The telecoms and broadcast sectors are still a-buzz about IPTV - unless you ask Ricky Wong, chair and co-founder of Hong Kong's City Telecom, who lamented last week about ever having entered the IPTV business in the first place.
"I launched IPTV because I had no choice," Wong said at the IPTV World Forum Asia conference in Shanghai. "PCCW launched it and HGC launched their service, so I have to pretend to be a serious long-term player to my consumers. If not for that, I wouldn't have bothered with IPTV."
Wong went on to explain that he believe IPTV should not be a "cable substitution service", but something that cable couldn't offer - for example, a mechanism to integrate user-generated content. "IPTV should be a center to connect all the apparatus around you, whether it's an iPod, an Xbox console or a 3G phone," he said.
Actually, that's been a recent mantra at recent IPTV get-togethers - it's about value, not video. Interactivity, VOD, VAS - these are the things that will make IPTV a success.
Which may or may not be bad news for DBS/DTH operators.
Consumer-geared satellite services have traditionally had a problem with interactivity, which requires a return path from the customer premises, or a two-way dish that was more expensive than the standard downlink-only model. A more recent option - currently being flaunted in the UK by BSkyB - is a hybrid set-top box approach in which IP video and DBS are supported on the same STB.
Viewers get their regular channels from satellite, but the return path is a DSL link that also serves as the downlink for VOD services offered by BSkyB.
Hybrid STBs (HSTBs) can also be used to combine IP video with DTT or even cable TV, but ABI Research says that satellite/IP HSTBs will comprise 20% of the market this year, but by 2011 will account for the majority of the HSTB market.
That's promising news in the sense that it allows DBS/DTH players to compete more effectively against cable operators that haven't yet digitized their networks, and IPTV players who are already looking at interactive services and VOD. In theory.
In practice, however, it's not likely to be so easy. For a start, you'll need access to that DSL line, which may mean partnering with a telco, depending on the state of lop unbundling in your service area. Second, full interactivity on the same level as what IPTV operators are planning to offer in the next couple of years remains a tall order for satellite, according to Thomas Choi of Asia Satellite Broadcasting, who said at the Digital Entertainment summit in Hong Kong last month that fully-interactive services like e-commerce and shopping are five to ten years away.
The main unknown, though, is the viability of VOD in the first place. It's been touted as the Holy Grail of TV services since the early 90s, but after dozens and dozens of trials worldwide, no one has ever launched a successful VOD service. That's not to say it can't be done, but as an executive of Widevine told me at IPTV World Forum Asia last week, "Everyone's learned over the years that there are so many elements that you have to get right - the interface, the billing systems, cooperation from studios, conditional access, DRM, and so on. You can't just slap a bunch of videos on a server and put up a list."
The twist is that VOD, unlike early trials, now has serious competition from other services, including PVR/DVR (a kind of VOD, in its own fashion) and so-called "over the top" video services such as iTunes, YouTube and Amazon Unbox. Such services are only just getting off the ground and have plenty to prove themselves. But DBS/DTH operators will have to work that dynamic - along with all the others - into any plans to compete in the race for value-add.