Iptv Third Wave Revenue Telco (Henri Setiawan)

Henri Setiawan Wyatno

Researcher Business PerformanceR&D Center

PT Telekomunikasi Indonesia

Singapore, 20 Juni 2008

IPTV

Third Wave Revenue TelcoIPTV Forum – CommunicAsia 2008

Content

IPTV – Overview

Service Description

IPTV Architecture

Operator Challenges

Business Perspective

Growth of potential Demand

BIG Concept

Third Wave Revenue Telco Remember the Basic

Driven is Content Community

Third Wave Revenue Telco

Key Forces Affecting Telecom Industry

The advent of Web 2.0 technologies and community/social networking, causing traditional media to radically rethink their roles and business models to remain relevant. Media companies are all repositioning for the new digital age.

Wireline broadband is hitting critical mass at last, creating opportunities for both streaming and on demand (archieved) broadband video content to PCs, as an alternative to traditional TV. Video content for broadband is growing exponentially.

Culturally, a generation is growing up that is steeped in new communications technologies, to the extent that the TV is just one of many devices used for entertainment and often no longer even the primary device.

Mobile data technologies are rapidly evolving, and we are seeing the beginnings of business models built around video content streamed to mobile devices such as cellphones and iPods, creating yet another entertainment platform option for consumers and adding more pressure to the ‘lean back’ TV model.

IPTV is now a reality.

IPTV – Definition

Internet Protocol Television (IPTV):

Multimedia services such as television, video, audio, text, graphics, and data delivered over IP based networks managed to provide the required level of QoS/QoE, security, interactivity and reliability

Not just the delivery of video content over IP networks

Not just “the Internet”

Interactivity is a key attribute

Bidirectional communication is a key attribute

Definition of a TV is changing with advances in screen and wireless IP technology

IPTV is not just TV/Movies

Service Descriptions

Broadcast Video Services

Same as or similar to services offer by today cable operators.

National broadcast channels – RCTI, SCTV, TransTV, Indosiar, ANTV, TPI, TVRI, TV7, Lativi etc

Local broadcast channels (local variants of national channels, public educations, government, regional sports, etc) – JakTV, JogjaTV, BandungTV, STV, Padjajaran TV, MQ TV etc.

Premium channels (HBO, ESPN, StarSport etc)

A percentage of broadcast content will be stored for replay at a later time.

Combination of standard definition (SD) and high definition (HD) content, moving to HD over time.

Narrowcast and/or unicast may be used for targeted consumer groups.

Stored Video Services

Locally stored VOD – Widely popular titles broadcast to user’s CPE; tied to digital resource management (DRM).

Network stored VOD – Less popular titles without as much simultaneous viewing (immediate viewing may be unicast, later viewing may be bundled for broadcast or narrowcast).

Subscription based VOD – Subscription version of prior two service options, pre defined number of titles within a given time.

PVR – Subscribers with appropriate viewing rights can record locally – or network stored content for later viewing. Viewing rights may vary based on single, multiple, or unlimited content use. DRM may enforce sharing between set top boxes (STBs) within home.

Network based PVR – Similar to PVR, although content is stored within the network rather than on the user's STB.

Service Descriptions

IPTV Integrated Communication Services

Integrated Telephony Services

Incoming call notification service, caller ID and call logging.

Message notification services: icon displaying voice mail for Wireline/wireless.

Connection establishment service: initiate voice/video call from TV.

Voice/videoconferencing service: initiate multiparty voice/video call from TV.

Directory service: electronic telephone directory on TV.

Integrated Internet Services

TV web browsing: selected walled-garden website viewing from TV.

TV instant messaging: initiate IM service while simultaneously viewing TV.

TV email: read, send, receive email via TV based email client.

Informational ticker: ticker service at bottom of screen.

Telecommerce: similar to internet e-commerce, but via TV-based client.

IPTV Audio Services

Radio Broadcast Service – Worldwide broadcast radio content delivered over TV audio output or attached speaker system.

Music Broadcast Service – From an audio perspective, most analogous to broadcast TV, with specific music channels options. May be accompanied by information and/or graphics to support content.

Music On Demand – Audio version of VOD.

Music Subscription Service – Subscription service enabling users to store collections, by genre for example.

Personalization

Interactivity Accessibility

Service Descriptions

IPTV Gaming Services

TV delivery for single-user and multi-user gaming.

Subscribers may have option to select specific players who they want to join a particular game, as well as schedule game start times.

Some international providers considering TV-based gambling, karaoke, etc.

IPTV Advertising Services

Traditional broadcast ads, local ad insertion, IP-addressable demographic ad insertion, and integration with telecommerce, enabling purchase on demand.

Two way nature of IP video will enable subscribers to provide feedback.

IPTV Architecture

Operator Challenge

A nightmare for the Traditional TELCO’s …

• Yahoo!

• Amazon.com

• Inktomi

• Intelligent Information

• MSNBC

• Bloomberg

• WSJ

• Disney

• UUNet

• MindSpring

• User Friendly

• Thick/Thin Client

• Support for Applications• Conversion MPEG2/4/WM9

• Encoding Capabilities

• Life Cost of STB

• Multi Service Support

• Multi equipment Support

• Microsoft

• Siebel

• FieldCentric

• Joydesk

• Phone.com

• Feature set for

support of

Applications

• Flexible Subs

mgmt & Billing

Option

• Enterprise SI

• Equipment vendor as SI

• Storage Capacity

• Simultaneous Access

• Costs (Transportation/Replication/Mgmt Complexity)

Content Aggregator

Hoster / ASPDSLAM/BRAS/Service Admin

Application Provider /Supplier

Content Creator

STBCAS/DRM Middleware

Streaming Equipment

Systems Integrator

Video On Demand Server

Most TELCOs are new to this business and do not have any experience in the Entertainment Industry

Growth of Potential Demand

TELKOM (100%)

AccrossAsia Multimedia

(57.62%), PT Reksa

Puspita Karya (16.69%),

PT.Datakom Asia (13.31%)

INDOSAT GROUP (100%)

Astro All Asia Networks plc

(20%), PT. Broadband

Multimedia

PT MNC Skyvision, PT

Media Citra Indostar (MCI)

Source: Arthur D Little 2005, * Based on BMI’s forecast 2007

PSTN FWA (2G) FWA & Seluler (3G)

Seluler (2G) Dial – Up ADSL IP-TV PAY-TV

10.9jt 23jt 35.5jt 130jt 5.1jt 3jt 4.8jt 1.5jt

Source: Koesmaryati - BRTI 2008, Konsep awal Roadmap TIK

Forecast 2011

BIG Concept

(New) Business Model, Integrated System, Growth Contents

Content publishers•Professional video service providers.

•UGC publisher

•Video on Demand (VoD) shops.

Other video service providers•Publishing platforms

•Advertising brokers

•Content aggregators

•Seach tools

Media formats•Video formats

•Codecs

Content delivery methods•Content delivery network (CDN)

•IP transit

•Peer to peer (P2P) networks

Other technologies•Digital rights management (DRM)

•Transcoding

•Geoblocking

•Video servers

•Targeted advertising

•Home networking

Remember the Basic

Key Finding in Service

Triple play is no longer just a revenue enhancer, but a must for long term survival; telcos must devise a video strategy in the coming year.

Telcos must become involved in the creation of content and services. The telco business case for triple play is improving, but many telcos feed the ‘grand slam’ of voice,

data, video and mobility will be their long term differentiator from competitors. The emphasis on and interest in triple play are clear indications that telcos are rediscovering the

importance of the consumer market. Second to competition, the ability to increase ARPU by 100 percent is driving renewed interest in

video. The video market is evolving from broadcast to personal. Telcos plan to differentiate their video services not so much by adding advanced features, but rather

by bundling them with voice and video. There are sharp regional differences in how telcos are prioritizing the rollout of new services. Smaller, independent telcos are talking the lead in deploying IP based video services.

Key Finding in Technology

IP is emerging as the telco’s most critical weapon in a showdown with cable competitors. Although much has been made of FTTP in the past year, telcos worldwide remain committed to

delivering bundled services over their copper networks. The complexity associated with entry into the video business will lead many vendors back into the

system integration and professional services business. The move to video over DSL will spell the end of ATM DSLAMs and force the migration to IP DSLAMs

and Ethernet transport. Operator worldwide are finding that a minimum 20 Mbps is required to enable a compelling triple

play offer over DSL. xDSL is more important now then ever before. Access services are converging toward IP.

Driven is Content Community

Business

User

Ind ividua l

Family

User

CP

–C

on

ten

t P

rov

ide

rsNew Value Chain – Operator should find its

advantageous position to go after the new

revenue/ profit opportunities.Financ ia l

Educ a tion

Hea lth

Med ia

Network

Operator

En

d U

ser

Integrated Service

ProviderSP-Service Provider

User Interface

Integrate many contents to

provide good user experience

• Dig ita l lifestyle and workstyle

• New user experienc e for

c onsumer

• E2E solution for business user

Cultivate new markets in

cooperation with other

industries

New Business

Model

BIG

Business

Integra tedGrowth

Third Wave Revenue Telco

Increasing Innovation

Incre

asin

g D

iffe

ren

tia

tio

n &

In

teg

ration

Mobile Office Voice

CMM and WPABX

Reachability-based

Communication

Voice/Video

Conferencing

IPTVInternet

Hybrid Phone

VoIP

CommercialBundles

EnhancedServices

BlendedServices

My Own TV,

Amigo TV

Classic Triple Play

POTS

Personalized

and Blended

Services

Conversational

Services over

TV

Methodology Overview

IPTV Issues

Consider IPTV service from user perception: the traditional TV service is available 99.99% Take care about video quality:

Manage carefully, not just the encoding but the end-to-end service Plan if , when, where and for which customers migrate to High Definition, despite the strong appeal

Keep it simple, at least the beginning: concentrate in providing basic services first (BTV and VoD). TV watchers don’t have complexity and there is a potential risk to reject too complex service by customers

Take into consideration that new content is important however innovative services involving traditional content sound also interesting (i.e. TSTV, The day before TV)

Allocate needed time: i.e. Telecom Argentina has planned a 18 months project to analyze, trial, collect and elaborate results and then select IPTV service platform/vendor.

Pay attention to customer care, at least at the beginning: different experiences from Telco operators shown that clients expect a dedicated and technically competent customer care.

Make a good trial: run it without introducing any dependency on your future decision. It has certain costs but you will have all the flexibility to make a choice for a successful business.

Take your time to learn: how to organize internal processes for IPTV services delivery, assurance and management. TV wasn’t a Telco business before.

Select STB carefully: usually STB represents 40-45% of Capex for IPTV service and choose STB allowing remote management and updating.

Middleware should include all major back-end modules such as content management, security management and basic subscriber management

Middleware front end (GUI) client technologies for IPSTB should be closer to the web browser technologies available today, which would allow sustainable and cost effective IPTV applications development

IPTV Issues

In some business case, video streaming or download & play services over IP is analog of IPTV(Web TV or Mobile TV)

Content for IPTV could be exploited also over IP Web Portal (Web TV) IPTV platform should support multitrack audio IPTV components adopting standards would avoid proprietary solution and dependency on

vendor (e.g. DRM) Better choice is to be VoD vendor’s solution independent Preferred solution is that having richer BSS features integrated (e.g. content bundling, special

offers and discount, advertisement campaigns, … ) Exposure IPTV platform to third parties should be considered (both from regulatory and

business)

Summary

IPTV - Not just the delivery of video content over IP networks

IPTV as Third Wave Revenue Telco:

Business model as key success – define and decide.

Integrated as Network, Service and Content deliverable.

Growth with Community Content Development

Improvement for IPTV Business Model that already being deployed is IPTVnot just services but community development to enhanced market penetration for Broadband Deployment.

Question and

Answer

Thank you

Henri Setiawan WyatnoResearcher Business Performance Evaluation

R&D Center – PT Telkom Indonesia

Phone : +62-22-70604084

Email : [email protected]