IDTV

IPTV may have a scalability issue

A company that supplies technology to the IPTV industry held a press event the other day, and spent quite a lot of time dissing Microsoft TV. Their main accusation was that Microsoft’s IPTV software solution wasn’t scalable, and they predicted that none of the so-called Tier 1 telcos that had adopted the Gates technology would have more than 20,000 subs by next year (i.e. 2007).

Actually, their criticism wasn’t confined to Microsoft. “Scalability of IPTV has been the biggest bugbear of IPTV,” said the company’s CEO, admitting that his main problem hadn’t been gaining market share for his particular product, but that the market had ended up being much smaller than predicted.

It’s interesting that, in the weeks that followed, two Belgian telcos, Belgacom and Telenet, announced the results of their respective digital TV deployments, and with vastly different results. Belgacom’s much-hyped launch last July had garnered just 33,000 subs by year-end 2005, while rival Flemish cable company Telenet, launching several months later, and to a smaller constituency, had notched up well over 100,000 (the precise results are due to be revealed today (Tuesday 28^th Feb)).

So what’s the difference? One can surely not dismiss the possibility that Telenet’s content offering was simply more attractive to potential subscribers. But (a) Belgacom managed to out-bid it last year for exclusive access to Belgian premier league football matches and (b) Belgacom carries exactly the same services from Flemish pubcaster VRT that Telenet does. So, at least on the face of it, Belgacom’s content should match Telenet’s in attractiveness.

There is a significant technical difference between the two services, however. Belgacom’s was a proprietary IPTV offering (not Microsoft’s, as it happens, but Siemens’) over an ADSL network. Whereas Telenet’s was an old-fashioned DVB-style deployment over a digital cable network, using an only slightly less mature middleware solution, the Java-based MHP.

Given the relative circumstances of the two competitors, it’s rather tempting to suppose that the difference is in fact due to Belgacom encountering problems trying to scale up its IPTV network. Maybe that's a cue for all of us to start scaling down our IPTV forecasts.

'Telly-phones' - killer app or not?

Here's a bold statement: "Watching television on your mobile is a stupid idea. Nobody will do it for any length of time at any sustained cost." (From Monday's Guardian - Emily Bell again: sorry, Emily, nothing personal....)

Compare and contrast with the following observations:

1) "We expect Western Europe to ramp up to over one million [TV-capable cellphone] units sold this year." (From my websit'es report on Strategy Analytics' latest research, which predicts global sales of such devices this year will reach eight million).

2) South Korean telco SK Telecom's broadcast TV to cellphone service currently has around 400,000 subscribers, paying €11/month each. (Korea Times)

3) All commercial trials of mobile TV in Europe which have so far published results have shown that subscribers are willing to pay €10-15 a month to watch TV on their mobiles, and that in practice they do so for between 20 and 25 minutes a day. (See http://www.dvb-h-online.org/services.htm, and be prepared to do a lot of digging!).

I'm not saying that means the issue is conclusively settled. For instance, a significant amount of TV viewing to mobiles takes place in the home, a usage segment likely to be taken over by pay-TV operators once they get their networked home entertainment technology in place. Moreover, the revenues quoted may not be sufficient to make a business case.

But surely, on the evidence, no-one can argue there isn't some demand for these services, if only from bored commuters on long commutes, and that they'll be prepared to pay something for it on an ongoing basis.

Déja vu? French pay-DTT

A glossy French brochure lands in my in-tray, giving details of one of the two pay-TV offerings launching on France's equivalent of the Freeview platform. This one's from TPS, until recently the sworn enemy of Vivendi's Canal+ unit, which launched its own rival service just before Christmas.

The fact that TPS and Canal+ are set to merge later this year is not the only paradox of France's nascent pay-DTT sector. The TPS brochure makes clear that its set-top box, like Canal+'s, will be HDTV-compatible, even though there is as yet no spectrum reserved for HDTV on the French DTT platform.

This is because the French government has decided to mandate the use of the advanced MPEG-4 video compression standard for pay-DTT services. The idea was to benefit from the late start of the pay-DTT platform there (the free-to-air channels were compelled to launch by April 2005, with a 12-month moratorium accorded to their pay-TV counterparts) by using state-of-the-art technology to facilitate a transition to HDTV if required.

Ordinary free-to-air transmissions, meanwhile, have been stuck with the traditional MPEG-2 system (as has Freeview in the UK), so the new TPS boxes are hybrids twice over: HDTV as well as SDTV, MPEG-4 as well as MPEG-2.

Those with long memories will remember the travails suffered by ITV Digital when it launched in the UK with what was then a largely untested technology, and wonder if our Gallic neighbours haven't bitten off more than they can chew.

The other worry, of course, is that ITV Digital ended up in administration. That was taken to demonstrate that pay-DTT simply doesn't make economic sense. The UK has a new home-grown equivalent in a service called Top Up TV, but it has registered 100 or 200,000 subs at best, a tiny fraction of the total Freeview user base, despite costing only £7.99 a month for 11 channels.

The TPS offer costs nearly £10 a month more at £17.00 for just five 'premium' channels, while the rival Canal+ offer costs £30 a month for just seven.

There is one thing going for the platform, but it's a one-off benefit: Canal+ has a large installed base of analogue terrestrial pay-TV subs who will probably prove easy to convert. But once they've switched, it will probably be slim pickings, especially as multichannel television is storming ahead on France's rapidly expanding ADSL platform.

HD-Ready slightly unready

A story in the industry newsletter New Media Markets, of which I am an associate editor, warns that some TV sets sold as HD-Ready in the UK Market may not work with BSkyB’s HDTV decoders when the service launches later this year (see idtv.co.uk's news archive - NB requires registration).

It comes as something of a surprise to find that this standard, as well as a separate one guaranteeing that a TV device will work after analogue switchoff (known as the 'digital tick' logo), is 'declarative'. That is, all manufacturers need do is make a declaration that they meet said spec before using the logo.

In theory, in the case of the digital tick, which is overseen by the UK government's Department of Trade and Industry, manufacturers can be spot-checked. But my sources at the DTG Testing unit, which some manufacturers use to check that their UK Freeview receivers work properly, say they're unaware any such spot checks have ever been carried out.

Meanwhile, no such official checks at all are carried out on HD-Ready receivers to check they meet the spec. One reason, no doubt, that a recent press release I received from BSkyB about their HDTV launch said their service was designed to work with 'compliant' HD-Ready displays. A bit circular, if you think about it: the display will be compliant with BSkyB's service if .... it's compliant.

Analogue switchoff dates 'unrealistic'

No great surprises, perhaps, but the latest report from Screen Digest about the digital terrestrial television (DTT) market in Europe says that Italy, France and Spain will have major issues in meeting their analogue switchoff deadlines.

Italy's 14m analogue-reliant installed TV base means that it will have to convert 4.6m homes a year to DTT to meet its target switch-off date of 2008 - the most ambitious conversion rate in Europe. France has to convert 2.1m homes a year to DTT and Spain will have to convert 1.6m homes a year -very ambitious given that an organised DTT platform has still to launch. The UK has just 803,000 homes a year to convert, a figure that seems far more achievable given the current success of Freeview.

Table: DTT penetration of TV households by year following launch

UK:
Pay service (OnDigital) launched November 1998 closed May 2002
Free service (Freeview) launched October 2002
6.5m DTT homes by year end 2005
11.6m DTT homes by 2009
Expected analogue switch off complete by end of 2012

France:
Free service launched in March 2005
1.1m DTT homes by year end 2005
5.7m DTT homes by 2009
Expected analogue switch off 2010

Germany:
Roll out begun in Berlin Brandenburg in November 2002
1.64m DTT homes by year end 2005
3.4m DTT homes by 2009
Analogue switch off target date 2008

Italy:
Free service launched in December 2003
3.3m DTT homes by year end 2005
8.8m DTT homes by 2009
Analogue switch off target date December 08

Spain:
Pay service (Quiero) launched May 2000 and closes June 2002
Local DTT service launches in Barcelona in July 2004
700,000 DTT homes at year end 2005
3.7m DTT homes by 2009
Analogue switch off target date April 2010

Netherlands:
Pay service (Digitenne) launched in April 2003
160,000 DTT homes by year end 2005
384,000 DTT homes by 2009
Analogue switch off 2007/2008 although could be moved forward to 2006

Sweden:
Free service (Teracom) launched in April 1999
520,000 DTT homes by year end 2005
625,000 DTT homes by 2009
Analogue switch off February 2008