The Future of IPTV

The forecast by market professionals is by the year 2007 there will be more than 200 million digital TV homes subscribers with 25% global market penetration. Worldwide subscribers to cable VOD (video on demand) services will increase from about 5 million at the end of 2003, to almost 14 million in 2007. Broadband penetration in the United States and Europe will grow from 25 million in 2002 to 290 million in 2008. By 2008, 20 million homes worldwide will subscribe to IPTV services.
What does this mean? Quite simply that IPTV is emerging and will available to you in just a few years if not sooner. For those businesses implementing IPTV it will provide a means of deploying interactive content and meetings unlike anything previously available on such a large scale. For the consumer it will provide a interactive experience unlike anything they have known as the technology evolves and becomes wide-spread. The cable companies providing both television broadcasting and broadband services will have new competition as the communication companies normally offering only broadband services will now be able to broadcast television and live video. The level of user interactivity will also increase as IPTV emerges and evolves - blending with technologies associated with internet access. Think of watching your favorite television and every program, movie, and advertisement will have hyperlinks for more information - while being able to send and receive email or text messages to friends and family.

Video-on-demand and two-way interactivity for applications such as home shopping, TV banking and gambling are already being deployed. This is not your MSN® TV services, but a whole new technology of the future!

Set-Top Evolution: VCR to IP-STB

In the past, the Video Cassette Recorder provided a much needed convenience. Life no longer revolved around being at home to watch prime-time television. Instead of helping the consumer relax, the multi-tasking device with confusing menus provided many with an outlet for frustration. The most infamous problem/complaint, "how do I get this annoying thing to stop blinking 12:00?"

The Personal Video Recorder (PVR) is much simpler to operate, making it a much better companion to television set, than the ancient VCR.

PVR boxes let viewers take advantage of Video On Demand (VOD) technology. One cool feature of VOD gives users the ability to automatically record programs that meet specific criteria. For example, Johnny Viewer really likes billiards so he enters 'billiards' as the recording criteria. Thanks to VOD, Johnny will be alerted when his Personal Video Recorder recorded a billiards match for his enjoyment.

Personal Video Recording units with Internet Protocol (IP) capabilities can access the Internet to receive digital broadcasts. The digital television station approach, otherwise known as Internet Protocol Television (IPTV), is becoming more popular because these stations are much cheaper for the operator to maintain than traditional stations. In simplest terms, operators save money because less equipment is required (no need for additional buildings, servers, or satellite dishes).

IPTV presents opportunities to earn a more substantial profit from its customer base in addition to cheaper costs for the operator. NDS (www.nds.com), leading global supplier of open end-to-end digital pay TV solutions for the secure delivery of entertainment and information to television set-top boxes and IP devices, offers their VideoGuard Conditional Access (CA) solution to supplement the original Pay Per View (PPV) model. CA means the viewer receives a card with a computer chip on it, which is inserted in the set-top box and kept there. That chip on the card allows access to user-specific info and TV services. Like a credit card, the card remains active based on the "condition" that the subscription payments are current.

Many consumers understand the original model for Pay-Per-View (PPV), in which payment is made for a single showing of a program, but NDS VideoGuard introduces variations of the model that provide both revenue-generating opportunities for operators and gratification to viewers.

Operator-Oriented Features:

• Extended PPV - Equivalent to Selling Movies (One-time Fee)
• Off-disk VOD - Rent Out Content (Charge Each Day Viewed)
• First-class Ticket - Sell Commercial-free TV for a Premium Price

Subscriber-Oriented Features:

• Bonus Points - Free Movie for Frequent Rentals
• 5-Star Treatment - Free Package Upgrades for Premium Users
• Practical PPV - Record Live PPV and view later at cheaper cost

As well as the conveniences provided by the new CA-attributed PPV models, subscribers enjoy a more intimate, interactive experience. Consumers are taking advantage of the interactive element of IPTV to entertain themselves through games and use live feedback to make TV watching a more productive event.

An important issue is being discussed during a hosted segment on a 24-hour channel dedicated to live news. The news anchors are urging viewers to call in and give their opinions on the matter. Before IPTV, the viewers would have to telephone the on-screen number, accept that they are going to be charged a fee for the call, and press the corresponding digit on the number pad that matches their feeling about the subject. It would be nice to participate without the fee or the phone. Those with digital TV can skip the phone and fee because they will be able to respond via remote control.

Viewers who are not live news aficionados will still be able to appreciate digital TV. Game shows are extremely popular these days, especially of the contestant quizzing variety. IPTV is great for the avid game show fanatic. Many complain that they know more than the people on-screen. Now viewers can play along to show if they are contestant-worthy.

Many consider the television to be a member of the family. The TV set can act as a babysitter, comic relief, and a night-light for the kids and some adults (no shame in a night-light and teddy bear - for the kids, anyways). These television sets, while feeling boring and plain, keep doing handfuls of favors for their owners without asking for anything return. TVs everywhere are in for a big surprise. Viewers are going to buy new IP-enabled PVR friends for the TVs (and the owners) to play with so the TV sets won't be bored anymore. Owners enjoy the fun features and greater productivity through interactive programs and television sets feel great with their newfound friends. IPTV channel operators enjoy the cost-efficiency, new methods of selling content, and more pathways to profit from advertising.