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Iptv Third Wave Revenue Telco (Henri Setiawan)


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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.

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Iptv Third Wave Revenue Telco (Henri Setiawan)

  1. 1. IPTV Third Wave Revenue Telco IPTV Forum – CommunicAsia 2008 Henri Setiawan Wyatno Researcher Business Performance R&D Center PT Telekomunikasi Indonesia Singapore, 20 Juni 2008
  2. 2. 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
  3. 3. 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.
  4. 4. 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
  5. 5. 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.
  6. 6. 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. Personalization  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.
  7. 7. 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.
  8. 8. IPTV Architecture
  9. 9. Operator Challenge A nightmare for the Traditional TELCO’s … • Microsoft • Siebel • Yahoo! • FieldCentric • • Joydesk • Inktomi • • Intelligent Information • MSNBC • Enterprise SI Application • Bloomberg • Equipment vendor as SI Provider / Content • WSJ Supplier Aggregator • Disney • Feature set for Systems support of Integrator Content Applications Creator • Flexible Subs • UUNet mgmt & Billing • MindSpring Option DSLAM/BRAS/ Service Admin Hoster / ASP STB CAS/DRM Middleware 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 Entertainment Industry
  10. 10. Growth of Potential Demand TELKOM (100%) PT MNC Skyvision, PT Media Citra Indostar (MCI) AccrossAsia Multimedia (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 Multimedia Forecast 2011 PSTN FWA (2G) FWA & Seluler (2G) Dial – Up ADSL IP-TV PAY-TV Seluler (3G) 10.9jt 23jt 35.5jt 130jt 5.1jt 3jt 4.8jt 1.5jt Source: Koesmaryati - BRTI 2008, Konsep awal Roadmap TIK
  11. 11. BIG Concept (New) Business Model, Integrated System, Growth Contents Other 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 •UGC publisher •Advertising brokers •Codecs •IP transit •Video servers •Video on Demand (VoD) shops. •Content aggregators •Peer to peer (P2P) •Targeted •Seach tools networks advertising •Home networking
  12. 12. 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.
  13. 13. 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 User End User Med ia Network Integra ted Service User Interfa ce Fa m ily SP-Service Provider User Opera tor Provider 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 New Business Model Integrate many contents to provide good user experience
  14. 14. Third Wave Revenue Telco Business Personalized BIG and Blended Increasing Differentiation & Integration Services Conversational Gro w th Integ ra ted Services over TV My Own TV, Voice/Video Amigo TV Conferencing Blended Services Classic Triple Play Reachability-based Hybrid Phone Communication Internet IPTV Enhanced Services Mobile Office Voice VoIP CMM and WPABX POTS Commercial Bundles Increasing Innovation
  15. 15. Methodology Overview
  16. 16. 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
  17. 17. 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)
  18. 18. 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 IPTV not just services but community development to enhanced market penetration for Broadband Deployment.
  19. 19. Question and Answer
  20. 20. Thank you Henri Setiawan Wyatno Researcher Business Performance Evaluation R&D Center – PT Telkom Indonesia Phone : +62-22-70604084 Email :