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What is IPTV?

Simply speaking, IPTV is TV delivered via IP protocol. That means using the same web technology that’s used for the Internet. Consumers experience TV in their living room via a set-top box, just like regular cable or satellite TV delivery.

However, IPTV does not actually travel over the public Internet.  It’s a closed network, sometimes called a “walled garden” since nothing else is traveling on the network except for TV. IPTV is usually delivered to the home via DSL or Fiber last mile connections. IPTV does not mean Internet video, or streaming, like YouTube.

In the U.S., cable is the number one way that consumers get their TV. Cable service providers have been delivering pay TV since the 1940’s in mostly the same way, with some technological improvements, of course. (To read a more in-depth article about how Cable TV works, see this article from HowStatuffWorks.com.) Today, cable companies, like Comcast, Time Warner Cable, or Cablevision have millions of subscribers and also provide Internet access, as well as voice services like VOIP.

These cable companies have enjoyed a near monopoly in the territories they serve in recent years, however with the introduction of IPTV, consumers are experiencing competition for pay TV and more alternatives than just their local cable company.

Today, telecom providers like AT&T, Verizon, Deutsche Telekom, France Telecom, Orange, Telefonica, and BT are launching TV services over IP and seeing lots of success. Since IPTV is being delivered by telecom companies, it is sometimes called Telco TV.

In the U.S., Verizon and AT&T launched their IPTV services a few years ago, and are they finally making in-roads with consumers. AT&T currently has France has been leading the world in overall subscribers, however, with almost 5 million spread among three large Operators.

Telecom companies around the world have been noticing that consumers are dropping their landlines for cell phones, and their revenues are shrinking. They realized years ago that they would need to find new revenues sources–and that’s where IPTV comes in. Telecom providers all over the world are turning to IPTV in order to protect their revenue stream, and get into a lucrative market.

IPTV is active in almost every country of the world, in various states of development. At the moment, many Tier 1 telecom providers have already launched IPTV services, while smaller telcos are just starting out their services. Some governments have laws that prevent telecom companies from launching pay TV services in their country, but generally speaking these laws are being changed to fully allow telecom companies to launch IPTV.

So far, the telcos are getting good traction, but it’s still very early and the competition for pay TV is very fierce. Numerous market forces, including the Internet, HDTV, social media, DVRs, the iPhone, evolving TV advertising models and consumer expectations are coming together to change the pay TV industry.

Incumbent TV providers, like cable and satellite are finally feeling the pressure from the telcos, which makes for a very interesting time to be involved in IPTV.

Next time, I’ll address another important topic: Why IPTV?

[Note: Wikipedia's entry about IPTV is OK, but not very thorough.]