IPTV's DVR strategy is flawed

IPTV is reaching the mainstream, but there's still a big gap between what providers are offering and what consumers really want. A great example is the set-top box/digital video recorder offerings on the market today.

A typical high-definition (HD) DVR can record two HD programs simultaneously, although some are still limited to one HD stream. Match that with demographics — multiple TVs (often multiple HDTVs), multiple users, multiple networks showing “can't miss” programs once a week in prime-time slots — and you can see where I'm heading. In my house, with two adults, two teenagers, two “tweeners” and four HDTVs, 9 p.m. prime time isn't family hour — it's often conflict hour.

Because DVRs can't scale to support our needs, we must compromise constantly. But then the SciFi Channel has an all-weekend Star Trek marathon or there's a back-to-back Hannah Montana day on Disney, and the consensus evaporates. The bottom line: Hardware-based DVR streams have some severe limitations.

Outside the U.S., where it's legal, IPTV providers offer network-based DVR services, which let users view any program that has been aired within a set time frame. Here in the U.S., content providers are fighting such plans. At the same time, however, through Web sites and projects such as Hulu.com, the networks are putting programming on the Internet soon after it airs. Because that content is always available, the effect is similar to network-based DVRs.

So if all the content I'd like is available over my existing broadband line, why do I need IPTV service? All you need is a nice little user interface, or UI, to tie everything together, and there's no longer a need to pay a ton of money each month for IPTV. Throw in the ability to watch Netflix online, and there goes IPTV video-on-demand, too.

It becomes a matter of which STB I'm using and which UI. If it's on the big screen, do I care if it comes from a broadcaster directly or from the telco? This gets to the heart of the Net neutrality debate and the ability to charge for video bandwidth. It also gets to the heart of an opportunity that TV manufacturers feel is their big growth industry: network-enabled TVs.

While customers who wanted to watch network-provided content historically have done so on a PC or, for the tech-savvy, through a complicated marriage of PC and TV, it's going to come on-board TVs and small dongles pretty soon. That cuts out the service provider's most important interface to the customer: the STB/DVR.

This is a tough issue IPTV providers must face: Where's the value with IPTV? If the service's value is in advanced applications, there will be boxes and operating systems that are more open to external apps than IPTV. If it's in the merger of metadata with content to enable neat mashups, the Internet will move faster on this than IPTV. Furthermore, arguments that users don't want the Web on their TV are wrong. They just want a better UI than a bulky keyboard, and these are already coming.

In the end, bundling alone won't save the day for IPTV. Making your DVR package better than cable's isn't enough to keep users from getting content elsewhere. I'd propose a better DVR service plan for the IPTV players — one that marries the broadcast world that IPTV already handles, the storage of the DVR and the Internet content that customers currently bypass the service provider to get. After all, isn't that really the true promise of IPTV — the ability to greatly expand the sources and types of content that a user can get or his or her TV?

Danny Briere is CEO of TeleChoice. He can be reached at dbriere@telechoice.com.