One of the hottest topics at this year’s Consumer Electronics Show was IPTV. The reason it may work this time around is the increasing availability of Internet broadband in more than 100 million households worldwide.

One of the hottest topics at this year’s Consumer Electronics Show was IPTV (Internet Protocol TV or television-over-the-Internet); the National Assoc. of Television Program Executives (NATPE) show similarly had a whole day dedicated to it. A survey by IBM showed that 40% of TV broadcasters felt “seriously threatened” by IPTV. And hardly a day goes by without a major studio or TV broadcaster announcing a new vice president of digital media, IPTV, new media, or something similar — MTV even has a new “cdo” (chief digital officer) in its Mahogany Row. Why all the excitement? Hasn’t this all been tried before, with dismal consequences, in the late 1990s, with dot-com startups such as DEN (Digital Entertainment Network) that later imploded?

Why the Buzz?
The buzz about IPTV appears to stem mainly from three sources: a) independent producers of content who hope they can finally get distribution for their films and TV shows; b) mainline studios and broadcasters who hope they can re-purpose existing content (including “old classics” that are gathering dust on the shelf) for new media and milk them for additional revenue — a general feeding frenzy started with the release of Apple’s iPod and the success of TV shows sold over the iStore; and, c) non-traditional distribution companies such as telephone companies (telcos), search engines and online content compilers that hope to gain revenues by getting into show biz — in some cases, by stealing viewers from traditional content distributors such as cable and satellite broadcast media.

A major reason that IPTV may work this time around is the increasing availability of Internet broadband, in over 100 million households worldwide, which offers a much richer stream than the low-bandwidth dial-up connections that were available in 1999. Whereas many American households still have low-quality broadband (around 300-500 kbps), the 20 or even 100 mbps broadband rates now commonly available in Japan and South Korea are pointing the way to the future.

Modern IPTV can be watched on the big screen in the living room, using a small decoder box as translator between the incoming broadband line and the television monitor.

Whereas the video-over-the-Internet of the 1990s was meant to be watched on desktop PCs, modern IPTV can be watched on the big screen in the living room, using a small decoder box as translator between the incoming broadband line and the television monitor. With increasing broadband speeds and improved compression, it is even possible to send high definition television to homes via telephone lines.

The market for IPTV is predicted to rise very quickly — from the modest levels of 2004 to over $44 billion worldwide in 2009, according to a new report by Infonetics Research. This comes as good news for traditional telephone companies, which are being squeezed on the one hand by cellular phone providers, and on the other hand by cable companies and others providing VoIP (Voice-over-IP, the telephone equivalent of IPTV) that can bypass the long distance toll charges that have been bread and butter for the telcos. IPTV offers a much needed new source of revenue, which the telcos hope to bundle with Internet lines and VoIP into a “triple play” — data, phone and television all based on Internet protocol, and all offered as a bundle by your friendly local telephone company.

What is IPTV?
Internet Protocol Television describes a system whereby digital video is delivered to viewers using the Internet protocol over a broadband connection (via either wireline or wireless).

Delivering content over Internet protocol has several advantages. One is interactivity — IPTV can be two-way, allowing the viewer to interact with the content to achieve iTV (interactive TV) features such as commenting on the show, choosing winning contestants, or buying merchandise worn by the actors. Another is convergence — using Internet protocol for many different types of content (including voice/telephone, data and video) allows it all to be delivered using the same “digital language,” so to speak, over one basic channel, which tends to be much more efficient than using the old analog means still commonly used for media such as radio or telephone. A third is availability — using the Internet, content could be made available to worldwide audiences, without the limitations to distribution posed by sending video content over the limited number of channels available on conventional TV networks, cable or satellite.