IPTV is the new revenue generator for Telco company, it is have a unique business model and creativity to understand the flow of revenue. This presentation is giving you understanding the new business model concept for IPTV business.
Third Wave Revenue Telco
IPTV Forum – CommunicAsia 2008
Henri Setiawan Wyatno
Researcher Business Performance
PT Telekomunikasi Indonesia
Singapore, 20 Juni 2008
IPTV – Overview
Growth of potential Demand
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
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
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
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)
Network based PVR – Similar to PVR, although content is stored
within the network rather than on the user's STB.
IPTV Integrated Communication Services
Integrated Telephony Services
Incoming call notification service, caller ID and call logging.
Message notification services: icon displaying voice mail for
Connection establishment service: initiate voice/video call from TV.
Voice/videoconferencing service: initiate multiparty voice/video call from
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 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. Interactivity Accessibility
Music Subscription Service – Subscription service enabling users to store
collections, by genre for example.
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.
A nightmare for the Traditional TELCO’s …
• Siebel • Yahoo!
• FieldCentric • Amazon.com
• Joydesk • Inktomi
• Phone.com • Intelligent Information
• Enterprise SI Application • Bloomberg
• Equipment vendor as SI Provider / Content • WSJ
Supplier Aggregator • Disney
• Feature set for Systems
• Flexible Subs • UUNet
mgmt & Billing • MindSpring
Service Admin Hoster / ASP
Video On Streaming
• Life Cost of STB Demand Equipment • User Friendly
• Multi Service Support Server • Thick/Thin Client
• Multi equipment Support • Support for Applications
• Storage Capacity • Conversion MPEG2/4/WM9
• Simultaneous Access • Encoding Capabilities
• Costs (Transportation/Replication/Mgmt Complexity)
Most TELCOs are new to this business and do not have any experience in the
Growth of Potential Demand
PT MNC Skyvision, PT
Media Citra Indostar (MCI)
(57.62%), PT Reksa
Puspita Karya (16.69%),
PT.Datakom Asia (13.31%)
Source: Arthur D Little 2005, * Based on BMI’s forecast 2007
INDOSAT GROUP (100%)
Astro All Asia Networks plc
(20%), PT. Broadband
PSTN FWA (2G) FWA & 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
(New) Business Model, Integrated System, Growth Contents
Other video Content technologies
Content service delivery
publishers providers Media •Digital rights
methods management (DRM)
•Professional video formats •Transcoding
service providers. •Publishing •Content delivery
platforms •Video formats network (CDN) •Geoblocking
•Advertising brokers •Codecs •IP transit •Video servers
•Video on Demand
(VoD) shops. •Content aggregators •Peer to peer (P2P) •Targeted
•Seach tools networks advertising
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
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
New Va lue Cha in – Opera tor should find its
a dva nta geous position to go a fter the new
revenue/ profit opportunities.
CP – Content Providers
Fina nc ia l Business
Integra ted Service User Interfa ce Fa m ily
SP-Service Provider User
Ed uc a tion
• Dig ita l lifestyle a nd w orkstyle
Cultiva te new m a rkets in • New user exp erienc e for
coopera tion w ith other c onsum er Ind ivid ua l
Hea lth ind ustries • E2E solution for b usiness user
Integrate many contents to
provide good user experience
Third Wave Revenue Telco
Increasing Differentiation & Integration
Gro w th Integ ra ted Services over
My Own TV,
Classic Triple Play Reachability-based
Services Mobile Office Voice
VoIP CMM and WPABX
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
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
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 IPTV
not just services but community development to enhanced market
penetration for Broadband Deployment.