p10-12,14,16 IPTV@IBC08 VOD v3 23/7/08 14:44 Page 10
Cover story > On-demand business models Cable & Satellite Europe
On-demand is the business
The success of on-demand services could make an IPTV service. But choosing the right
business model is vital for operators.
Nagravision’s
NagraGuide has been Video
-on-demand services form the backbone little experience, they also need to develop the required
of most IPTV deployments. Far from infrastructure and networks that are robust enough to
developed to guide being revenue-generators they have generally been devel- handle large amounts of data in order to deliver a quality
users through oped as a means of differentiating the service from rival service that is at least comparable to that offered by their
on-demand and DVR platform operators. Video technology specialist Digital cable and satellite counterparts.
content. Rapids’ (IBC Stand 7.G41) director of product manage-
ment Brian Stephenson points out that VOD will contin-
ue to drive the IPTV proposition. “In some markets, tel- Different approaches
cos have led their IPTV marketing with VOD from the
beginning as a way to differentiate their services from Most IPTV services have started out with some kind of
each other and from traditional broadcasters. VOD is a business model that saw subscribers pay for VOD titles,
significant part of the telcos’ roadmap and will be for the whether a la carte or on a subscription basis, because as
future. It carries as much importance as linear delivery.” well as seeing IPTV as churn-reducer, in an ideal world
The majority of rival cable operators already offer VOD telcos earn money from it in its own right.
services, however, some of them having done so for years, The first battle, though, is to attract subscribers and
building up impressive libraries and subscriber numbers some feel that this desire to attract eyeballs will see busi-
in the process. The challenge for IPTV operators is to ness models for VOD following the same route as in the
make the most of the one-to-one connection they have US, which is generally to offer it for free. US cable opera-
with their customers. In theory, they can offer a range of tor Comcast, for example, gives much of its VOD away for
interactive services, including network PVR, targeted free, while HBO On-Demand offers VOD services as an
advertising and sophisticated user interfaces. Yet the road add-on to its TV or movie subscription packages. This
to success is littered with complexities: as well as acquir- helps to retain customers and margins by keeping cus-
ing content, an area of the business in which telcos have tomers happy with their overall packages.
searchable archive at www.informamedia.com
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