[Ed Note: this article was published in 2009, when Bell FIBE was in its infancy. It is now one of the best TV systems out there. But I’m leaving the article because I stand by many of the points made about the challenges in launching large cable/telco offerings]
I’ve had Bell’s fledgling IPTV service – http://entertainment.bell.ca – for 6 months now, and believe me when I say that I’m sad to report that it’s not ready for prime-time.
Full disclosure – I was one of the first people hired on the Bell IPTV team back in 2003 and I still feel an affinity for the group, but mostly for the overall effort to bring more interactive television to my living room.
I don’t want to belabour this article with a lot of details on how the service is lacking. Nor should I, since one individual’s experience can’t be taken as indicative of the entire user base. However, my suffering exposes the fact that this is a very complex system, with enough potential points of failure to make it extremely difficult to launch successfully.
In short, I have had hardware issues (replaced STB, wifi gated to 10mbps), network issues (spent an entire month trying to figure out why my TV would pixelate and studder, until the problem mysteriously went away) and account issues (secondary STB removed from account, EPG occasionally blank etc).
I kept copious notes on each and every failure to try and help out the Bell service team. And I should say that they pulled out all the stops to resolve my issues (reason enough to be an early adopter because you get the best techs in the business coming to your aid).
But this list isn’t the reason that IPTV is in serious trouble. I believe that they will work out the kinks and eventually deliver a great service. In fact, there are several reasons IPTV won’t succeed in the near-term, but the primary one is that when your TV goes black, you have to reboot a router.
Now, if cable failed more often, people might welcome the fact that they have something they can do at their end to solve the problem. But the kinks were worked out of cable long ago, and people are used to getting nearly flawless service. Most TV users don’t even know what a router is, let alone how to reboot it. At a minimum, IPTV has to reach cable’s service level before it can be an effective challenger.
If you’re familiar with interactive television and all the possibilities, it’s easy to ignore the primary goal of delivering high-quality video. The Bell execs know this and have been working to build a solid service. Alas, with all its promise, IPTV in its current state is at best a me-too offering (because it adds VOD, where satellite has only near-VOD). And while whole-home PVR is very cool, it’s a retention, not acquisition play.
Here’s where it all comes down to product management/marketing.
Because IPTV is true, two-way TV , it DOES have the ability to differentiate from broadcast cable. The problem here is two-fold: the Bell team has to a) correctly pinpoint the thing that users will latch on to and b) market it in a way that resonates and won’t cannibalize their existing satellite business. The problem is that these are competing needs, i.e. if you nail the thing that attracts new customers, you’ll also attract satellite subscribers. Double acquisition costs make this a losing proposal.
Unfortunately Bell has got their fingers into enough stuff to make it difficult to make the right product decisions. But this is less about Bell and more about how disruptive ideas rarely come from within large enterprises. Over the next few years, broadcast TV’s inadequacy will drive more and more people to the Internet as the de facto delivery mechanism for all forms of video, because it provides ultimate control over how and when content is consumed. And the Internet is a harshly competitive, level playing field where only the truly innovative will thrive.
And then, ironically, the Bells/Rogers of the world will pour the necessary capital into their plants to match what’s going on online, and put their massive brand marketing budgets in gear to win consumers back to truly interactive TV.
Other challenges / observations:
- Satellite converts will have had the ability to record their PPV, but once on IPTV, they’ll suddenly find that they can’t record VOD on their PVR’s. You try and be the lucky marketer that has to explain studio windows to consumers (for ex, see http://en.wikipedia.org/wiki/Film_release)
- How do you market DSL and TV together? Access and programming amount to ~$150/month. Like One-Bill, it seemed like a good idea to give subscribers all the info on one bill, until they saw that they were giving the lion’s share of their monthly entertainment wallet to ONE company.
- As an Internet-aholic, the biggest reason I’m still on IPTV is that I get 21mbps downstream (when the TV’s are off) and around 7mbps up. That’s incredible and it makes my work life a lot easier. Ironically, it also leads me away from the TV, to stream the shows my PVR missed, over the Internet.