Dec 7, 2005 5:20 PM,

Running the numbers

By Vince Vittore

A good friend of mine had a grandmother who owned a bar in Pennsylvania coal country. This isn't the beginning of a joke. Really. Her job, besides lightening the wallets of miners on Friday night by filling them up with booze, was running a lottery of sorts, a numbers game. Yes, it was illegal, but she's long been gone so the statute of limitations is up. And besides, local cops often participated because they were paid just as poorly as the miners.

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Based on some recent projections of IPTV and the numbers being thrown around, I get the feeling we're all in the same type of lottery. There certainly are going to be big winners who will trumpet their winnings as if they knew their number was coming up. And there will be plenty of losers left scratching their heads, wondering how on earth a "can't fail" plan did just that.

The best-guess estimate of the IPTV market right now is that there are about 1.5 million users worldwide. That's up from roughly 1 million at the end of last year. The majority of those are in Asia, specifically Hong Kong, according to Point Topic.

Will that take off into the tens of millions that some are projecting? Not likely. For sure, there will scattered areas where IPTV is a huge success. But more than likely, particularly in the U.S., the numbers will be more modest. BellSouth today said it's not completely sold on the economics of IPTV, which is logical given that the RBOC will be entering most markets as a third provider.

What's more striking, though, is that BellSouth isn't reverting back to a narrowband network focus or deciding to stay away from video. To the contrary, the RBOC is the sole survivor of the former Americast partnership, which once had grand telco TV plans of its own. And like AT&T (nee SBC) it's done a solid job of selling DirecTV service. Instead, the company sees the need to push the bandwidth limits up into the 20 Mb/s range. It's just not sure video is going to be the application that brings it the predicted lottery windfall.

Think you're going to be the big lottery winner?

E-mail me at VVittore@primediabusiness.com.