order to take full advantage of third-party applications and user interfaces.

Mewada's advice is a tall order for telcos, because each has generally viewed its network as being in a symbiotic relationship with the services delivered over it. This will require a culture shift on their part, never easy to accomplish, but that is what they will need to do to more fully leverage the investment they are making in IPTV.

You don't have to be a "digital native" to appreciate the fact that it's the user who decides when and what he or she wants to view on the Web. The Internet has fundamentally changed our habitual ways of interacting with content and each other. Because of the array of choices we have, offset by the time constraints of modern life, we are becoming an on-demand society. Telco video will have to adapt to a changing reality that puts the subscriber in control by becoming interactive in a meaningful way.

Telcos will also have to go beyond thinking of video in isolation from other services. Hong Kong-based PCCW's "Now TV" is one example of some of the immediate possibilities telcos have with their foray into video. PCCW Ltd. (NYSE: PCW; Hong Kong: 0008) does not have a silo view of video, but thinks in terms in terms of multimedia services across a quad-play with a high degree of interactivity.

This is why Mewada's advice that telcos shake the my-network, my-service mindset is timely. Ignoring it would give telcos one more reason to look over their shoulders at Internet video.

— Sam Masud, Senior Analyst, Heavy Reading

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