More on open versus closed or IPTV v broadband TV

WebTV

It was interesting to read on Vecosys yesterday the rumour that BT is struggling technically with it’s IPTV play BT Vision.  The problem it seems is Microsoft’s IPTV platform which isn’t “performing or scaling”.

I have heard separately that BT has been talking with alternative PCTV platform Joost and I trust Sam and his links to BT – so whilst this is far from fact my guess is that there are some worried people at BT Vision right now.

This doesn’t surprise me.

BT Vision is a fully integrated service from content through ISP, to set top box and television.  The only choices the consumer has is what PC she uses and what sort of television she wants.  (More detail about the BT Vision service and some of my earlier thoughts about broadband TV here.)

This closed approach mirrors the existing PayTV value chain but swaps satellite or cable for broadband.  This is what I am calling IPTV.

The reason I am not surprised that BT is having difficulty is that end to end service provision is an extremely complex undertaking.  As a service provider you have to get everything right.  That means all your technology and network decisions and your choices of content to make available on the platform.  A small example of how this can go wrong is that BT Vision doesn’t support Mac – maybe a big deal or maybe not depending on PR and early adopter crowds, but an example of the sort of decision that has to be taken and that can go wrong.

It is interesting that BT are struggling technically, because to my mind it is the content choices that are the real difficulty. If you believe we are heading to a long tail world then it is difficult to see a single service provider striking enough deals to make much of that long tail of content available.

The alternative to this closed IPTV world is an open broadband TV world.

When I think about truly open broadband TV I mean a service that you subscribe to from a website.  Simple as that – no forward integration to a set top box and no upstream integration with content providers.  In my mind there is little doubt that over the medium to long term truly open services will prevail.

The short term picture is more complicated though – as I have written before in the short term the fat head of content is likely to stay with integrated TV services – be it via satellite, cable, or IPTV.  But as I explained above I expect these services will struggle to satisfy demand for long tail content – and I think this might undermine their long term success.

High profile services like Joost (as the Venice Project has been renamed) and Bablegum are not open in this sense either.  They are more open than closed IPTV services like BT Vision because there is no downstream integration from the PC – but as far as I can tell they are walled gardens with respect to content.

Walled garden plays can be very lucrative for a period of time (look at AOL) but ultimately open plays will win out (take another look at AOL).

  • Interesting post Nic. Wanted to develop one of your points:

    ” difficult to see a single service provider striking enough deals to make much of that long tail of content available”

    I agree. And if this is the case, then it follows that consumers will need to go to source (i.e. a website) to watch various pieces of TV / Video. In practice this will mean many sources. And here is the problem. I don’t think consumers will want to keep going to lots of different sources. Instead they will aggregate. And if they aggregate then they will need an interface to aggregate (which is why I think Netvibes and Pageflakes are not only cool but also only the tip of the iceberg of what aggregators can become).

    Behind this, is in my view, a more interesting debate: who is doing the aggregating? For example, right now, millions of people trust the editorial choices that Channel 4 makes. (Channel 4 is simply an aggregator which makes choices about what certain demographics want to watch). Except Channel 4 are lucky because they also get to sell ad inventory.

    My questions are these:

    Q1. Rather than trusting my aggregation to Channel 4, what if I “outsourced” this and simply used the aggregation choices of my pals, or community? Who is creating this infrastructure on the web? YouTube? (sort of). Joost? (half way there within a semi closed environment.) There’s lots of white space….

    Q2. YouTube is a crude aggregator and is completely failing to get advertising to fund content: just last Friday Viacom axed all of their content on YouTube saying Google was failing to “extend.. fair compensation to the people who have expended all of the effort and cost to create (content).” Channel 4 sell the ad-inventory because they “commission” the shows. I.e they pay the content creators. Could this happen online? If so wouldn’t be back to the old “closed system”?

  • Interesting post Nic. Wanted to develop one of your points:

    ” difficult to see a single service provider striking enough deals to make much of that long tail of content available”

    I agree. And if this is the case, then it follows that consumers will need to go to source (i.e. a website) to watch various pieces of TV / Video. In practice this will mean many sources. And here is the problem. I don’t think consumers will want to keep going to lots of different sources. Instead they will aggregate. And if they aggregate then they will need an interface to aggregate (which is why I think Netvibes and Pageflakes are not only cool but also only the tip of the iceberg of what aggregators can become).

    Behind this, is in my view, a more interesting debate: who is doing the aggregating? For example, right now, millions of people trust the editorial choices that Channel 4 makes. (Channel 4 is simply an aggregator which makes choices about what certain demographics want to watch). Except Channel 4 are lucky because they also get to sell ad inventory.

    My questions are these:

    Q1. Rather than trusting my aggregation to Channel 4, what if I “outsourced” this and simply used the aggregation choices of my pals, or community? Who is creating this infrastructure on the web? YouTube? (sort of). Joost? (half way there within a semi closed environment.) There’s lots of white space….

    Q2. YouTube is a crude aggregator and is completely failing to get advertising to fund content: just last Friday Viacom axed all of their content on YouTube saying Google was failing to “extend.. fair compensation to the people who have expended all of the effort and cost to create (content).” Channel 4 sell the ad-inventory because they “commission” the shows. I.e they pay the content creators. Could this happen online? If so wouldn’t be back to the old “closed system”?

  • nic

    Thanks Paul, great comment.

    I had assumed up to now that the aggregators for broadband TV will be vertically focused. Netvibes et al will have to expand their functionality significantly to get there.

    To your questions – fully open aggregators – TIOTI is the most prominent in the UK.

    Re models – I am expecting a range of ad funded, subscription and pay per view options. How rights get protected through all of this is a difficult and unanswered question.

  • nic

    Thanks Paul, great comment.

    I had assumed up to now that the aggregators for broadband TV will be vertically focused. Netvibes et al will have to expand their functionality significantly to get there.

    To your questions – fully open aggregators – TIOTI is the most prominent in the UK.

    Re models – I am expecting a range of ad funded, subscription and pay per view options. How rights get protected through all of this is a difficult and unanswered question.