Is IPTV a good business?
Recently a fellow launched this question in a blog: “Is IPTV good business for telco operators?”
The answer to this question is clear:
As in every business, you must always do a SWOT matrix, the most elementary and useful strategy tool. The results of a good analysis will show us the real opportunities (if any), and in this case, help us to decide whether or not, to focus on IPTV.
Although the market data are the same for every company, the evaluation of them will depend on the previous situation of each company. What is an opportunity for one, can be a threaten for other.
Rafael has explained very well the fundamentals and sense of IPTV vs OTT, and we can extract some conclusions out of them. Although not necessarily everybody the same.
It is clear that just as in every mature business, and the one in which we are involved is, (think that we are talking about entertainment -TV- no matter how it is delivered), the strategic alternatives tend to be the same.
By one side, vertical integration. Many traditional Telcos, as Rafael pointed have even merged from bottom to top in the content area (also in others, i.e. infrastructures and ISP). The most significant are majors and telcos, and also majors as programmers of their own channels.
By another point, horizontal integration. Probably also via mergers. Too many competitors is not possible.
Considering IPTV vs OTT it doesn´t necessarily mean that they are exclusive. They are only different ways of delivering a product. And the question is: does a telco need contents to define its product or does a programmer need a distribution channel? Not every case is the same. What if it only depends on which one has more money? Or… what will decide the investment funds?
Anyway, probably the main aspects that a company must evaluate at present (given that everybody has a mobile, a laptop/computer and a TVset -mostly smartTV), are: clients base/fidelity/ 3 or 4play, capacity of the network, agreements with programmers and own contents. And ARPU, of course.
But there is one subject that almost nobody considers but could be the key: The neutrality of the net. What if ISP (that is Telcos) can select/discriminate the contents delivered by Internet?