Cable is yesterday's technology

Attorney Gregg Skall of Womble Carlyle and Don Hicks of the Missouri Broadcasters Association are attending Telecom 05 in Las Vegas, a major trade show for the telecommunications industry, and filed this special report.

The picture emerging from Telecom 05 is that cable is past its prime as a dominant video delivery system. Telcos are on the horizon and with unlimited broadband capacity in an IP delivered world and this could provide a critical opportunity for broadcasters by combining their unique ability to create high interest, local content. Most speakers here agree that the content owner is in the driver's seat, and that puts broadcasters in a very good position in the new world order. Telco executives, whose forbears said they never wanted to be more than common carriers of messages for others, are talking about being very serious video programming providers.

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Speakers echoed one another in emphasizing that On-Demand video is not just about getting a list of 4 movies per month that will start when you want them. It is about a very robust slate of programming, including movies, news, weather, and local content, especially local content. The difference is that the content, the advertising and the programs are delivered when you want it, more like Google than like the old network TV model of designated time slots.

Ed Graczyk, Director, Marketing and Communications, Microsoft TV, stated it is important to understand what IPTV is not. It is not TV over the Internet, its bandwidth - - not channels - - with one service going to many devices in a highly personalized and hyper localized fashion. It is integrated with communications of many kinds. Similarly, Jim Chabin, CEO, PROMAX said we are in a race between the computer and telephone industry to come up with one platform for all purposes and all devices. Cell phones will be competing with cable and satellite for subscribers to that personalized video.

In "A market Driven Framework for Affiliation," Rick Ducey of BIA agreed with John Mansell of Kagan Research that telcos should establish relationships with broadcasters and carry their multicast channels as a way to differentiate them from cable. Stating that the day of the vertical network has come and gone, Mansell added, in today's environment "broadcasters and the networks are floundering. Nothing seems to have worked all that well." But, now there is a narrow window of opportunity that broadcasters should grab to bring programming to new telco IP delivered systems. Larry Kivett, Senior Manager, Technology, Media & Telecommunications at Deloitte, added that lots of producers are "dying" for a US market and they will take this opportunity to bring new programming to viewers.

BIA's Ducey explained that some of the new innovative features to expect from IPTV will be products like mosaic four screen simultaneous TV, and iPod TV. Two innovators he cited for explore IPTV alternatives were PBS and Capitol Broadcasting of North Carolina. Capitol is experimenting by delivering news and weather to mobile phones. He said that broadcasters can also contribute their multicast channels and additional channels that cable won't carry and can create others like video blogs, news, weather and podcast subscription programming. They have a huge inventory of less frequently accessed but still of interest programs.

In "New Opportunities for Broadcasters," IPTV system hardware and set top device providers made it clear that there is already a very significant hardware and software capability at market and in active use by telcos providing IPTV and VOD. In response to a question, most agreed that this equipment could be easily adapted for use by over-the-air broadcaster data streaming as an ancillary service of a digital broadcast channel. The devices are already being used for the delivery of programming as well as interactive advertising. SBC must agree; IPTV International Magazine reported that it has committed four billion bucks on IPTV. According to COO Randall Stephenson, "four billion on IPTV is a cheap bet!"

Skall/Hicks Observation:
It only takes a few of these sessions and a stroll through the exhibit hall before it smacks you in the face: There is a robust business already in progress supplying mature technology for IPTV and VOD. When you consider the opportunities for "Google" like TV, and the ability broadcasters have to produce local programming for an open environment that is currently relatively fee of gatekeepers and regulatory barriers, you suddenly realize that it is 1950 all over again. That is; TV broadcasters can be producing a lot of local programming, and according to these speakers, profitably. However, broadcasters must move quickly or this window may pass them by.