Is the TV industry prepared for a "Pull" TV model?

It seems as though the worldwide television sector is engaged in a tug of war: "Push" versus "Pull." To date, the industry has for the large part, followed a traditional model--what is known as "push-TV" technology. But if experts are to be believed, the pull-model--in the form of IPTV--is poised to become the more commonplace mode of television distribution and consumption.

Often, IPTV has been broadly (and inaccurately) defined as Internet television viewed through a computer. But IPTV is actually a platform that allows viewers access to both linear and VoD-based television through a broadband connection on regular TV sets. The experience of watching IPTV-delivered television is similar to that of cable television.

"One day, these IPTV platforms may replace satellite networks because they're so inexpensive in comparison to satellite networks," said Bennett Media Worldwide CEO Paul Rich. "To launch an IPTV network is about a hundredth the cost [of launching a satellite network]."

IPTV offers a plethora of opportunities to content providers. Perhaps most prominently, the platform provides a great way to deliver niche services (specifically ethnic channel bundles, which have been exploited most so far).

One challenge facing program holders (and particularly broadcasters) comes in the form of pirated linear channels. It is estimated that at the moment there are several companies worldwide pirating satellite feeds and making them available on their IPTV platforms via TV set-top boxes.

These companies are not just taking the signal posted from broadcasters' websites, but are transmitting an entire streaming channel. "It's up to the program holders themselves to prevent this piracy," commented Slava Levin, president of Canada's Ethnic Channels Group Limited.

According to Levin, whose company has unveiled its own IPTV platform, the only way to combat signal pirates is to take legal action after they are up and running. "It's up to the broadcaster to chase down the company and request that they stop broadcasting the service or, in the worst case scenario, the broadcaster can be liable for copyright violation to the producers," he said. "IPTV is another form of signal delivery; it falls under the same copyright issues as standard DTH or cable distributors. The main difference is IPTV can be located anywhere in the world, and is not bound geographically." Levin's company is protecting itself against pirates by taking legal action. To prevent subscribers from accessing the services outside Ethnic Channels' distribution rights, the company has implemented geographical blocking on the IPTV platform, meaning that subscribers cannot access their content from territories outside Canada. "Illegal distribution of satellites feeds over IP is a big, bad mushroom that's growing out of control," Levin said.

When asked whether it's likely local U.S. TV stations will license material to IPTV providers, one broadcast industry source who opted to remain anonymous was optimistic. "It's good to know that there could be an alternative to cable," he said. Lately, local stations have been involved in disputes with the U.S. cable industry over re-transmission concerns and carriage rights. "We want to get our programs on as many devices as possible." He added that if the IPTV platforms were willing to compensate local stations for their signals the way satellite providers do, it would make them much more attractive partners.

But the broadcast source pointed to the threat of piracy as a possible IPTV-deterrent: "There are enormous copyright implications for broadcasters, and we need to be very careful because though we're 24-hour channels, not all of that content belongs to us." Though the very fact that IPTV allows local stations to travel to all parts of the world didn't bother him, he recognized that many broadcasters view IPTV platforms as unsafe from copyright abuse.

According to Ron Lamprecht, senior vice president, NBCU Digital Distribution, "We've been in the cable industry for decades, but IPTV represents another distribution pipe." While he recognized that IPTV is still a nascent business in the U.S. and conceded that it's impossible to predict the extent to which it will catch on, he pointed to NBC's significant arrangement with AT&T's IPTV platform U-verse as proof that the company clearly believes in the service. NBC has provided AT&T with the rights to distribute about 10 local NBC broadcast linear channels, approximately 10 linear cable networks, a few linear HD nets, and on-demand films--which are available for purchase on an a-la-carte basis. In fact, industry members hope sales of films to IPTV platforms could slap a band-aid on the currently ailing DVD business (which has been hurt by Internet downloads). But, Lamprecht maintained, "The main part is the distribution of our core linear channels."

Lamprecht was careful to point out that NBC Universal's interest in IPTV extends beyond its AT&T U-verse deal. "We think about this as a larger category. There are hundreds, if not thousands of other operators looking to get involved in this," he said.

By the end of 2006, there were more than three million IPTV subscribers in Europe and 30-some odd IPTV operators across the continent. Those operators come most often in the form of traditional telecom companies becoming programming aggregators, even though the programming field could be open to all.

Seeing that its satellite TV platform could be in danger, Rupert Murdoch's British Sky Broadcasting recently made headlines by investing in broadband. In mid-2006, the company made a deal with DSL provider EasyNet, paving the way for Sky Broadband. It's also interesting to note that BSkyB's parent company, News Corp., has sold its stock in U.S. satellite service DirecTV.

According to industry insiders, the next five years will bring a sea change, with more of these models cropping up. "Clearly the future of television is based on the pull-model," said Gene George, president of Regent Entertainment, a company that specializes in selling films to TV broadcasters. "Consumers will have more choice in the future, but they'll have to have the proper platforms to get more." LCB