IPTV, I hardly recognized you

Things used to be so simple. Way back in the dark ages of 2007, IPTV was relatively easy to define for any company that had some skin in the game. For most of the telecom world, IPTV fit into a nice neat package with clear boundaries. It was a service delivered by incumbent telcos over an IP steam to a television set. It was also the revenue stream they could count on to blunt the devastating impact of declining access lines. But if the service met the three basic requirement of telco, IP stream and delivered to a TV it was IPTV.

In the intervening two years, the IPTV concept has been adopted, evolved and warped to the point that putting any definitional constraints on it are challenging if not impossible.
Like beauty, IPTV is in the eye of the beholder.

Two recent cases from providers in different geographies illustrate the problem. The first is a cellular provider in the Middle East that wants to lease wireline capacity from the incumbent carrier and provide video-on-demand as part of a packaged service that also will include terrestrial off-air linear programming. Is that IPTV?

The second comes from Latin America where an incumbent operator is attempting to get around regulatory restrictions that restrict “traditional” IPTV by providing a video-to-the-PC service. Is that IPTV?

Circa two years ago such plans would haven’t qualified as IPTV, but under the current state of the market I believe we have to greatly expand such definitions.  IPTV isn’t just about incumbents, TVs or even IP anymore. Heck it’s not even just about telcos anymore. Cable operators are having their own robust debate over their own version of IPTV, which will blend their existing DOCSIS infrastructure with IP-based video. To be sure, we continue putting parameters around the definition. After all, as analysts if we can’t put things in buckets it becomes extremely difficult to analyze and assess the strength of a market.

So what is IPTV now? Instead of simply limiting IPTV to the essential elements of incumbent, IP and TV Yankee Group has expanded that definition to include non-incumbents, mostly in the European context where operators and physical layer infrastructure are not wedded in regulatory structure. Additionally, we’ve also expanded to include those operators who may not necessarily be fully IP. Indeed we place Verizon’s FiOS TV in the category despite its very cable-like treatment of linear channels.

This isn’t to say we believe any video with a whiff of IP qualifies as IPTV. What we specifically don’t include is web-based, best effort video. We also separate out cable operators for now though given above mentioned interest in IPTV there are likely to be future shifts.

In many ways, the decision to expand the scope of what we call IPTV is reflective of the evolution of the service itself. It’s long past the science experiment stage and moving well into a differentiating service. Given the transformative entertainment experience that it can provide and the evolving nature of content that will blossom on the platform, it’s time for IPTV to shed its rigid definitional boundaries and include business models that don’t quite fit the tradition.