Despite the extreme immaturity of this market, it is possible to identify a number of service offers enabled by ipTV technology.

Catch-up TV

Much has been made of the opportunity for time shifted viewing afforded by ipTV. With their increasingly busy lives, today’s consumers want to be able to watch their favourite programmes at a time that suits them rather then having it dictated to them by a TV network schedule. The growing adoption of PVR technology, like the Sky+ service, is indicative of this demand.

A catch-up TV service will typically allow consumers to access programming from a broadcaster’s schedule, within an agreed time from transmission, free of charge. Viewers will be able to download the programme either to a PC or a set-top box and watch it at their own convenience, as long, of course, that it is within the agreed time. After this period has elapsed the programme file will be wiped using Digital Rights Management (DRM) software. DRM will also prevent users from sharing programmes either by email or by burning it to disc. Many broadcasters are looking at providing such a service; in fact the BBC has recently completed a consultation on the use of its own integrated Media Player (iMP) that offers just that.

Video on Demand

A Video on Demand (VoD) service will allow viewers to download content and view it as and when they like. More flexible than a catch-up TV service, VoD will not be constrained by the timing of scheduled broadcasting. However, there may be limits to the length of time that a user can store and view the content and there could be a cost attached. For instance, Channel 4 has made past episodes of Lost and Desperate Housewives available via their website at a cost of 99p, but these must be watched within 24 hours of downloading. It may be some time, however, before viewers will be able to download them before they are shown on conventional TV platforms.

VoD technology allows broadcasters to offer consumers the convenience and choice they want, but more importantly, it allows them to take back control of the content from the unlawful file sharers. The music industry suffered greatly from the early proliferation of illegal music sharing websites. Whilst this remains an issue for the industry, the success of legitimate download services, like iTunes and the reformed Napster, illustrate that people are willing to pay for content if it is delivered cheaply and in a simple, intuitive way.

Whilst any type of content could be sold in this way, VoD is a particularly strong proposition when used for the distribution of films. Consumers are already familiar with paying to view films on a pay per view basis, whether that is through their digital TV service or by going to the nearest Blockbuster store. Again, the appeal comes back to the desire for convenience and choice. Movies on demand mean that consumers need no longer worry about late fees or returning DVDs. It also allows media owners to offer a far greater range of films than they could on a conventional scheduled movie channel. Sky for instance offers more than 300 movies to download on their Sky by broadband service.

Linear TV

Perhaps the most conventional application of IP technology is the provision of scheduled or linear TV broadcasting via a broadband connection. Whilst there are numerous deployments of this nature around the world, the UK market is quite different. The only service currently available is Homechoice, though as a result of its very early entry into a market unready for its services, this is up for sale with substantial losses.

Some believe that this situation won’t change significantly; “There won’t be another Homechoice”, predicts Alex Cameron of Digital TX. However, existing multi-channel operators will use ipTV alongside their existing infrastructure to serve areas they cannot currently reach. Sky, for instance, is looking into the opportunity to infill gaps in their coverage of the UK; “If someone lives on the side of a hill they might not be able to receive our satellite broadcasts”, says Scott Deutrom, Head of Online Sales at Sky. “It’s all about maximising the reach of the Sky service”.

The Freeview platform already offers a very cost effective mechanism for the delivery of a linear TV service via terrestrial methods. New market entrants are using this as the basis for hybrid services, augmented by ipTV applications like video on demand, which offer a point of differentiation from competitors. BT Vision, the ipTV service to be rolled out by BT this autumn, offers a set-top box delivering the Freeview channels combined with a PVR and video on demand service.

Streamed video

In an ipTV enabled world, it is not inconceivable to foresee that the majority of TV viewing will be on demand, watched as and when the viewer wants to. However there will still be ‘appointment to view’ programming, most notably sport, that consumers will always want to watch live. Sports fans want to see the action as it happens and enjoy the communal viewing experience that often accompanies such events. Live programming will obviously be part of a linear TV service but there is the opportunity for content rights holders to stream it through their own websites or offer it up for syndication. FIFA, for instance, put several deals in place to allow people around the world to watch this summer’s World Cup games over the internet.

Triple play

Triple play is the term used to describe a package of services that includes high speed internet access, television broadcasts and telephony all over a broadband connection. The appeal of these to consumers will be the convenience of only dealing with one company, providing a range of services for a single, competitive price. As the demand for combined services increases, many players in the UK are making moves in an attempt to secure their position in the market. NTL acquired rival cable operator Telewest and now Virgin Mobile, allowing them to offer a ‘Quadruple Play’ package including mobile. BT has rolled out its broadband telephony service and is due to bring its ipTV offering to market before the end of the year, whilst Sky have added broadband and phone services following the purchase of ISP Easynet. This is shaping up to be a highly competitive market, requiring the main players to make significant investment in marketing their offering, as well as the infrastructure and content.

Mobile

Mobile operators who bid many billions of pounds for 3G licences have a powerful incentive to find applications that will appeal to consumers and help them to recoup this investment. Video phone calling has not excited consumers but 3G does permit easy downloading and even streaming of TV content. The small screen size of a mobile phone provokes consideration of the type and length of programming that will appeal, but there is little doubt that a ‘must-carry’ device owned by the vast majority of the population presents a real opportunity for content owners and service providers.

Media owners are already experimenting on a small scale with providing content directly to mobile phones via 3G networks. Each of the major operators has a mobile TV offering such as Sky’s deal with Vodafone to supply a feed from Sky News and Sky Sports News. Similarly, all the traditional broadcasters are actively working with operators to understand how consumers will use mobile TV. For instance, Channel 4 has made episodes of Hollyoaks available to subscribers of Orange and Vodafone.

The development of online ipTV offerings will be rapidly followed by their extension to mobile devices.

The influence on viewing behaviour

The BBC’s Integrated Media Player trials have given the first large scale insight into how UK consumers will embrace online on-demand content. 5,000 people were given the chance to access BBC television and radio content for up to 7 days after the original broadcast. Participants downloaded an average of 13 programmes each month and prime-time viewing shifted by several hours with most on-demand viewing occurring between 10pm and 11pm, outside TV’s usual peak of 7pm to 10pm. This shift speaks more about those who made most of the trial rather than any broader change in viewing behaviour, however, once the service has its full launch, it is anticipated the early adopters will most likely be viewing their programming later in the day. With TV being squeezed around other activities, people will be watching when they return from working late, the pub or gym, driving a change in media consumption patterns.

A potential obstacle to the widespread adoption of ipTV is how the content will be viewed once it reaches the consumer. Although a handy catch-up mechanism for missed programmes, families are unlikely to gather around a PC to view the latest episode of Doctor Who. The ability to transfer the content onto TVs and portable devices like iPods is essential, as Simon Spanswick, Chief Executive of the Association for International Broadcasters, pointed out, “The interaction of ipTV with other platforms – allowing consumers to engage wherever they are, on whatever platform they choose – is vital.”

Dealing with massive choice

People like to have more rather than less choice, but this presents the very real challenge to create intuitive and efficient navigation systems. As Alex Cameron of ipTV consultancy, Digital TX, observes, “If you plan to use unlimited content as a selling point, you had better have the world’s easiest way of finding your way around it.”

With a conventional scheduled TV service viewers can channel surf or check the TV guide to see if anything catches their eye. But with a huge library of VoD content available to them, where do they start? Scott Deutrom, Head of Online Sales at Sky, draws parallels with the challenge faced by smaller satellite channels. “In order for those channels that are a long way down the EPG (electronic programme guide) to be successful the content has to be strong, you have to be sure there’s an audience for it and that there is good marketing and signposting.” In this schedule-free environment, there is a test for aggregators in helping viewers find what they want but also in promoting new programming to them.

Existing search technology will go a long way toward helping viewers find shows they know. And together with the personalisation capabilities of IP technology, a service can learn viewers’ favourite programme types and present them automatically on the content menu.

Promoting new shows presents more of a challenge. Currently, promotions for new programmes are transmitted at relevant points in the linear schedule by broadcasters. In a market which has substantially moved away from linear transmission of programming, content creators will have to find new ways to market their shows. Aggregators will learn from existing internet operations that already deal with the provision of vast choice. Lists of the most popular shows, some of them user-generated, demographically targeted trailers or recommendations based on previous purchase behaviour, like those used by online retailer Amazon, will all play a role in assisting viewers to find their way to appealing programmes.

Whilst these techniques will help, in conditions of market uncertainty, people will rely on existing brands to guide them. “People will still need their hands held a bit”, said Richard Ayers, Portal Director at Tiscali, “There is a place for trusted brands that can fulfil this role”. So traditional broadcasters, as well as established internet players, will have a brand advantage in this new arena.

Errol Baran, Head of New Media Advertising at Channel 4, is very confident of this; “Of course [other companies] will move into this area but Channel 4 has a brand of enormous strength. It is a respected voice, providing editorial and entertainment of the highest quality”.