Experts tout IPTV but advise caution

At Globalcomm 2006, a host of industry experts illuminated the path to competitive IPTV offerings but cautioned carriers against rushing down the path too quickly.

With the right feature set, telcos can grab 20% of the residential video market, said Christine Heckart, Microsoft TV's general manager of marketing. In the company's recent surveys, consumers preferred next-gen features such as TV alerts or being able to program the TV remotely from a mobile phone. But no one feature was universally popular.

“It didn't matter what we tested,” Heckart said. “They loved anything that put together the TV and the PC.” However, she warned against trying to add new features too quickly. “We have to be careful to remember that the reason people watch TV is to relax and be entertained,” she said. “Once we do that well and earn their trust, we can introduce them to new experiences.”

Too many features will deter customers by inflating monthly bills, others warned at Telephony's IP Summit. “If you build a business model assuming you can add all this stuff and charge $100 a month, you're going to be surprised at the take-rates,” said Steve Klein, Zhone Technologies' director of video solutions. “Don't try to sell them the whole tamale to begin with. There's a huge game of upselling over time that you have to carefully plan for.”

Eventually, carriers may segment their offerings by price, lowering prices for subscribers willing to watch advertising in exchange, said Reed Majors, director of IPTV solutions for Amdocs. And telcos can use it as a differentiator.

“If you have the software and the contracts to support that, that is going to happen in three years,” Majors said. “Cable and satellite are eight years away from being able to do that.”

“People ask me, ‘Why isn't it going faster?’” Heckart said. “My God, IPTV has done in three years what it took cable 30 years to do. I don't want it to go any faster because I want to make sure we get the basics right.”