Over the Top TV : the Business Model for Social TV

The Business Model of IPTV is actually the integration of TV Business Model, IP Business Model and WEB media entertainment model, merged with the conception of manageable and operable telecommunication. In short, the Business Model of IPTV results from the process of conflict and convergence among the four mature but different Business Models. The Business Model of TV evolves with the emergence of DTV, iTV, VOD, VCD and DVD industry. Each of them is different from the other with more complexity and vagueness. The technology of VoIP and Internet is subversive for traditional telecommunication model. When the packet switching is destabilizing the Business Model of the traditional PSTN, it brings about a lot of new types of Business Models (for example, the 77 types of Business Model for Internet). WEB media entertainment is also called as the "4th-Dimension Operation", which introduces the traditional media substance consumption mode to a virtual world with digital environment, as the Newtonian mechanics to Einstein theory of relativity. There are many changes in the field of operation management with a lot of concepts beyond the traditional operable and manageable realm. In the 4D space, you can find many things like digital "earth", "space-time", "asset", "emotion" or "desire" which are endowed with human value. Such values can be equivalently traded with the value in the 3D world, to build a unique commuting bridge between the two operation spaces, known as the "consumption value". The telecommunication mode contains duality. On one hand, it operates as a traditional network providing network capability such as bandwidth, MOU, ports, lines and etc. And on the other hand, it should have the ability of post-NGN service provision, the network service delivery capability like service production, service management and service execution. Both have the characteristics of manageability and operability. This is the core competency of telecommunication. The internet industries that have made profit on mobility have proved this point. Moreover, telecommunication does not expect to be a "pipeline" which only provides network carrying capability, but want to gradually transform into a service capability provider. The Business Model of IPTV develops into a brand new Profit Model on the basis of the non-operation TV mode and the anarchical internet model, by merging with the communication-level manageable and operable model and exploring the new mode for digital entertainment/media. Many operators' superficial knowledge about operation rules and their habitual understanding of their Profit Model result in the egotism remark on themselves. In regard to a carrier, IPTV may change its revenue index but could not easily change its Business Model because of its lack of objective understanding and neutral standpoint in convergence. Many issues related with convergence arise from resource control instead of basic laws. If it is difficult to change the internal and external environment, it will not be easy to change the Business Model. IPTV is also characterized in its value chain operation. No one in the chain can solely control the whole profit chain regardless to the time of "network-dominant" or "content-dominant" or "entertainment-dominant". The distribution to the entire value chain must be provided through a manageable, operable and deliverable service system. This is the core competency of IPTV. Without the conception of operation and service, no value can be effectively delivered to the clients. Therefore, the core of IPTV operation is to build a communication-class service operation system, fairly distributed and merged with all the related types of Operation Models with fast deliverability. The value chain model shown illustrates the overall relationship and important opportunity of IPTV. The difference in the value chain will be reflected by the difference in operation, investment, management and profit of each operator. The success of IPTV does not mean to put the above-mentioned four modes together - "building blocks". .... ASK ME FOR FURTHER EXPLANATION ---------------------------------------------------------------------- IPTV : the Operation Model IPTV is not TV- as TV does not have such a value chain or Operation Model. IPTV takes only the consumption experience of TV. The so-called IPTV Operation Model will mainly focus on the essential difference between IP Operation Model and TV Operation Model. It will also focus on the conflict among the mix of operations. This kind of contradiction is objective in terms of the two traditional operation systems. This new mode is challenging that needs to be explored. From the system perspective, IPTV does not fit in with the broadcast & TV operators themselves, because the operation and the HFC resource which they are familiar with are not suitable to be used to develop interactive TV business. Furthermore, the operation of broadcast & TV does not have the so-called operation supporting system in telecommunication operation. In addition, there is some misunderstanding about IPTV. Since 2M plus bandwidth is enough to transmit TV-level programs, it is natural to provide network TV by providing wider bandwidth and more ARPU. The motivation of IPTV is because of the "comparative abundant bandwidth". The main objective of broadband operators is to find a new Business Model for broadband operation, while the traditional TV operators expect to provide more flexible inactive functions than broadcasting and to extend the scope of media though WEB. Relatively in the light of telecommunication, the "operation" of IP or TV, hardly has the "operation concept" in - built. Telecommunication predominates itself by providing reliable and manageable services whereas the traditional Internet does need any operator. Traditional TV operates is a Flat Rate. This is way beyond the telecom operation. The concept of "IPTV" is born congenitally deficient as all the three types of traditional operation method are not proper for IPTV operation, either respectively or together. Usually, the consumer development procedure of IPTV starts from TV transferring, i.e., transferring the traditional TV services or TV-like services into the environment of IP broadband to appeal to the market by the concept of TV popularity. Due to the restriction in bandwidth, IPTV was never a "TV" before. So the next step is to add interactive services form iTV mode. IPTV should eventually aim to create an interactive visual entertainment mode. IPTV seeks to create an interactive visual entertainment mode by including telecom capabilities with services such as teleconference, finally evolving into an integrated media and entertainment operation. Based on the four business sub-models for IPTV, there are movie model, internet multimedia portal model, digital entertainment center model, and NGO model for Operation Model. These models may merge somewhere but disharmonize elsewhere depending on the development vision and the plan of operators. The management and provision of stream media service is quite different from that of narrow band and common band service. The variance among solutions and the sequence of solutions of the following key technologies will lead to different modes of operation: multi-cast, DRM, IP billing/dynamic billing, service provision/delivery, service filtering, service portfolio/cross, service-on-demand, content management, service management, service QoS/security guarantee, service protection, service authentication/identification, CRM and so on- all major and influential elements of new Operation Model. IPTV operation is a kind of operation that may carry off the palm in content. In the field of service operation, the following issues have to be solved from any BM point of view: the relationship between digital media service and other operational service; unified operation CRM (the same customer segment) and unified billing. The first issue basically sets the tone of IPTV operation; the latter two issues are the core of digital media service operation. With respect to the access of IPTV or the "channel" by which telecom is consumed should naturally be broadband. The higher the traffic, the more you may feel the role of telecom as a channel. How to satisfy those individualized requirements in the digital media market? The "CRM" with customer consumption behavior as the core and the corresponding billing system will be the master key of IPTV operation. Certainly, to operate IPTV needs to solve the issues about business environment and value chain: ASON (Automatic Switching Optical Network) is used from the core layer to the "edge" router of network. Even VoIP cannot guarantee its QoS. The rate of ADSL may sometimes be only dozens of kbps or a maximum of 1M. The quality of image is substantially lower than that of TV/DTV. It has taken VoIP about 8 years to get into commercial application. Accordingly, it should take IPTV at least 3-5 years or longer to reach the commercial phase. The rate of IP is booming but is not high enough to carry the stream media distribution. The investment in IPTV network varies from that of TV network. They have different Business Models. The investment in IPTV value chain is a long way off in terms of TCO! Especially as the content management and service platform are not yet consistent with the projected income. The cost for telecom companies to enter digital media entertainment is pretty high – and is not as simple a calculation as CAPEX of media network. If the following issues were not solved, there will always be obstacles in IPTV operation which may influence tremendously both the IPTV Operation Model and the Profit Model. Namely, the content sources, quantity & quality, cost of each piece (TV episode/movie), number of concurrent usage, network cost, operation right, joint management, network support (network investment scale and benefit), digital IPR management, industry chain, platform support, content and resource creation, user development, terminal and so on. -------------------------------------------------------------- IPTV : the Profit Model The factors of Profit Model are tradeoffs between supply and demand (the supply should match the demand on both quality and quantity. The supply should be continuous.), justified charge (pricing, billing, charging, distribution) and effective delivery (cutover, management, implementation). On close observing them you may find IPTV encountering many barriers in respect to the above factors. The basic principle of IPTV Profit Model is to satisfy the customer's real requirements instead of "roaming around" in the world of digital media, to accurately segment the users by consumption behavior, to deliver the "product" catering to the segmentation, and to design the consumption and payment package in line with the principle of segmentation value maximization so as to maximize and validate the overall long term interest. On account of the complexity of IPTV Business Model and the irregularity of consumption, what the users require for digital media is in accord with the principle of "non-predictable". In that the consumption of digital media is on the basis of experience economy, the consumption behavior of individuals is various. The interest will constantly change according to the consumption market. Factitious and simple grouping or subjective and groundless conclusion will be doomed to failure. The issue of consistency between requirement and product will be solved, when there is a system that can objectively, accurately, and effectively match millions of segmentations to millions of digital media products. This system can satisfy the target customers by fetching their requested value timely and accurately in a sea of media products. news -------------------------------------------------------------------- THE JOOST PHENOMENON Joost "juiced" is a system for distributing recorded TV shows and other forms of video over the Web using peer-to-peer TV technology, created by Niklas Zennström and Janus Friis (founders of Skype and Kazaa). The teams are currently in negotiations with FOX networks. It has signed up with Warner Music, Indianapolis Motor Speedway Productions (Indianapolis 500, IndyCar Series) and production company Endemol for the beta. In February 2007, Viacom entered into a deal with the company to distribute content from its media properties, including MTV Networks, BET and film --------------------------------------------------------------------- consider P2PTV The term P2PTV refers to peer-to-peer (P2P) software applications designed to redistribute video streams in real time on a P2P network; the distributed video streams are typically TV channels from all over the world but may also come from other sources. The draw to these applications is significant because they have the potential to make any TV channel globally available. --------------------------------------------------------------------- Network neutrality Network neutrality (equivalently net neutrality, Internet neutrality or simply NN) is a principle that is applied to residential broadband networks, and potentially to all networks. A neutral broadband network is one that is free of restrictions on the kinds of equipment that may be attached, on the modes of communication allowed, which does not restrict content, sites or platforms, and where communication is not unreasonably degraded by other communication streams. Law in the European Union The European Union is going to take active action to legislate network neutrality by seeing the potential damage caused the non-neutral broadband. The European Commission, within the proposals to amend the European regulatory framework for the electronic communications networks and services published on 13 November 2007, considers that prioritisation, or in other words product differentiation, "is generally considered to be beneficial for the market so long as users have choice to access the transmission capabilities and the services they want" and "consequently, the current EU rules allow operators to offer different services to different customers groups, but not allow those who are in a dominant position to discriminate in an anti-competitive manner between customers in similar circumstances."[29] Furthermore, the European Commission thinks that the current European legal framework cannot effectively prevent network operators from degrading their customers. Therefore, it is proposed to empower the European Commission to impose a minimum quality of services in order to tackle this situation.[30] In addition, an obligation of transparency is also proposed to limit network operators' ability to set up restrictions on end-users' choice of lawful content and applications. The European Commission's proposal is being reviewed by the European Parliament at First Reading. In the summer of 2008, the lead committees in the European Parliament achieved their final draft reports. On 24th September 2008 the European Parliament held a plenary vote on the draft reports from those committees. At the next step the European Council will vote for its common position on the European Commission's legislative proposals on 27th November 2008. After that the negotiation between the European Parliament and the European Council will be made under the cooperation procedure. The adoption of those proposal is supposed to take place before the end of 2009. The first major debate on Net Neutrality in the UK was held at Westminster on the 20 March 2006, sponsored by AT&T. It was attended by the Government and Opposition trade secretaries, telecommunications regulators, industry figures and other experts in the field. Google, a noted supporter of net neutrality, declined an invitation to the debate, and then called it "biased".[33]. The conclusion was that Net Neutrality laws in the UK would be "extreme... unattractive and impractical" and that it was "an answer to problems we don't have, using a philosophy we don't share" ------------------------------------------------------------- Author : Vassilios Moulakakis M.Sc. New Media Consultant