IPTV delays continue

Nice piece on Businessweek.com, I Want My ITV. Nothing in it is earth shaking to video pros, but it’s a nice roundup of the main characters – cable, broadcast, TiVo, and the studios – along with some mention and explanation of Apple TV and Amazon’s Unbox.

Want to know why IPTV is unknown to the masses? The answer’s in the numbers.

But what’s holding up the transition from network TV to networked TV is that any company with a little piece of control in the way things work today is unwilling to jeopardize its power and revenues until it becomes clear how the new model will pay. Every time you hear about some product that sounds great but just has one strange limitation, follow the money to understand why. Hollywood worries digital downloads could lead consumers to stop buying $24 billion of DVDs annually, and broadcasters are nervous about the fate of the $185 billion-per-year TV advertising kitty. So studios and networks alike limit how long programs are available on Web sites or restrict the shows that play on various devices.

With that much money on the line, it’s no surprise players are moving slowly. There’s more to the story, though. The real cause for the delay is perceived lack of demand in America.

Most regular people still haven’t viewed their first TV clip on a computer screen. But a survey by the Conference Board-TNS shows that 16% of American households with Web access now watch full TV broadcasts online, double the number from a year ago. And visitors to parts of Europe and Asia can see how far behind we are in personalizing our TV experience. Speedy, reliable broadband access in those regions can deliver richer video service, and because providers face real competition, they have to add Webby services to television as a selling point. Today, some 60% of all households in Hong Kong watch programming delivered over the Internet to the TV, says researcher Parks Associates. From a hotel in Seoul, I can click to do my banking on TV. A couple of friends I know live on the frozen tundra of Canada; even there, I can play games or get onscreen score alerts of favorite sports teams.

The growth rate might seem impressive, but it will hit a glass ceiling. Broadband in the US doesn’t compare to broadband in Europe and Asia. A typical 1 to 3-megabit connection shared among a few PCs in the household, won’t deliver adequate performance to satisfy on demand needs.

To gauge demand for IPTV, learn the behaviors of Verizon FIOS users as they get used to their connection. I suspect devices like Apple TV that have failed to catch on with all but the Engadget crowd will do fine once the wait times for content diminish.

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