Original URL: http://www.theregister.co.uk/2006/02/23/harris_survey/

Tear up the Harris survey

Try asking the right IPTV questions

By Faultline

Posted in Networks, 23rd February 2006 12:38 GMT

Comment We don’t normally lead on surveys, but a recently released Harris Interactive survey samples the average US household and says that it shows that consumers are both ready, waiting and largely willing where IPTV is concerned.

But hold on, we’re not sure that Harris asked the right questions or bothered to define IPTV.

The survey was conducted online with 1,039 US adults in December 2005. Despite the fact that it is virtually impossible to actually get IPTV in the US, except for key trials of the Verizon FiOS and in one small part of San Antonio for the U-verse TV from AT&T, more than half (56 per cent) of all US adults said they have heard of IPTV and quite a few of them said they are interested in adopting it. But Harris has confused the entire thing with internet TV and perhaps need to engage our services as technical consultants before trying another such survey.

Here’s the definition they were working from: "Internet TV or (IPTV) is a method of distributing television content over the internet. The viewer must have a broadband connection to view content on a computer. Content may also be viewed on a standard TV if a set top box is used. IPTV allows viewers to select content on demand, time shift, and take advantage of other interactive TV options. Have you heard of this technology?"

Unfortunately Harris ruined any results it might have right there by not distinguishing it from Telco TV which is the real IPTV. The implication, if this survey could be trusted, (which it can’t) is that there will be a huge effect on the US cable industry, which is likely to be devastating, changing operator economics forever and having reverberations all over the world. But we don’t think it’s true.

The hottest plus items among interviewees for IPTV were the lower price, on demand content, more channels, more high definition programming, a bundled digital video recorder and a proper interactive program guide.

If you were a cable executive and you heard that feature set you’d laugh. Because all those features are available from cable and satellite operations, with the exception of low price. Incumbents in any business will always extract the largest amount of money from customers possible, and any newcomer has to be attractive on price. The reverse is true for cable attacking telcos on voice services, where the telcos have been charging high rates forever.

The Harris poll said that 42 per cent cited price as the main driver "since IPTV should be far less costly than cable or satellite". Well we’ve got news for the US public, of the networks that bring these services, satellite is the cheapest to reach a US wide footprint. Laying fiber or cable and upgrading connection devices such as DSLAMs is far more costly than throwing a few satellites up in the air. Oh yeah, but they didn’t mean IPTV, they meant web TV.

This survey makes a mockery of all the extra bells and whistles, such as fast channel change, picture in picture, and a mosaic interface for selecting channels, which everyone so far has hoped will be the reasons for customers making the switch to real IPTV, but which of course the US pubic is NOT actually aware of.

But even so, some interviewees said they would sign up and try it immediately if it were available and one-quarter (26 per cent) of adults said they were quite interested in adopting IPTV for use on their TVs, and 19 per cent expressing interest in adopting IPTV for use on their computers.

And in a later question Harris furthers the confusion by asking which type of company would the US public be happiest getting their IPTV from. The list of the companies chosen curiously includes some ISPs which have experimented with internet video and TV, but neither Google nor Yahoo makes the list and nor does Apple.

The answers came back that Joe Public is most comfortable with the cable operators as the prime supplier.

In fact the answers were:

AOL is involved in web TV, and Disney this week re-launched Moviebeam, and it sounds like this is a simple branding question that really asks in the interviewees mind "Who do you currently associate with TV services right now?"

Other major omissions are DirecTV and EchoStar, who are certainly going flat out to produce a hybrid system that is indistinguishable from (real) IPTV, but which uses satellite as the primary distribution mechanism.

The survey goes on to suggest that a pitiful amount of US consumers have any interest, just 4 per cent, in TV on their cell phones. But funnily enough we are prepared to bet that those services take off far faster than IPTV in the US, whichever definition you use.

Twelve percent (12 per cent) of the Harris respondents said they would sign up and try IPTV immediately if it were only available for their PC, and 57 per cent said they would wait and see how others like it. Almost one in five (18 per cent) said they would try IPTV immediately if it were available for their PC and could be sent to TVs in their house using a settop box, and 59 per cent said they would wait and see how others like it. Minorities interviewed said they are happy with their current service.

The confusion is extremely clear, since we know of no IPTV system that goes primarily to a PC. However this confusion is understandable. The US consumer is looking for a genuine breakthrough in internet TV, and has no idea that telco TV really IS delivered using the internet, just because it uses IP packets to carry it. We had an expression a while back to define "disruptive innovation" a term bandied about during the 80s and 90s in an attempt to understand what leads to breakthroughs in technology. That expression was "half as good, for a tenth of the cost".

That rule works say for Skype in VoIP services. It almost works for mobile TV (a quarter as good for about a third of the price) but not for IPTV (twice as good for about the same). Disruptive innovation sells itself. Everything else needs hard marketing dollars.

In the end only 17 per cent of the Harris survey said they would cancel their existing cable or satellite TV service and go with IPTV, so perhaps those people are either expecting internet TV to be really good (perhaps like the Akimbo service) or these are the ones who actually understand what IPTV really is.

The biggest chunk, 66 per cent, said they would keep their existing cable or satellite TV service and give IPTV a trial run, which of course won’t happen. What will actually happen is that the Telco TV will be out there in malls and supermarkets and airports and everywhere demonstrating just what it is and people will see it and want it (or not want it) and have no idea that IP is involved at all. And everyone will try web or internet TV room say Google.

For Telco TV it will be classic consumer activity where the magic ingredients are "I’ve seen it and I want it, I can afford it and I know someone that has one, and he says it’s good." This scenario takes time to build up steam and then has the ability to take on an iPod-like frenzy after a few years.

Harris should do the survey again, defining the terminology, and putting in a proviso that this is NOT about IPTV, which is another form of cable TV, and then ask away about internet delivered video. Harris is one of the biggest market research companies in the world, and should know a lot better.

Copyright © 2006, Faultline

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