Dave Burstein from DSL Prime lassoed a bunch of IPTV evangelists at Spring 2006 VON. The idea was to discuss what's real about video over IP, and what we'll continue to wait for. The big takeaway? IPTV is about bandwidth, bandwidth, bandwidth. Each of these companies had something to say about it:
- John Chapman, Cisco Systems
- Bill DeMuth, SureWest Communications
- Tom Hammer, Akimbo (Note: Tom is one of my favorite teammates from NetObjects days!)
- David Price, Harmonic
- Anton Wahlman, Needham & Co
In order to determine where the bandwidth bar is, you need to know what kind of content you'll be delivering. Even though most people are lucky to get 1.5 Mbps in their home, Price thinks that HD at 3 Mbps/second is a joke. Harmonic has learned some interesting tidbits - for example, sports is the hardest content to deliver, especially basketball, and so to deliver a sports channel you need a minimum of 7 Mbps/second. By this time next year, Harmonic will have reached this bar.
Akimbo delivers video content over IP to the living room, and is primarily focused on niche programming. (They do deliver some mainstream content, like the BBC and the Discovery Channel.) Hammer's customers download anywhere from 1GB - 4GB of content each day, and the average case is 2GB of content downloaded over a 1.1 Mbps line. 3 Mbps makes Hammer salivate, since then Akimbo could really start streaming content.
DeMuth chatted a bit about SureWest's buildout planning. In their original market assessments, the company decided that any new builds needed to support IPTV over fiber. With that strategy in mind, they went ahead and rolled active fiber that delivers >100Mbps (really?!?) to the home, with very low latency(how low?) - and most recently, they've started delivering high-def television. DeMuth's team set such a high bar for bandwidth because they believed that 100 Mbps is the absolute minimum for this application.
Wahlman brooks no nonsense, and stated that AT&T is kidding itself with its current buildouts - despite AT&T's marketing, those infrastructures won't support the bandwidth demands of IPTV. In order to compete for subscribers, AT&T, Verizon and the rest must be willing to deliver all cable programs in real time. Why? Hammer's customers cache hundreds of hours of content locally, and the bulk of what they want to watch is time-shifted. Whether or not consumers are actually watching all of these programs, they'll be downloading them.
None of the speakers seemed to think that compression would solve bandwidth problems quickly enough. Chapman notes that instead, over-the-top services add a competitive element, forcing the underlying service to improve. He doesn't like artificial controls for QoS within the walled garden; this didn't work for walled Internet gardens like the @Home network. As a service provider, DeMuth agrees that he has to differentiate via quality of service. You can't stick your head in the sand; consumers will go around you using other access options if you can't step up to the new high bar. And in IPTV, the provider knows a lot more about the customer than in traditional TV delivery, so advertising can be much more focused. Hammer sees an opportunity to deliver interstitial advertising that suits the customer, no matter what he or she happens to be watching at the time.
Reality check: Burstein loves his Verizon DSL service, which runs at 3 Mbps, and that's still considered a fat residential pipe. Hammer agrees. Akimbo encodes today in Windows Media, and that's all he delivers to his current customers. He encodes and posts thousands of hours of content each month in this format, and he doesn't think they'll ever be able to post that content in HD.
Do we really need full-length, high-def content delivery? iPod video quality is limited, and people love it. And Price talked about a new trend in the UK called "snacking." Snacking takes full-length films and condenses them into five-minute downloads that you can enjoy anywhere. There are just as many people downloading RocketBoom daily as there are downloading the NBA finals once per year. Though it may be disturbing to see the universe dissolve into a folder of Cliff Notes, it's great to see existing content morph creatively so that it can work in new media. Or perhaps, the new new new media...
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