The New Digital Revolution

January 21, 2006

Categories: Business, Marketing, Articles

The IPTV Revolution

A New Digital Revolution has been taking place on the internet.

It’s a revolution that has been in the making for more than 5 years, and will finally come to fruition in 2006.

It’s a revolution with one single goal:

Turn the internet into a full-scale medium for High Definition TV: IPTV.

This by itself may seem like revolution enough - but that’s only part of the story.

The more aggressive companies pushing IPTV, such as SBC, are not just looking to provide high-definition TV streaming online as a single service - but instead as a wider package of “digital lifestyle” services.

This means IPTV as bundled not simply with VOIP and music services, but also with video gaming.

And as the internet is no longer the reserve for desktop PCs, that means the IPTV revolution will also go mobile - PDA’s, phones, and other mobile devices.

The introduction of IPTV to the internet heralds a New Digital Revolution.

Building the Revolution

A number of companies have spent the past few years developing platforms for serving the new IPTV markets.

Why? As Jerry Wang, joint founder of Yahoo! put it to John Battelle: “TV is the Holy Grail.”

The IPTV revolution couldn’t happen before. With dial-up as the major point of access for the internet, TV media online simply could not be supported.

As broadband penetration in the major internet markets – North America, Europe, and East Asia – has been accelerated by cheaper pricing, the first IPTV trial services are already in play in the USA, and in the UK begin in earnest this summer.

Major telecoms providers across the world have been upgrading their networks, ready to deliver the services as required.

Revolutionary ISPs

Google, Yahoo!, and Microsoft have all been especially busy in developing broad-platforms to work from, to integrate IPTV into their range of portal services.

Microsoft

Microsoft

Microsoft has a lead in software development of IPTV technology, having begun more than 5 years ago.

While it may have cost Microsoft around $20 billion to develop necessary software for IPTV so far, it remains a potentially lucrative investment.

Major US telecoms suppliers, such as Verizon, BellSouth, and SBC (who bought AT&T last year), all have agreements to use Microsoft software for the distribution of IPTV on their networks.

Yahoo!

Yahoo!

Yahoo! itself has taken a different approach, instead integrating itself into broadband services from major telecoms suppliers, such as SBC and British Telecom, and additionally has video distribution deals and search services already developed.

Google

Google

Google itself has a possibly more ambitious approach - aside from their video search services, Google also a huge amount of untapped dark-fibre network available.

Combined with their hardware surplus, this could be used to allow people to store their TV media files online - turning the company into a one-stop digital media suite in itself.

What does the IPTV revolution mean?

Of course, a revolution is nothing if it doesn’t mean anything - but any revolution will mean different things to different people.

For some, the simple act of integrating HDTV with the internet will be revolution enough.

For others, the easy availability of a new digital lifestyle in itself will be fulfilling.

More importantly, perhaps, is something far more fundamental - a major bridge that small and independent media companies can cross to reach consumers.

This applies both to advertising and creative projects.

Advertising

If you’ve been on some of the larger US media sites, you’ve probably already seen attempts to mix streaming media with banner advertising space.

With innovation comes investment from larger companies, looking to exploit this to provide the edge in advertising - especially to overcome ad-blindness, and a tendency to ignore banner advertising, by providing media rich formats.

This is something that is going to expand in use on the internet for two main reasons -

  1. Advertising budgets will make the use of digital media a higher priority
  2. The accessibility of media production at home

The first point is underpinned by increasing advertising spend on the internet.

The additional pressure this creates is that more and more advertising space will open up to digital media. Google AdWords as text-only ads? So yesterday! Tomorrow, as streaming media.

The second point especially needs underlining - for years, digital media production has been creeping into the home, with video and music editing suites starting from a few hundred pounds.

Normally this production work would stay at home. But with the IPTV revolution comes a revolution in distribution.

This is almost certain to serve an explosion in the number of companies offering video production services for online advertising.

And this will go hand in hand with the increase in distribution of digital media advertising online.

Soon it will be more than Fortune 100 companies accessing digital media for advertising - even local plumbers will have access to media production advertising for IPTV.

This needs especially emphasising for the expanding market in local search online, and how digital media advertising will eventually work with services such as Google Local.

Film production

TV and film media was once the monopoly of corporate broadcasting and production companies, but IPTV will allow normally unserviceable niches to be reached by niche media companies.

As the home production studio finds itself able to produce digital media for advertising, so it will be able to channel some of those funds towards creative projects to fund entertainment niches.

Rather than entertainment being left to Hollywood and the major broadcasters, in the next few years it will be everyone from the home studio to Yahoo! who will be able to commission, produce, and distribute their own entertainment media.

Quality issues are no longer a concern - for a start, the similar technology used for Hollywood blockbuster special effects are accessible from the bedroom. All that’s required is professional attitude and creative quality.

There is already a swelling platform of film media work online that demonstrate this closing gap - especially from science fiction fans paying tribute to their favourite series.

While the standard of acting will vary, the special effects can be indistinguishable from the original.

The most recent example of this is Star Wreck, a free film download produced by a group of amateur film fans from Finland. Ostensibly a parody of Star Trek and Babylon 5, it features special effects that equal most Hollywood productions.

Additionally, though, is that it must be remembered that IPTV will be served not simply PC’s, but every type of monitor - from huge widescreen TV’s to the tiny screens of mobile phones.

This in itself sets up different niche distribution verticals to work from - for example, lower screen quality for distribution on mobile devices will make this especially accessible for small independent media production companies.

Concluding the New Digital Revolution

Ultimately, the IPTV Revolution is the New Digital Revolution. IPTV itself is merely the flagship for a suite of digital entertainment services, whose effects will be as profound as they will be far-reaching.

As the vision of “digital lifestyle services” is realised, it will destroy the distinction between consumers and suppliers, as consumers create and distribute their own entertainment.

Through the power and accessibility of digital technology coupled with the internet as a distribution platform, today’s websites are the independent media platforms of the future.



Article submitted to digg: 2006: The Year of IPTV

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