Will consumers buy into the global broadband future‾

02 Oct 2006

The recent Broadband World Forum conference in Vancouver, Canada highlighted the extensive expectations vendors and carriers now have about consumers' desires to pay for new high-bandwidth video services. Carriers (and in some cases, governments) around the world are busy building next-generation, fiber networks that in a few years, we are promised, will be delivering all sorts of high-definition, on-demandvideo applications and services.

But the question is: Are consumers all over the world really going to pay for what basically seems like video overkill‾

In separate, unrelated presentations, the CTOs of Microsoft and Scientific-Atlanta each presented a future vision at the conference that wound up sounding oddly similar, Bob McIntyre, the CTO of Scientific Atlanta, which is now part of Cisco, spoke about the impending transformation of television viewing. IPTV, he predicts, will upend the current viewing model by allowing access to an unlimited number of channels from throughout the world, as well as enabling more HDTV, video-on-demand and time-shifted video viewing. All of these applications will gobble up existing bandwidth and increase potential revenue for savvy service providers. He sees an insatiable consumer demand for broadband.

Peter Barrett, CTO of Microsoft's IPTV Group, was equally sanguine. He believes IPTV will do for video what MP3 players did for audio: it will put the consumer in complete control of unlimited amount of content that can be personalized and watched at will. Barrett foresees carriers providing "crisply targeted" advertising opportunities to their customer base that will help pay for those expensive fiber rollouts. Carriers will become the new middlemen between content providers and video consumers.

This seems to be the IPTV vision that many carriers and vendors are eagerly embracing. But will it actually become reality, or simply end up over-hyped‾Problem is, IPTV technology is still in the prototype stage, especially in North America. No one knows whether it is going to work as promised, but there isn't much room for error because television viewers are now used to a simple, flawless, quality, dependable television experience. Can a fiber network improve or even match that experience‾ AT&T believes it can; rival Verizon has some doubts, which is why the company is avoiding for now a pure IPTV model for its Fios fiber network rollout.

Equally important is whether consumers will really pay for this stupendous selection of services. Television viewing is a fairly passive experience. That will change dramatically when and if IPTV takes hold. You can post you own channel and invite friends and family to view it. (Adios, YouTube), You can subscribe to channels from Albania, China or Chile. You can cater your video viewing to special interests, and save it and watch whenever you want.

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