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IPTV/VoD: solving the home wiring problem

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The fundamental problem for ISPs is how to connect an IP set-top box to a broadband router so that it can receive relayed video and make requests across the network. Apparently easy at first glance as each IP set-top box comes with Ethernet as standard, but much more difficult when you consider that half of your residential customers have USB modems (which aren’t appropriate for triple play services), and the other half keep their gateway box in either the study or hall. That’s fine for wirelessly networking PCs, but doesn’t cut the mustard when it comes to supplying video as you need Ethernet. The next era of the broadband home needs to be able to connect to a reliable and high-bandwidth broadband network in every room of the house, toilet included.

The most popular setups for the 70 per cent of homes that now have digital TV in the UK have, firstly, Sky Digital as the primary TV platform seconded with analogue in other rooms, secondly they have multiple Freeview set-top boxes. Sky offers a heavily priced 'multi-room' product that can be used to copy and/or relay the main RF signal across the house to additional set-top boxes, and broadband-based TV needs this feature as standard if it is to compete with what’s on the market already. Subscribers need to be able to watch different channels in different rooms and to be able to view the same channel or video that’s being tuned into in more than one room.

Portability and so-called 'place-shifting' has proved itself to be extremely compelling amongst early-adopters. Having your favourite TV programme or music video follow you around the house (or even around the world) is relatively easy, and infinitely flexible. The only real configuration issue that a home network has in most circumstances is whether it has native support for multicast protocols (PIM, IGMP etc).

All this technical amphetamine is great, but in a world where prices are rising above inflation, salaries aren’t rising to meet expenditure and personal debt is at an unprecedented level, there is a greater economic concern overshadowing the IPTV market. If we carry on as we are, most people aren’t going to be able to fit in their own living rooms for all the electronic devices we have sold them. Why should they buy a new IPTV service?

We will reach a point where consumers will pause and ask themselves exactly whether our whizzbang amazing new IPTV plaything is good enough value to justify subscribing to it, or purchasing things from it. They paid up to £1000 for each PC they own, £500 per TV, £100 per DVD player, £100 for a router, and now we’re asking them to pay yet another £150 for a IP set-top box. If wiring is a problem, we’ll need them to pay £150 on top of that for PLC adaptors. We have to ask ourselves what is practical for most of our customers.

Sky’s incredible sleight of hand under Tony Ball's leadership of 'giving away' CPE was the genius that built their subscription base in the UK. Some budget-fiddling through cunning amortisation has allowed them to soak up most of the high street, just as Freeview has done through not having a subscription to fork out for every month in perpetuity. P2P networks are spiralling in growth because they offer free movies and music. IPTV needs a killer commercial angle.

ISPs are bleeding from everywhere when it comes to their margins and most can’t see a way to justify swallowing the additional cost of an IP set-top box as they are already on shaky ground. Even the leasing model used by the likes of MaLigne.TV in France is difficult to implement here because of the cash flow implications. Being a set-top box manufacturer right now is hard, but being an ISP is much harder.

Back in the early days of DSL, operators came up with the great idea of self-install broadband packages – 'wires-only' products that needed no engineers to be called out for installation, and offered the freedom for customers to choose their own equipment setup. It’s worked well so far, but momentum’s been so fast that we’ve neglected to see that we’re about to run out of road as we approach a very large cliff ahead.

The curse of every analyst and planner of IPTV services is the lack of standardisation of home CPE – it's a hell that's every bit as painful as it looks. The range of router/gateway manufacturers is enormous as the industry has deepened with the general uptake of broadband. If you want to see an executive rip his shirt and howl at the moon in frustration, just bring the subject up over coffee.

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