Cisco invested $ 1.6 billions in a 100 Gigabit router to update the core of Internet as he believes that soon the consumer market will need 15 TB per user per month.  Most of these 15 TB are used for video application.  What is the role of IPTV in this game and what kind of opportunity it offers to the channel?

Disclaimer:  Most of the content of this post is based on my experience with NWS; this Sytem Integrator Company belongs to the Valadis Group (Group for which I work for).

Definition of IPTV.
IPTV  is Internet Protocol content (in the form of packets) provided by network operators (and others) over closed networks. So, the two traditional components of  IPTV are:
- network operators (Content providers);
- a Closed Network (optimized networking infrastructure to assure high Quality Of Service).
Traditionally, the Content Providers dealt mainly with  the National TV distributors (satellite, cable, Digital terrestrial) and the Closed Network was provided by the National Telco Operator. It’s clear that in this context there is no space for the channel.
What happened to make interesting the IPTV for the channel?
The positive (for the channel) evolution of the IPTV business is due to 3 factors:
1) The Content Providers lost the total control of the TV content (Multicasting);
2) Widget Based Middleware;
3) The Emerging of FTTH infrastructure.

1)  The channel  doesn’t  depend  any more 100% by the Content Providers for the TV Multicasting.
 These happened for three reasons: 

a)   A new relationship between IPTV providers and Distributors of TV Channels.
In the past, TV Cable and TV satellite providers saw the IPTV provider just as a competitor.  The IPTV Provider was obliged to deal direct with Content Providers to obtain the TV channels  and he had to deal that  from a difficult base as he could bring only “a few thousands potential subscribers” compared to the hundred of thousands potential subscribers of Satellite and Cable TV operators
Now, TV cable and TV satellite providers look at IPTV provider as a partner that can implement a new, powerful source of business: interactive advertising.
In this new model, IPTV providers are positioned within the advertising value chain, based on the provider’s ability to enhance a brand’s relationship with consumers.

b)  Integration of OTT content.
OTT (Over the Top or Internet Video) has been tradionally described as a competitor of IPTV.
In the recent practice, IPTV operators are instead integrating this unicast source with Content Provider’s multicasting.
Fig 1. shows how OTT is already in the “thoughts” of IPTV Telco operators but you can now find also IPTV providers that open speack about Over-the-Top IPTV

fig.1 - internet video and IPTV

c)  Hybrid IPTV. 
This model exploit the already existing Digital TV offer and combined it  with the new Web interactive services and Internet Video (fig 2. ).

fig 2. - hybrid iptv

 This model offers several advantages:
- the end user just need to change the STB and he has not to touch all the already existing Digital TV infrastructure and his subscriction fee.
- The IPTV provider doesn’t need necessary  to bargain any contract with the Content Providers (or with brokers) . Of course, there is also space to find different form of  win-win collaborations between them.
- This model allows to implement IPTV also on broadband lines with limited speed (for exemple ADSL).
- Hybrid IPTV is basically the IPTV solution for Hospitality.
- Hybrid IPTV is an ideal infrastructure for Over-the-Top IPTV.

2) Widget Based Middleware.
Companies like Nordija brought on the market powerful software to implement widgets in an IPTV solution. Widgets are easy applications that any ISP can develop in order to offer personalized services to his customers and bring the immense content of the web on the TV.
You can use widgets to bring on the TV home domotica meaures, to have in real time the statistics of the two teams playing a world cup match on the TV, to show the best restaurants close to your hotel (and to book your table and even choose your plates, why not). You can combine the interactivity of the widget with the traditional Video on Demand (VOD) technology of IPTV to create Anything on Demand (xOD) services for your customers.
The only limit is your fantasy and your capacity to sell them to your customers. Here some widgets exemples implemented in NWS.

3) The Emerging of FTTH infrastructure.
An FTTH infrastructure allows IPTV to exploit its full capability to bring high quality video (like HDTV e 3D TV ).  Moreover, as explained in the post fiber to the home: opportunties for the channel?    the current business model of FTTH is not direct controlled by the Telco operators.

Show me the money.
The money for the channel  lies in the interactive services that the new IPTV allows to offer and of course in the behavior data registered in the Set up Box (to be used in the interactive advertising in the respect of national privacy legislation). These data are the same ones used to guarantees the Quality of Experience of the end users.
What about the costs?  First of all, Companies like NWS allows to the channel to pay a fee for user. The fee range is comprised between 2 and 5 euro (content and STB excluded) and avoid to the IPTV operator (heavy) fix investments. The biggest cost is for sure the investment in inital set up (about 3 months).  Fortunately, the Nordija Middleware allows using group policy; this allows IPTV providers to associate themselves, using only one intial set up and differentiate their services using groups.  In a similar way, an IPTV provider can use one set up system to implement IPTV in small hotels, hospitals, etc.
Does all this fit in your business plan?
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