Convergence of broadcasting and telecoms

Craig Skinner/Ovum
16 Oct 2008

Rapidly evolving convergence between the traditional sectors of telecoms and broadcasting is giving rise to converged media opportunities.

Traditional broadcasting is essentially a linear service. The broadcaster has full control over the range of content and timing that is pushed to viewers.

Converged media provides the opportunity to offer not only the standard linear broadcast service, but also non-linear on-demand content that is selected and pulled by the viewer with the option for two-way interactivity. The content provider can allow access to a large range of content from the popular mass media to far along the long tail of niche content. The interactive elements open the possibility to new types of content and services not possible with a linear broadcasting model.

The most common approaches to delivering converged media are IPTV, internet video and mobile TV. IPTV is the delivery of video services over a single operator's network allowing the dedication of bandwidth on an end-to-end basis from the video servers to the viewers to ensure high-quality viewing experiences. In contrast, internet video involves the transport across the public Internet from video servers located outside the viewer's access network. Internet video does not allow for end-to-end service management and delivery of the video stream is on a best-efforts basis.

Mobile TV consists of both linear broadcast and non-linear transmission technologies utilising both satellite and terrestrial technologies.

Convergence drivers

Fundamentally, converged media is enabled by the improving capability and falling cost of technology. Both internet and mobile access networks have been increasing in available capacity. Most countries have now begun deployment of 3G and fiber networks. The increased efficiency of video compression standards, particularly H.264, has enabled quality video content to be delivered at substantially lower data rates.

For viewers, the driver for converged media is primarily convenience through the access to both a substantially wider range of content as well as the higher level of control over when and what they watch. Mobile TV offers the advantage of ubiquity with the mobile device enabling video viewing whenever the viewer has spare time.

For telecom operators the most important driver of IPTV and mobile TV is as a means of protecting their market shares in fixed and mobile services. Telecom operators are seeking to expand into new services to increase bundling opportunities in an effort to retain and win customers and to promote the take-up of broadband services.

For broadcasters and content providers, IPTV, internet video and mobile TV provide an opportunity for a new distribution channel complementing their existing linear channels. These new converged media channels can both lower costs and provide greater flexibility. The non-linear nature allows the monetization of their entire back catalogue of content.

Broadcasters, content providers, telco operators and ISPs are all experimenting with converged media and new business models. One of the most important challenges is generating revenue in the face of viewers' demand for free content.

Traditional linear broadcasting essentially consisted of two business models. Free-to-air supported by advertising and subscription based services. Subscription services utilize some means of conditional access control to limit viewing to those who pay relying on a mix of subscription revenues and advertising revenues to fund their business model.

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