IpTV: Frequently Asked Questions
What is ipTV?
The strictest interpretation of this term indicates that it is simply television content delivered to the
consumer via internet technology. However, this definition fails to clarify the complexity of the
technology and the methods of content delivery used. Is it the delivery of programming over a
closed network to a TV set-top box, or is it the viewing of video content via the open network of
the world wide web on a PC monitor?
Whilst these two different models are often interchangeably labelled ipTV, it is the former that lays
stronger claim to the term. ipTV is a closed, proprietary TV system such as those present today
on cable or satellite services but instead delivered through IP technology over a secure network.
The viewing of video content on a PC linked to the internet is by consensus more accurately
referred to as Internet TV. The key differentiator between this and ipTV is that consumers will
have far greater control over what they view. Whilst ipTV subscribers will be able to view
programming at their own convenience, the choice of what they view, however extensive this
might be, is ultimately determined by the service provider. Using Internet TV, consumers will be
able to access the content they want, from wherever they want, unconfined by the schedule of a
single broadcaster.
What is VoD?
Video on Demand (VoD) services allow viewers to download content either to a set top box or
their PC. Many consumers are no longer happy for broadcasters to dictate when they can watch
their favourite programmes. They do not want to wait for the next season of Lost or Desperate
Housewives to be aired in the UK when they know they can find them online. Unconstrained by
the timing of scheduled broadcasting, consumers will be able to view it as and when they like.
VoD is a particularly strong proposition when used for the distribution of films. Consumers are
already familiar with paying to view films on a pay per view basis, whether that is through their
digital TV service or by going to the nearest Blockbuster store. Again the appeal comes back to
the desire for convenience and choice. Movies on demand mean that consumers no longer need
to worry about late fees or returning the DVD to the shop. It also allows media owners to offer a
far greater range of films than they could on a conventional scheduled movie channel. Sky for
instance offers more than 300 movies to download on their Sky by broadband service.
What is the difference between VoD and PPV?
Whilst consumers will probably pay for VoD on a programme by programme basis much like Payper-view (PPV), PPV is still constrained by the media owner’s schedule. It has two main
applications, movies and live sport, the latter of which viewers are unlikely to want to pay to see
after the event through a VoD service. PPV movies are usually broadcast across a number of
channels with staggered starting times. Whilst this allows the viewer some flexibility, once they
have paid for a specified starting time they only have the one chance to view it. This is also an
expensive use of channel inventory by media owners. With VoD viewers will be able to pause the
programming and come back to it, or even view it more than once.
Why isn’t there much content available online at the moment?
There is a limit to the amount of quality content currently available on ipTV services in the UK.
The main reason for this is that, until recently, the rights agreements have not been in place to
allow media owners to distribute the programming in this manner.
The combination of a reticent production community and the demand from a growing number of
ipTV operators has hindered the deployment of services across the UK. However, following a
period of difficult negotiation, and under pressure from Ofcom, a number of deals have recently
been struck.
The BBC has reached agreement with Pact, the trade association for independent producers,
allowing viewers to catch up on any episodes of a series they’ve missed on-demand while the
series is still going out. They will also be able to download programmes to view later within a
seven day window. Channel 4 has maintained a more hard line stance through their negotiations
and has secured a 30 day primary window, giving them greater flexibility to exploit programme
rights. Importantly, they’ve also agreed a 5 month holdback period for Channel 4 commissions in
order to prevent their programming from being sold on to rivals shortly after transmission.
Now that these agreements have been met, the provision of content is likely to expand
significantly.
How will consumers find the content they are interested in,
effectively and speedily?
This is a challenge for media owners if they are to maximise the return on the wide breadth of
content that they’ll make available, particularly for older or more niche programming.
Personalisation will play a hugely important role, learning the viewing behaviour of users and
being able to intelligently direct them towards relevant, interesting content. Whilst we may be
moving towards a ‘schedule-less’ world where most media is consumed on demand, there will still
be a role for the media owners to act in an editorial capacity. Consumers have built up trusted
relationships with them and the media owners are ideally placed to help guide them to quality
content.
When is ipTV likely to have a decent reach?
It is very difficult at this early stage to foresee how take up of ipTV services will progress, and no
one is particularly sure of what the commercial opportunities will be. Informa Telecoms & Media
predict that global ipTV subscriptions will reach almost 26m by the end of the decade, compared
with just 2.7m at the end of 2005. UK subscriptions are expected to reach approximately 1.45m
by this point, generating almost $800m in revenue.
Will ipTV replace satellite and terrestrial TV?
It is unlikely that ipTV will completely replace conventional forms of delivering programme
content. The media owners themselves certainly aren’t planning to cast aside the investments
they have made in their existing broadcast infrastructures. TV is still very effective at reaching
mass audiences and ipTV subscriptions will not be sufficiently widespread for quite some time.
Until full convergence occurs a number of years in the future, the two have every opportunity to
work in tandem as part of an effective cross-media campaign. However, with the proliferation of
ad-skipping technology, PVRs and increased viewer fragmentation, ipTV can provide a valuable
addition to any media plan.
What ipTV services are currently available?
Home Choice made the first significant move into the ipTV market, offering both scheduled and
on-demand programming through a set-top box. However, as a result of its very early entry into a
market unready for its services, this is up for sale with substantial losses. BT are intending to
launch their own ipTV service before the end of the year and other operators are likely to follow.
Many companies are currently ‘testing the water’ with internet TV services. Traditional media
owners such as channel 4, ITV and Sky are making certain programmes available on the internet,
and online media owners such as MSN and AOL have launched video player services, offering
selected content for free. The rights issues at play within the industry have affected the speed at
which the market has developed. However, now these have been resolved, the amount of
content available to consumers will increase dramatically.
Why should advertisers consider using ipTV?
IpTV presents the opportunity to combine the powerful brand-building effect of conventional TVquality advertising with the strengths of online; the ability to target specific audiences and allow
consumers to easily pursue their interest in a product even to the point of purchase. There is also
the straightforward argument that advertisers need to follow their audiences. As ipTV
subscriptions grow, advertisers will need to ensure that their marketing messages are reaching
this valuable segment.
What ad formats are available?
As ipTV is very much in its youth, there is no definitive or standardised advertising model in
place. Using internet technology media providers will be able to completely revolutionise the
traditional TV commercial break. Based on criteria such as age bracket, gender and income the
targeting capability of online can be utilised to deliver relevant adverts to the right ipTV
subscribers. Advertisers will have the option of either buying one slot for several of their products
or the same slot with a number of other advertisers based on their target audience.
Advertisers are also able to show their TV ads online, either before, during or after videostreamed content. Disney recently announced plans to introduce this model in the US, offering
premium content to consumers for free, but including adverts that cannot be skipped.
Within a web page containing ipTV content there is also the opportunity for the following:

Streamed video advertising can be minimised to appear as a static button within the page
as the programme content continues to play.

Non-intrusive rich media adverts in the corner of the screen, which play throughout the
programming.

Banners/skyscrapers around the main programming, which may interact with the content
at appropriate times.
Advertising technology companies like Tangozebra and Eyeblaster are in the process of refining
these models, and exploiting the technology available in order to find the most suitable ad formats
for the medium.
Brands such as Land Rover are also experimenting with brand-funded content, and we are likely
to see an increase in this advertising method (as well as product placement) in the future.
Advertisers need to ensure, however, that the content is not adversely affected by the promotion,
and the marketing message is more subtle.
What sectors are best suited to ipTV advertising?
All sectors will be able to use ipTV advertising effectively. TV advertising based around internet
technology can not only build brands but encourage a ‘call to action’ from the consumer. When
watching content online or on a television delivered via IP, users will be able to freeze the
programming in order to interact with any advertising that attracts their attention, submit their
details for further information on a brand or in some cases make an online purchase.
IpTV advertising could provide a gateway to internet advertising for sectors traditionally reluctant
to embrace the medium. FMCG and retail brands for example will able to follow their audiences
online using advertising methods they know and trust.
How will companies make money from ipTV?
There are two ways in which ipTV service operators will generate revenues, the first of which is
through customer subscriptions. Depending on the services the media owner provides these
could be in the form of regular payments much like the way consumers currently pay for their
broadband connection or through one off payments for VoD content, or a combination of the two.
Secondly, media owners will hope to generate revenues through advertising. They will of course
need to grow their subscriber base and provide proof of the medium’s effectiveness if advertisers
are to be persuaded to invest.
Like iTV, isn’t ipTV unlikely to make a significant impact (on
consumers, media owners and advertisers)?
The success of PVRs and the growth of peer to peer technologies like BitTorrent are indicative of
changing consumer behaviour as they move away from scheduled viewing to consuming more
media on demand. IpTV technology provides the ideal solution, complementing people’s
increasingly busy lives by allowing them to view programming as and when it suits them.
Interactive TV is used primarily as an advertising format with relatively limited editorial content.
Unlike ipTV, iTV is quite slow to navigate and the programme that the user is viewing continues to
play in the background. For these reasons iTV is not a sufficiently compelling proposition for
audiences and it has therefore not taken off to any great degree. The advertising opportunities
that ipTV offers are far more flexible and sophisticated than anything possible with iTV and as
more and more consumers take-up ipTV services the case for advertisers following them
becomes even stronger.
What is Triple Play?
Triple play is the term used to describe a package of services that includes high speed internet
access, television broadcasts and telephony all over a broadband connection. Triple Play
services are offered by cable companies, telecommunication operators and dedicated home
network companies like Homechoice. There have been a number of significant moves by these
companies as they seek to gain advantage in the market, rolling out new services and acquiring
other companies in order to improve their offering. Some companies, including NTL who have
acquired Virgin Mobile, are also planning to offer mobile telephony in a ‘Quadruple Play’ package.