01 June 2006

As everyone knows, the big competition is upon us. Many teams from many nations are looking for a significant win. Some are more favoured than others. Each of them has special tactics for the battle ahead, and the activity needed to score big time is tremendous.

Of course, you would be forgiven if you thought I was talking about the World Cup. But football is a lot easier to predict than the big competition to win in the scramble for IPTV subscribers. The stakes are about as high as they come. The telcos charging in find themselves exposed to increasing competition from everybody - from the biggest internet players to cable and satellite as well as broadcasters. The feel of the pitch seems to be changing by the minute. Consumers are no longer willing to sit and take what is offered. The two-way nature of the internet is changing viewers into users and rocking traditional TV business models left, right and centre.

This year is seen as the one when IPTV should emerge from teething problems and shake off poor delivery quality and the problematic scale issues that have forced delays for the likes of BT Vision and Swisscom.

But as the telcos roll out their IPTV services, the cable companies are upping the speed of their nets, often for the same price as the previous slower connections. In the US the speed battle is getting intense: telco Verizon Communications is spending nearly US$20bn (€16bn) to upgrade its network with fibre to offer speeds of up to 100Mbps to accommodate TV, games and other services.

As the speeds go up, the price of broadband keeps falling. In the UK, Carphone Warehouse recently announced "free" broadband for life (with a mobile telephone contract, of course), which followed Orange's similar deal for the broadband service formerly known as Wanadoo. In the UK, France Telecom-owned Orange is going to compete head-on with BT's hybrid digital-terrestrial TV and IPTV broadband video-on-demand service as well as the NTL Telewest-delivered "quadruple-play" service of mobile, fixed-line, TV and broadband and the broadband TV and telephony service expected from UK satellite broadcaster BSkyB later this year.

Meanwhile, the content available to IPTV and broadband keeps growing. The BBC is putting live World Cup games on its website, available to broadband users in the UK. All of the games the BBC has rights to will be available in this way (with the same commentary as on the TV) while four-minute clips from all 64 matches will be available on-demand. The big US broadcast networks ABC, CBS and NBC, not to mention MTV, ESPN and numerous other cable channels, are also on the pitch, launching their own broadband channels and licensing content to other broadband and IPTV providers. The number one US TV show, CBS's CSI, is now being offered on broadband, while NBC has plans to stream the first hour of its morning news show The Today Show online. For the broadcasters it's all about finding audiences. As advertising continues to shift toward the internet, this is where they need to be.

The increasing attraction of broadband has boosted expectations about the growth of IPTV. From a total of just 2.7m IPTV subs registered worldwide at the end of 2005, Informa predicts that this figure will jump to 26m by December 2010. In just five years the business of on-demand TV delivery could reach nearly US$11bn, says Informa.

The difficulty with predictions is that so much is happening so quickly. Not only is BSkyB in the UK looking at broadband, but another News Corp-controlled satellite player, Star TV in Hong Kong, recently signed a deal with PCCW to explore IPTV opportunities in Asia, clearly with an eye on the biggest market of them all, China. Today PCCW runs Now TV with more than 550,000 users, or 25% of the homes in Hong Kong.

n the wake of buying the online community site MySpace.com, News Corp is rumoured to be looking to link up with a company like Yahoo! But the search engine players are also doing their own TV thing. Yahoo! is re-launching a beefed-up Yahoo Video that allows users to upload their own content and share it, while Google Video is also adding features to attract usage. Ebay's plans to incorporate Skype VOIP capabilities into its online auction services seems only a small step away from adding video content.

And if the biggest internet players aren't powerful reason enough to take IPTV and broadband TV in general seriously, then consider that Microsoft announced earlier this year that it would add US$2m more in its next fiscal year to improve its search and web-based products, on top of its already heavy involvement in IPTV delivery for telcos like SBC and BT, among others. Now if that's not a sign of a big competition then nothing is.