Tuesday, July 12, 2005
Internet TV Becomes a Reality
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Phone companies Verizon and SBC as well as Japanese Nippon Television Network are pushing to deliver TV content over the Internet, and plan to roll out systems later this year.
The companies are pushing to deliver television programs over an internet
platform, a movement that is expected to increase the competition between
broadcasters and offer more program choices.
Major regional US phone companies SBC Communications and Verizon, plan to roll
out their first systems later this year in the US market.
BellSouth, another major phone carrier, is also testing Internet protocol
television (IPTV), and trials are underway in Britain, Switzerland and
The technology is more like a "video on demand" concept. Internet television
would give viewers access to virtually unlimited channels and programs, by
offering access to content stored on servers. The advantage of the video on
demand internet technology over the multicasting technology, is that the utilization of the available cable bandwidth is better.
The IPTV technology would also make the TV set and computer interchangeable and
will allow consumers to schedule or record programs via other devices, such as
While cable companies are constrained by the size of their pipe, we have
virtually unlimited content potential," said SBC spokesman Larry Solomon.
Globally, about 15 million households will have IPTV services by the end of
2007, up from the current level of 600,000 homes, according to a report from
the consulting firm Research and Markets. Global revenues from the sector will
exceed US$7.5 billion in 2007.
SBC and Verizon plan to launch their first pilot program late this year in the
regions where they are the dominant phone providers, with wider rollout
expected in 2006. BellSouth has only announced it is testing the Microsoft IPTV
It is unavoidable that the internet TV service will be competitive with
current cable TV. Its major advantage, however, would be its rate-free
character, as opposed to current cable TV services offered.
Verizon, meanwhile, is pitching its service as closer to the current type of
cable TV offering, with additional capabilities, and also sees potential in a
"bundle" of telecommunications services, giving customers a choice of phone,
video and Internet.
"When we go to market, we'll be offering a digital broadband TV service, which
will mean hundreds of channels and include video on demand," said Verizon
spokeswoman Sharon Cohen-Hagar.
"In addition to the channels you would expect to see, there will be a lot of
channels that speak to specific interests, perhaps for certain ethnic groups.
Everyone will have video on demand, and it will be easy to navigate."
Yankee Group's analyst Adi Kishore said phone companies are pushing for this
because their traditional services like phone and Internet are now open to
"They realize they are taking a beating on the broadband side and they need to
make investment in video, because there are no other substantial growth
opportunities," he said.
The telecom firms, however, face considerable regulatory hurdles, including the
daunting task of getting approval in thousands of municipalities. But they are
pressing for measures to get statewide or nationwide approval to deliver the
Nippon TV to start Web broadcasting in Japan
Japan's major TV network, Nippon Television Network Corp. , will also start
distributing programmes on a paid Web site in October, aiming for annual sales
of 10 billion yen (US$90 million) within three years.
According to the Japanese Nihon Keizai newspaper, NTV plans to offer more than
10,000 programmes, including dramas and variety shows, on the members-only
site, charging a flat fee of 100 yen for each programme.
The network aims to attract 10,000 members within a year.