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IPTV Future Should See Both Managed and Open Interactive Platforms

3/08/2010 01:39:27 PM Eastern

San Francisco - While compelling new solutions for bringing TV
programming to the living room via the Internet appear to be a looming threat
to the businesses of managed service providers, including cable, telco and
satellite TV operators, few members of a multi-industry panel on the future of
interactive TV systems seemed too worried about any looming disruptions to the
existing delivery systems.

The discussion was part of the "TV of Tomorrow Show" presented
here by the interactive TV business publication ITVT, and brought together
representatives from a wide cross section of technology developers in the interactive
TV industry.

Panelists representing platforms, solutions and services from the
managed services community, now developing Enhanced TV Binary Interchange
Format (EBIF), and those from the so-called Over The Top (OTT) IPTV community
that is bringing new Internet delivered services and widgets to CE devices
squared off to assess the longevity of the existing system of TV delivery.

Most panelists seemed to express the feeling that new interactive
TV systems and services will bring new enhancements and business opportunities
to both areas, and won't necessarily displace the service operator that exist
today, although many consumers are less than satisfied with the status quo of
the business models they have been forced to accept.

Bob Perry, Panasonic senior marketing VP, drew the biggest
applause of the afternoon when he summarized the situation:

"There are over 100 million households yearning to be free -
that's a little bit facetious," Perry, whose company is now marketing Viera
Cast-enabled TVs, began. "Cable, in terms of their capacity and what they
deliver, is a little bit underrated. However, I'm not that sure in a popularity
contest who would win more - would it be a Wall Street banker or a cable
executive. Because if you asked the American people what they are getting and
what do they like, you can imagine what the results would be. Specifically, we
don't deliver to the American consumer everything they would like to have in
the way they would like to have it. Everybody realizes that. So, the basis for
this argument is, "'Will, in fact, some business models evolve fast enough,
whether it is over the top (OTT) both arms or whatever that will disrupt the
existing structure of the marketplace and allow consumers to get what they
want, and will their votes directly impact what's available?' It certainly
happened in the music business. So now everybody is wondering what is going to
happen next. Will a la carte really happen and will the consumer gain control
and have the purchasing power?

"For us in the consumer electronics business, we build devices
that let the consumers get this amazing content that we understand has to be
paid for and is expensive," Perry continued. "But if you ask the average
consumer who gets to vote with their dollars, today the business model they
have to pay for is a business model they don't desire. They actually are
compelled or forced into these packages and into this business model that they
don't care for.

"Ultimately, if that's the only way the business model will
survive - it will not survive. So for all of us, whether we vote on either side
of this issue, we have to figure out what the consumer wants and what they are
willing to pay for. And there is a lot of opportunity."

Responding for the managed services community, Arthur Orduna,
chief technical officer of Canoe Ventures, which is a company founded by the
nation's largest cable operators to make cable's advanced advertising solutions
easier to buy, use and measure, said: "I think what Bob said is right on, but I
don't understand why that would be a argument against having managed platforms
and services. In fact, I think that is one of the biggest endorsements for
having a managed platform, managed service open standards and a way for
providing a new set of tools to the creatives in the industry.

"Why the hell are we doing interactivity in the first place? It's
not because we like to pass bits across a wire. It's because at the end of the
day there is this form of entertainment called television, and we would like to
be able to give folks on the creative end new colors for their pallet for of
creativity ... I feel for people wanting to develop EBIF applications for Tru2way
trying to find a means to sell it, and I think that is what we are trying to
do.

"Call it the new generation of cable. We don't have all of the
right forms right now. That is absolutely correct, we don't have all of the
business models in place yet, that's very true, we are starting to do that, but
don't we have to have the infrastructure in place first? First, let's make sure
we have a platform there. Let's make sure we have a national footprint and then
we've got a market and can turn around and say, ‘How do we innovate this?' "

"There really hasn't been a compelling business model for
interactive TV, except for games and maybe gambling. We've got to change that.
If everything you do with the TV is just about somehow making it easier to find
linear programming or new sources of linear programming, it won't work. You
have to start thinking of this as another screen you can do other kinds of
interesting things with that happens to be in your living room that can talk to
your phone and can talk to your PC," said Shari Barnett, applications marketing
director for Microsoft Mediaroom.

Perry said the emergence of OTT services will ultimately force
the cable and satellite TV industries to adopt new business models and to speed
up innovation in their own interactive systems, "but it is very unlikely that
we are going to have consumers coming to us saying, "'I don't want cable, I
don't want satellite.' "

Edgar Villalpando, marketing senior VP for ActiveVideo Networks,
which is a leader in the development of cloud-based interactive services that
use a network-centric approach for expanding programming, navigation and
advertising, said his company will help both environments succeed. He added
that, ultimately, much of the horsepower being installed in CE devices,
set-tops and TVs will move out of the home and into the cloud so that
manufacturers no longer have to make risky hardware investments in innovating
their products and features and consumers have less risk of purchasing products
that will become outdated in a few years.

Villalpando said that as technologies advance, it will not be a
complicated proposition for most consumers.

Finding content on the Internet using OTT systems "will not be a
complicated proposition for the millennials or Gen-X and Gen-Yers" and CE
manufactures are now developing solutions that are plug and play.