What Will it Take to Deploy IPTV? · • IPTV can target ads to individual subscribers – Ads selected based on channel watching history or demographics – IPTV can also offer advertiser

What Will it Take to Deploy IPTV?Features & Requirements for 2nd Generation IPTV Deployments

Michael CowardCTO and Co-founder

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IPTV Rollout Projections

• IPTV is adding 10M subscribers/year worldwide– Only 2M/year in North America

– Tiny compared to Satellite and Cable – 100M subscribers

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“Parity is not a strategy”

1st generation IPTV deployments are focused on duplicating services offered by cable and satellite

Telco Operators competing only on price or service bundling

DSLAM

IP Set Top Box

DSL Modem

Core Network

Video Encoders

Subscriber Management System

Billing System

Typical IPTV System Architecture

Multicast Broadcast Streams

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How IPTV Can Differentiate

What’s special about IPTV?

� Ability to deliver each subscriber a separate data stream

How can operators leverage this feature?

� Network Personal Video Recorder (PVR)[ie. Tivo, Time Shift TV]

� Personalized Advertising

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Network PVR

• Network Personal Video Recording allows the subscriber to watch any show from past week

• Content is stored in network

– No hard disk required in set top box

• Killer features against Tivo/Cable/Satellite

– Don’t have to chose shows ahead of time

– Don’t have to worry about conflicts

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Personalized Advertising

• Cable/Satellite can target ads to a neighborhood or zone

• IPTV can target ads to individual subscribers– Ads selected based on channel watching history or

demographics

– IPTV can also offer advertiser feedback – track ads watched

• Personalized ads can be sold for 10-100% more per view

DSLAM

IP Set Top Box

DSL Modem

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Core

Network

Network PVR Server

Video Encoders

Live Video

Network PVR Streams

Ad Server

Personal Ad Streams

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Bandwidth Requirements

1st generation IPTV deployments

• Total Bandwidth to subscribers (DSLAM) – 1Gbps– Enough for 200 SD channels, 100 HD channels

• Same for any number of subscribers

Gigabit Ethernet

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DSLAM

IP Set Top Box

DSL Modem

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Core

Network

Network PVR Server

Video Encoders

Live Video

Network PVR Streams

Ad Server

Personal Ad Streams

Bandwidth Challenges

2nd generation IPTV deployments

• Requires 20Mbps per subscriber – 3 HD + 3 SD streams

• Small town with 10,000 subscribers needs 200Gbps!

200Gbps / 10K subscribers

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Economics

Falling costs makes 2nd Generation IPTV features viable

• 2006: 100Gbps system occupies 10 racks and costs $20M

– $2000 per subscriber!

– No ROI to offer these features to subscribers

• 2008: 100Gbps system in a single rack for less than $1M

– Less than $100 per subscriber

– 12 month ROI for thesesystems if they attract newsubscribers and reduce churn

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Summary

Exciting new features are on the horizon for IPTVAll enabled by single stream/subscriber

Personalized Advertising� New revenue stream for IPTV operators

Network Personal Video Recording� More differentiation, reduced churn, additional

ARPU