By Dom Serafini

The April issue of VideoAge touched upon several aspects of Internet Protocol TV, which, among other things, brought to light many misconceptions about IPTV. In many instances during our research, some content providers –– interviewed as experts or called upon to comment on the subject –– would insist on indicating systems of some Web-related operators as IPTV.

Let’s now make it clear that what we define as IPTV is not an audiovisual stream of the type played on a computer.

In addition, strictly speaking, IPTV is not a “walled-garden” system like Verizon’s FiOS in the U.S., where users need to connect set-top boxes (STBs) to their local optical fiber network. FiOS and similar systems are basically cable systems of the “push” type, which, at least in the U.S., require municipalities’ franchises.

IPTV is a “pull” TV platform that competes with cable and satellite, and it’s totally unregulated. In effect, it’s a “cable bypass,” or as explained by a U.S. studio’s executive: “IPTV is just like a normal cable signal that uses Internet protocol. It works just like cable’s linear channels, but the STB uses a different protocol to interpret the signal. It is still closed circuit and only for TV.” Let’s explain it better.

Cable companies have traditionally consumed enormous amounts of bandwidth by sending all TV channels across the cable network at the same time (“push” technology).

Streaming media is usually consumed from a computer. If the computer has audio and video terminals, the streaming can be also be seen on a regular TV set. In this case, though, the video quality decreases with the increased picture size.

In any case, when we talk about streaming video, we refer to it as Internet, and therefore the content is licensed as Internet rights. The same goes for computers’ download systems, even though –– through such devices as the new Apple TV or Microsoft’s Xbox 360 –– programs can be viewed on TV sets.

If, on the other hand, content rights are sold for platforms like Verizon’s FiOS or Free (in France), the license is like any other for cable or satellite rights.

Those platforms are of the “pull” TV types because transport is in the form of a proprietary (or “walled-garden”) broadband system: dish antenna, coaxial cable or optical fiber (be it fiber-to-the-node or fiber-to-home) delivery.

Therefore, the rights for any broadband proprietary (i.e. “walled-garden”) platform are like selling programs to a cable MSO or satellite system that sends (pushes) TV signals as a six MHz channel in North America and seven MHz elsewhere.

On the other hand, when we talk about IPTV, we refer to it as a “pull” TV system that can be connected to any broadband: Wi-Fi (wireless), cable and telephone lines (DSL) anywhere, regardless of the high-speed provider. Up to this point IPTV is similar to the computer’s “streaming” audiovisual system analyzed above, hence the confusion. But this is where the similarity ends. IPTV tends to use compression and streaming of the MPEG-4 and other technological advanced families, and the new generation STB needs speeds of only 500 kbps. But most significantly viewing is done through a regular TV set at a quality comparable to standard-definition digital TV.

It is also important to understand that an IPTV subscriber can take the rented or purchased STB anywhere in the world that has any kind of broadband connection. That is, if an NTSC (30 frame/s) set-top box is purchased while visiting relatives in New York, it can also be utilized in Chile (to receive channels that have not requested “regional blocking”). After all, all payment transactions are done by leaving credit cards on file (including the deposit of the loaned STB), and the conduit for the signals is the Inter-Net.

With this in mind, let’s think of the implications. First to be affected will be satellite TV. After all, why install a cumbersome dish on the roof, when a one kg STB connected to the telephone plug will do? However, satellite operators are the best program aggregators, so what could happen if they exchange their satellite STBs for IPTV boxes? Well, for starters they will become the de facto gatekeepers and, second, IPTV will allow them to increase their penetration (now limited by satellite orbits and city and other restrictions). Perhaps, this is why Telcos –– IPTV’s natural players –– are now looking to acquire satellite TV platforms.

Then, let’s think about the new opportunities for linear channels, which could easily monetize their signals beyond their coverage areas, at an international level, if well prepared.

Finally, there are implications for rights holders who have to adapt to this new technology by licensing language rights, rather than territorial rights, which is not so easy in the case of the Spanish or English-languages.

In conclusion, IPTV is here and growing at lightning speed. Unfortunately, the whole industry needed, but failed, to address it yesterday, focused as it was on money-losing cellular video.