IPTV’s uneasy alliance with OTT video

By Giles Cottle

One aspect of the IPTV World Forum which was perhaps surprising and completely unsurprising at the same time is how little of the event was developed to pure IPTV. Sky, Opera and UK online video start-up Blinkbox are just three of the names on the agenda who have relatively little to do with IPTV as it has historically (can the word historic be used for a technology that has been comercailly available for under ten years) been known. Opera, of course, is part of the Open IPTV Forum, but is at the event launching its HbbTV solution, something which may prove extremely disruptive for the likes of Deutsche Telekom and Orange.

Yet the presence of such companies at the show was not a result of them sneaking under the fence while the steely glares of the traditional operators were turned elsewhere. Many companies other than telcos have now started to use IP to deliver their content. In fact, I’ve lost count of the number of vendors who have claimed that they “have stopped calling it IPTV now”.

There is no doubt that many IPTV providers are still wary at the IPTV opportunity. One operator I spoke to looked at me with a mix of confusion and mild contempt when I asked him whether his firm was considering adding over-the-top content to its IPTV offering.

Yet many of his contemporaries are doing just that. Hybrid services which combine managed TV and over-the-top services are almost de rigueur at the event, with numerous vendors touting kit which aims to help the most reticent of operators easily embrace the OTT opportunity. Turkish firm Airties offers an interesting solution. Its line of hybrid products not only integrates over-the-top content, but does so wirelessly. This eliminates one major consumer frustration in the connected home: having wires trailing messily around the house.

Interestingly, it is not the larger IPTV operators that are offering and embracing such services, but newer, smaller providers. Airties showed off a service it has developed for Dutch cable provider Caiway, which has only a few hundred thousand subscribers. Airties is also offering services in the Ukraine and Greece which, with the upmost respect to both markets, do not sit at IPTV’s bleeding edge, service-wise at least.

For providers in such markets, offering this kind of OTT content makes perfect sense. In more developed TV markets such as the Netherlands, offering OTT content can be a great point of difference for smaller providers compared to what the incumbent pay TV providers are offering. And in markets with low TV ARPUs and high levels of piracy, it makes more sense for an operator not to act not as a one-stop content shop, but to allow users to manage their own content via the platform. Spending millions on expensive content rights is all very well, but it’s not of much use if consumers will not shell out for this content, no matter how attractive it may be.

One can’t help but wonder if some of the larger operators who, despite spending big on content acquisition, have yet to make any success out of IPTV, would not also have embraced this strategy, had they known the difficulties that awaited them in the vicious world of conventional pay TV.

The debate over the merit of these types of services is also taking place against a backdrop of potential regulatory shiftts which could change the game in terms of content acquisition strategies. In the UK, France and Singapore, lawmakers and regulators are either making pay TV operators offer their sports content to other providers on a regulated wholesale basis, or banning exclusive sports rights altogether. This will weaken the classic pay TV strategy of expensively acquiring exclusive content. It also strengthens the argument that operators should position themselves not just as providers of content, but also as an avenue by which consumers can store, access, manage and share their own content.