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mmC Group's point of view on IPTV and if there's a business case in Middle East. Additional info can be found at www.group-mmc.com or consultantvalueadded.com
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mmC GROUP Strategy Consultants – IPTV Strategy in ME_may2011 Page 1
Defining a wining and successful IPTV strategy in the Middle East
Case Study mmC Group Strategy Consultants May 2011
For further informa@on please contact: Carlos Valdecantos (+34 696 940 2210; cva@group-‐mmc.com)
mmC GROUP Strategy Consultants – IPTV Strategy in ME_may2011 Page 2
Strategic reflecDons on IPTV
Is there a business case for IPTV in the Middle East?
IPTV players across the value chain and key technical challenges
Agenda
mmC GROUP Strategy Consultants – IPTV Strategy in ME_may2011 Page 3
Mobile Applica@on Stores
Loca@on-‐Based Services
Mobile Gaming
IPTV has been one of the telecommunica4on hypes with higher trough of revenue expecta4ons and business s4mula4on...
ExpectaDons
Technology Trigger
Time Peak of Inflated Expec-‐ta@ons
Trough of Disillusionment
Slope of Enlightenment Plateau of Pro-‐ duc@vity
Video Analy@cs
Context Delivery Architecture
LTE-‐A Smart Antennas
Bluetooth Low-‐Energy Wireless Technology
cdma2000 1xEV-‐DO Rev. B
Rich Communica@on Suite
VoIP Wireless WAN 4G Standard
Mobile Social Networks
Cloud Compu@ng NFC Payment
Mobile Adver@sing Long Term Evolu@on
WiMAX 802.16e-‐2005 IMS
Mobile Instant Messaging
Mobile Presence
IPTV Mobile IPTV Broadcas@ng
Mobile Search Switched Digital Video
FTTH Mobile E-‐mail Services
Electronic Bill Presentment and Payment for Telecom Providers
Interac@ve TV
Integra@on as a Service Loca@on-‐Aware Technology
Loca@on-‐Aware Applica@ons Mobile TV Streaming
MPLS Infrastructure
Network Sharing Femtocells Near-‐field Communica@on Unified Communica@on Next-‐Genera@on Service Delivery Pladorm Service-‐Oriented Architecture in OSS/BSS
New Genera@on Opera@ons Systems and Sofware Advanced Telecommunica@ons Compu@ng Architecture
Addressable TV Adver@sing Technologies
Revenue innova@ons
Hype cycle telecommunicaDon 2009-‐2010
Gartner’s assumpDons • Revenues of next
years will be generated from exis@ng products
• However, in the core business there are very limited revenue innova@ons and therefore, growth outside core business is also required
• Technical innova@ons drive bandwidth and can help to op@mize the cost base
INTRODUCTION > CORE BELIEVES ON ANY IPTV STRATEGY
Source: Gartner
mmC GROUP Strategy Consultants – IPTV Strategy in ME_may2011 Page 4
...however, IPTV is s4ll a revenue innovator promise as very few countries reach the minimum level of penetra4on to defend the case.
• Many incumbent operators have launched IPTV or VOD services over the last five years, a @meframe that provides enough data points for analysis
• In the European market, only Belgacom and KPN have built household penetra@on above 10% within three or four years. All others have household penetra@on of less than 10%-‐5% in several instances.
• No European or North American incumbent is showing any signs yet of reaching the 31% penetraDon level that PCCW has in Hong Kong for its IPTV offering (Now TV).
% of households
IPTV AdopDon per % of household penetraDon
20
Share networks (passive and active) with competitors!� to generate significant Capex and Opex savings.
Exploit group synergies and outsourcing. !� Activities across IT, billing, service platforms, network monitoring, design, and optimization are all candidates for consolidation. Groups with operations in multiple markets might consider consolidation at a group level.
Embrace the lowest-cost technologies available. !� Deploying technologies in the network that minimize transmission, switching, and energy costs (e.g. alternative energy sources) can provide fast payback and ROI.
Manage customer value tightly,!� ensuring that costs to acquire and serve a customer are tightly aligned with the revenue that a specific customer generates.
There is still significant growth left in emerging markets, although the number of seats at the table is limited. For new entrants, M&A may represent the best way to gain exposure. However, generating value from the growth that remains is increasingly tough and requires strict adherence to a very low-cost operating model.
New service growth opportunities: IPTVTwo new telecom services that have attracted significant investment over the past year are IPTV and mobile data services, including smartphone applications. We look at IPTV first.
Many incumbent operators have launched IPTV or Video on Demand (VOD) services over the last five years, a timeframe that provides enough data points for analysis. Of the operators we examine (see Figure 2.5), only Belgacom and KPN have built household penetration above 10% within three or four years. For KPN, this was due in large part to its DTT pay-TV service, Digitenne. All others have household penetration of less than 10%, and less than 5% in several instances. So far, there is little sign of an inflection point in the penetration trend lines. No European or North American incumbent is showing any signs yet of reaching the 31% penetration level that PCCW has in Hong Kong for its IPTV offering, Now TV.
Conclusion
Figure 2.5 Percentage of households subscribing to telecom IPTV services since launch
Source: Informa, Oliver Wyman analysis.Note: Last data point on all series is 2Q09.
% ofhouseholds
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22
Quarters since service launch
BT KPN (inc. DTT) Telecom Italia
FT Belgacom AT&T
Verizon DT Telia
0%
5%
10%
15%
Source: Informa; Note: Last data point on all series is H22009
Quarters since service launch
Comments
INTRODUCTION > SLOW ADOPTION OF IPTV OFFERINGS IN EU & US
So far, there is lible sign of an inflecDon point in the penetraDon trend lines
mmC GROUP Strategy Consultants – IPTV Strategy in ME_may2011 Page 5
There are few out-‐performers in the telecom space where IPTV’s take-‐up reflected a substan4al contributor to growth.
• Portugal Telecom is outperforming peers despite a late launch
• Belgacom reached 50% penetra@on of its broadband base and has been a consistent pioneer in IPTV broadband
• TeliaSonera and France telecom have reached significant scale
• Swisscom is experiencing a good momentum from a slow start
• So far Telefonica, Telecom Italia, DT, BT and KPN have seen limited success (for KPN we use IPTV only ie exclude Digitenne)
IPTV take up as a % of broadband base
Source: Company data, Morgan Stanley Research
Comments
INTRODUCTION > IPTV TAKE-‐UP > EUROPEAN BENCHMARK BACK-‐UP SLIDE
mmC GROUP Strategy Consultants – IPTV Strategy in ME_may2011 Page 6
Different trends are responsible for the slow adop4on, but special remark should be done on OTT services as it means a mayor shiN in the TV business.
• Most of TV markets are already mature, ofen with well-‐established DTT, DTH, and cable TV offerings
• It’s a challenge for telecom operators to break into these markets and win market share
• Gaining market share is no guarantee of high ARPU. With some excep@ons, IPTV ARPUs are generally lower than the average pay-‐TV ARPUs
Slow uptake of IPTV and reduced ARPUs
Trend RaDonale / descripDon Impact on business
INTRODUCTION > IPTV TRENDS
• One reason IPTV ARPU is low is because few operators offer as much premium content as compe@ng pay-‐TV players
• Operators looking to improve ARPU may face a vicious circle—they lack the scale to jus@fy the high cost of premium content, but without it they lack the compelling content proposi@on needed to build scale
• In addi@on, in most of the emerging markets, local content is significantly more important than interna@onal content
Premium content is a vicious cycle
• The “cuqng the cord” effect unveils as the most fundamental change that threatens operators’ efforts to generate value from IPTV & VOD services
• A growing propor@on of video consump@on is moving to ‘over-‐the-‐ top’ services that are delivered across the open internet rather than over operators’ dedicated IPTV or VOD pladorms
Increasing “Cufng the cord” effect
1
2
3
mmC GROUP Strategy Consultants – IPTV Strategy in ME_may2011 Page 7
Operators have the tools to prepare themselves against the IPTV and VoD threats, but what about a new player entering in the IPTV arena? INTRODUCTION > OPERATOR’S CHALLENGES AND TENTATIVE COUNTERMEASURES
Major challenges for telecom operators
DescripDon and comments
• As consumers gravitate to online video, operators bear increasing network costs without a commensurate increase in revenue, due to the prevalence of flat-‐rate broadband packages
• In some markets, operators use traffic shaping and bandwidth throwling at peak @mes to help protect customer experience and perhaps encourage heavy users to move to higher-‐priced unlimited services.
• Increasing network costs
A
• Redundant investment in the TV space
B • If demand for 'over-‐the-‐top' services con@nues to accelerate, it threatens to render redundant at least some of the investment that operators have made in IPTV pladorms.
• Open delivery further fragments the environment in which operators must fight for pay-‐TV market share
Possible Countermeasures
Pricing rebalancing – charge more to final
user
Charge content providers & aggregators
Double bet and parDcipate in OTT video directly
mmC GROUP Strategy Consultants – IPTV Strategy in ME_may2011 Page 8
INTRODUCTION > CORE BELIEVES ON ANY IPTV STRATEGY
We therefore see four main ques4ons that should be addressed by telecom operator wishing to launch TV opera4ons.
1. Is there a business case for IPTV in the Middle East?
Which should be the value proposi@on towards the market?
Which technical solu@on fits best with each strategy?
How should a telecom operator approach to IPTV implementa@on?
2. 3. 4.
MAKE OR BREAK
TACTICAL
OPERATIONAL
OPERATIONAL
mmC GROUP Strategy Consultants – IPTV Strategy in ME_may2011 Page 9
Strategic reflec@ons on IPTV
Is there a business case for IPTV in the Middle East?
IPTV players across the value chain and key technical challenges
Agenda
mmC GROUP Strategy Consultants – IPTV Strategy in ME_may2011 Page 10
IPTV and VoD revenues es4ma4ons in Middle-‐East and North Africa appear to be appealing, with over 500m in 2014.
Source: Telco TV forecasts 2009-‐14, Ovum
SAC/SRC (Euros) MENA Broadband VAS Revenues forecast
60.0 118.0
213.0
325.0
467.0
12.0 19.0
32.0
49.0
70.0
0.0
200.0
400.0
600.0
800.0
1,000.0
1,200.0
1,400.0
2010
2011
2012
2013
2014
Music
VoD
Gaming
IPTV
Online Advertising
VAS revenues (USD m)
IS THERE A BIZ CASE FOR IPTV?
MENA Broadband penetraDon of households in 2010
Source: ITU; World economic forum 2010
0.000
0.100
0.200
0.300
0.400
0.500
0.600
0.700
0.800
0.900
Qat
ar
UA
E
EU 1
5
Bah
rain
Om
an
Jord
an
%
84%
75% 68%
48%
22%
13%
mmC GROUP Strategy Consultants – IPTV Strategy in ME_may2011 Page 11
IS THERE A BIZ CASE FOR IPTV? > LESSONS LEARNT FROM OTHER IPTV CASES
However, there are some doubts around the IPTV case (that apply to most of the ME markets) that should be considered when defining the IPTV case...
• Satellite TV compeDDon reduces the target market
1 • IPTV ARPUs may be lower than pay-‐TV ARPUs
2 • Fiber investments move ROI further away the 3rd year
3 • Premium content is key, but damn expensive
4
• A growing propor@on of video consump@on is moving to ‘over-‐the-‐ top’ services that are delivered across the open internet rather than over operators’ dedicated IPTV or VOD (video-‐on-‐demand) pladorms
• If this trend con@nues growing, the revenue’s share for telcos will be reduced
• OTT players are also fragmenDng the market
5
• Few operators offer as much premium content as compe@ng pay-‐TV players
• Operators looking to improve ARPU may face a vicious circle—they lack the scale to jus@fy the high cost of premium content, but without it they lack the compelling content proposi@on needed to build scale
• Significant investment is required to deliver reliable IPTV services
• A reliable connec@vity around the home (DSL /FTTH) is s@ll a major issue (over 4MBs)
• Delivering HD content across telco’s networks and the ability to scale up for carrying HD VoD is another issue
• Gaining market share is no guarantee of high ARPU
• With some excep@ons, IPTV ARPUs are generally lower than the average pay-‐TV ARPUs
• Triple-‐play bundling strategies required to obtain revenue increase benefit per RGU
• Most of the ME countries hold mature TV markets, with well-‐established DTH and cable TV offerings. It is a challenge to break current status-‐quo and win market share
• Illegal satellite connec@ons account for at least 20% of the total
• Lack of interoperability for other devices that could poten@ally deliver IPTV reduces case poten@al
Note: OTT (Over the Top)
mmC GROUP Strategy Consultants – IPTV Strategy in ME_may2011 Page 12
…as most of them have a direct impact on margins and break-‐even points of profitability. IS THERE A BIZ CASE FOR IPTV? > MARGIN ANALYSIS
USD
25
50
75
6
14
25
30
0
10
20
30
40
50
60
70
80
2P Bundle IPTV pack = Subtotal Backbone access
DSL access Content Gross Margin
IPTV’s monthly margin analysis
TRIPLE PLA
Y CA
SE
• Considering the SAC split… • Modem cost: 30 $ • STB cost: 200 $ • Installa@on: 460 $ • …
• …the gross margin (30$) over install cost (690$) gets a breakeven point at 23 MONTHS
• On top: • Assume STB update
on a 5 year interval at most
• Assume at least a 12% churn
• Assume compe@@ve response affec@ng top-‐line revenue
Source: mmC Analysis based on real case in Europe;
ILLUSTRATIVE – REAL CASE
1 2 5 3 4 RISKS
mmC GROUP Strategy Consultants – IPTV Strategy in ME_may2011 Page 13
• Limited content catalogue and QoS
• Most affordable op@on; Internet accessible
• Cost ineffec@ve – break even point afer years
• Serious compe@tor to DTH technologies
• Strict minimum speed requirements
• Improves the economics of IPTV (reducing cost)
Telecom operators should assess the three different IPTV models to reduce investment profitability risks whilst providing an appealing TV experience to the final customer. IS THERE A BIZ CASE FOR IPTV? > IPTV OPTIONS
Internet TV (OTT) HYBRID DTH / IPTV PURE IPTV
• Combina@on of both Linear Broadcast and Video on Demand Approach
• Connec@vity via Operator’s Closed Broadband Network Standard
• Pay-‐TV distribu@on model
• Revenue model is a combina@on of Subscrip@on based, Pay-‐per-‐view and Adver@sing
• Broadcasters, content providers, adver@sers or disintermediators have a revenue sharing arrangement with the Telco
Mod
el DescripDo
n
• Hybrid model combines broadcas@ng of linear TV through DTT / DVB-‐S and Video on Demand services through DSL
• Bandwidth requirements for DSL, (aka network costs) can be reduced since linear TV won’t require broadband bandwidth capacity
• Revenue model as a combina@on of Subscrip@on based and Pay-‐per-‐view
• A pure Video On Demand Approach: Primarily portal based as extensions to broadcaster’s linear digital channels
• Connec@vity via Internet only –Leveraging exis@ng content from digital channels funded through a combina@on of revenue sources including Adver@sing, Pay-‐per-‐view, Subscrip@on based and Download to own
• User generated and syndicated content from OTTs players’ portals and service delivery pladorms
Risks &
Be
nefits
mmC GROUP Strategy Consultants – IPTV Strategy in ME_may2011 Page 14
Depending on the scenario selected, the investments required will be different. The current tendency is to define 4ght cost control mechanisms to avoid CapEx burn... IS THERE A BIZ CASE FOR IPTV? > THE IPTV CAPEX ISSUE
332.59 130.18
82.8 53.45
65.98 0.18
0 100 200 300 400
Accumulated CAPEX CPEs Sales Channels BroadcasDng Network
TV Plasorm SGA
USD (in Million)
Sample Hybrid IPTV CAPEX case study 1)
115.8
11.2 2.4 0.7
New HW Replenished HW Installa@on teams HH installa@on
79.00
3.80
Sales Channels Comm & Adv
49.37
3.44 0.41 0.23
HW Installa@on services Monitoring tools Network monitoring
41.75
13.46
10.11 0.66
Core pladorm Advanced features OSS/BSS integra@on TV Plat Opera@ons
0.18
SGA 10 years Accum
ulated
Cap
Ex Breakdo
wn
Source: (1) mmC Analysis based on real case in Africa; Notes: CPEs: Customer Premises Equipments;
AssumpUons: A) 3 Offers up to 40 channels; B) Countrywide penetraUon of overall PayTV in 10 years: 23%; C) Operator’s IPTV M.S in 10 years: 33%
ILLUSTRATIVE
CapEx Annual
average of 31 M USD
mmC GROUP Strategy Consultants – IPTV Strategy in ME_may2011 Page 15
…op4mizing OpEx spending (accep4ng that most of the opera4ng cost might come from the content side and this will be hard to op4mize)… IS THERE A BIZ CASE FOR IPTV? > THE IPTV CAPEX ISSUE
172.8
63.83
62.8 23.33
26.48 6.36
0
50
100
150
200
Accumulated OPEX Content TV Plasorm Network CPEs SGA
USD (in Million)
Sample Hybrid IPTV OPEX case study 1)
32.55 31.28
Variable costs Fixed costs
36.42
7.54
6.91
11.93
Core pladorm Advanced features OSS/BSS integra@on TV Plat Opera@ons
20.07
2.57 0.47 0.23
HW Broadcast net Maintenance Sites Network monitoring
15.00 11.21
STB Licensing STB Repair
10 years Accum
ulated
OpE
x Breakd
own
Source: (1) mmC Analysis based on real case in Africa; Notes: CPEs: Customer Premises Equipments;
ILLUSTRATIVE
6.36
SGA
OpEx Annual
average of 16,3 M USD
AssumpUons: A) 3 Offers up to 40 channels; B) Countrywide penetraUon of overall PayTV in 10 years: 23%; C) Operator’s IPTV M.S in 10 years: 33%
mmC GROUP Strategy Consultants – IPTV Strategy in ME_may2011 Page 16
..while defining a segmented and pricing-‐innova4ve approach to gain market share, increase ARPU levels an reduce abandonment. IS THERE A BIZ CASE FOR IPTV? > IPTV SEGMENTATION & PRICING
IPTV SegmentaDon outputs IPTV Pricing outputs
ILLUSTRATIVE OUTPUTS
mmC GROUP Strategy Consultants – IPTV Strategy in ME_may2011 Page 17
A special remark should be put on OTT strategy. Telcos have the opportunity to be reference players while extending the tradi4onal IPTV model towards innova4on. IS THERE A BIZ CASE FOR IPTV? > OVER THE TOP
• Can we leverage on our premium rights (esp. sport) to drive up triple play through OTT?
• Should we rely on UGC and play the adver@sing bawle?
• How do we benefit of an OTT models to avoid being bypassed in delivering content that clogs up our broadband network?
Over The Top model
Linear Non-‐Linear
Content
Broadcaster Broadcaster
Final Customer
MulD-‐channel plasorm
Own channel
Portal aggrega-‐
tor
Service aggrega-‐
tor
Video search
• How we op@mize the fiber investment required to support the IPTV service?, is there an alterna@ve op@on?
• Can we partner with specialized providers to drive innova@ve video services? Is there an easy way to mone@ze them?
How can an OTT model can benefit current operator’s IPTV strategy?
• What’s the video consump@on demand of my base that can be delivered trough OTT services?
Notes: UGC: User Generated Content
mmC GROUP Strategy Consultants – IPTV Strategy in ME_may2011 Page 18
In our opinion, there’s a business case for IPTV in the Middle East. Operators should successfully aaend the different challenges that separate success from failure… IS THERE A BIZ CASE FOR IPTV? > IPTV CHALLENGES & KEY DRIVERS
BUSINESS MODEL
• Managing IPTV as a new service and the absence of business experiences at scale
• Addressing the right size of the required investments (e.g.. Content and technology)
• Using the IPTV as an ARPU and CLTV (life @me value) enhancer
CONTENT & MEDIA MGT
• Seqng up a dedicated team for content selec@on and program schedule management
• Developing exper@se in content nego@a@on, cross-‐selling, promo@onal offer mgt and defining the content refreshment policies
• Ensuring quality assurance and compliance process for content providers
SERVICE CONTROL
• Suppor@ng new services such as network PVR, VOD Distribu@on scheme
• Limi@ng access to certain services in case of network and service infrastructure overload (e.g.. Video servers)
• QoS Management and service control architecture to handle load peaks and service mixes
E2E SERVICE ASSURANCE
• Strong need for architecture’s real @me troubleshoo@ng and monitoring (end to end)
• Proac@ve status analysis, automated trouble management and recovery process if required
• Proac@ve management of new areas such as video quality management and condi@onal access management
CUSTOMER CARE & BILLING
• Integra@ng the IP TV billing processes with the exis@ng billing processes
• Building awrac@ve commercial offer by bundling TV services with Voice and Data
• Design new billing processes and build interfaces with external payment GWs
• Customer self modify subscrip@on
PRODUCT TECHNOLOGY CHOICES
• Use of off-‐the -‐self products to be integrated in Telco’s infrastructure or define architecture and standards and ask suppliers to adapt their solu@ons to this scenario
• Cost effec@ve STBs with high video quality, GUI and interac@ve services
• Ability to offer high scalable @tle search for on-‐demand movies and content
mmC GROUP Strategy Consultants – IPTV Strategy in ME_may2011 Page 19
…and learning from others’ success experiences and lessons learnt. IS THERE A BIZ CASE FOR IPTV? > SUCCESS FACTORS IN IPTV
1
The Right Content
2
PosiDve User Experience
3
High Quality of Service
4
Tight operaDonal and cost control
5
InteracDvity
Success Factors in an
IPTV Strategy
• Provide improved ICC for immediate viewing
• Facilitate an easy STB installa@on • Provide easy payments for pay-‐per-‐view services
• Automa@c system requirement checks and sofware updates
• Require @ght cost control as compe@@on for IP TV customers is fierce between Telecom service providers, broadcasters and Media companies
• Extendable content environment
• Rely on it as a major differen@ator compared to tradi@onal broadcast TV where there is no back channel
• Accelerate convergence on three applica@on screens (PC, Mobile and TV)
• Opportunity for personalized Ad selec@on
• Look for the right content rights to make a differen@a@on
• Look for the right commercial trade-‐offs between content and services
• Providing specialism and local content customized to targeted groups
• Releasing content in a compe@@ve @me windows
• Quality of Service in IP networks to deliver constant quality in transmission
• Trade off MPEG4 compression with video defini@on
• Video Call Admission control Notes: ICC: Instant Channel Change
mmC GROUP Strategy Consultants – IPTV Strategy in ME_may2011 Page 20
Strategic reflec@ons on IPTV
Is there a business case for IPTV in the Middle East?
IPTV players across the value chain and key technical challenges
Agenda
mmC GROUP Strategy Consultants – IPTV Strategy in ME_may2011 Page 21
With the aim of understanding who is who in the IPTV compe44ve landscape, we should first separate all players & roles involved across the value chain…
Equipment and Technology
Network & Service Provisioning
Video consumpDon
Equipment & Hardware systems
Sovware systems and service plasorms
Customer AggregaDon & OTT Players
Content Provider
• Content recep@on
• Signal condi@oning
• Video Headend • Decoder
+Streamer • VoD/nVoD
Servers • Switches • DSLAM • IP-‐STB • xDSL Modem
• IPTV middleware • Digital rights
management (DRM) wrapping
• Content Related sw (encoding and packaging)
• Billing • Service
monitoring and network probes
• CAS,IP-‐Scrambler • QoS & Monitoring • Managed services
• Mul@cast / Unicast over DSL and Fiber technology networks
• Content sourcing • Procures HW &
SW • Branding &
packaging • Installa@on • Service
provisioning • Billing • Customer
Support
• Content rights • Content
pordolio • Digitaliza@on
and content produc@on
• Catalogue management
• Content Aggrega@on
• Content distribu@on network
• Content sourcing • Technology
deployment • Uses Telcos
network for service provisioning
• Branding & packaging
• Installa@on
• Buys Set top Box • Buys IPTV
package • Pulls content and
adver@sement
IPTV COMPETITIVE LANDSCAPE IN ME > KEY PLAYERS ACROSS THE VALUE CHAIN
Subscribes
Subscribes Subcontracts
Revenue share Players
Roles
Simplified IPTV Value Chain
Content management & delivery
Direct deliver Deliver
Network distribuDon & BroadcasDng
mmC GROUP Strategy Consultants – IPTV Strategy in ME_may2011 Page 22
IPTV STBs IPTV access Encoders and CAS
IPTV COMPETITIVE LANDSCAPE IN ME > KEY BRANDS PER ROLE
Players
Samples
Detailed players split per role
IPTV Streamer & Middleware
VoD providers
IPTV Service plasorms OTT Content provider
NOT EXHAUSTIVE
Note: Within the last 5 years: Tandberg TV was bought by Ericsson; Tandberg STB and Barco were bought by Cisco; Myrio was bought by NSN; Securemedia, Broadbus were bought by Motorola STB: Set-‐top Box; CAS: CondiUonal Access Systems; VoD: Video-‐on-‐Demand
Exis4ng mul4ple op4ons in the region, it’s key to iden4fy which of these players fit best with the operator’s technical and business requirements.
mmC GROUP Strategy Consultants – IPTV Strategy in ME_may2011 Page 23
(Bahrain) (2)
While there’s no one single top-‐notch configura4on, most of the ME telecom operators have opted for a big player combina4on as a way to get implementa4on secured.
Access
Video Headend
VoD
Set Top Box
SDP and DRM
Middleware
Source: (1) 2010 MRG, Inc. Note: (2) Launched in 2011
Top world vendors per category 1)
IPTV COMPETITIVE LANDSCAPE IN ME > TOP PLAYERS & MENA IPTV OPERATORS
Operators & IPTV Partners selecDon
eLife TV (UAE) (2)
Mozaic TV (Qatar)
EAMS (Egyp@an Advanced
Mul@media Systems) (2)
MT TV(Morocco)
Du TV+ (UAE)
• Most telcos are op@ng for hybrid IPTV/DTH technical solu@ons
• The advantages/disadvantages of any of these op@ons really boils down to two significant factors, the RFP and vendor selec@on process and the System Integrator (SI) alloca@on
• Big names deliver end-‐to-‐end solu@ons as “turn-‐key” contractors, engaging specialist-‐SIs and providing all managed services required
Lessons learnt
NOT EXHAUSTIVE
mmC GROUP Strategy Consultants – IPTV Strategy in ME_may2011 Page 24
Which Service Model?
IPTV COMPETITIVE LANDSCAPE IN ME > IPTV TECH STRATEGY
There are 3 key technical implica4ons that directly affect the IPTV technical features and requirements required to deploy an outstanding video experience.
Major technical requirement
DescripDon and comments
• A video file is huge in comparison with almost any other type of informa@on carried over a network and consumes a significant bandwidth of it.
• Video is bandwidth hungry
• Video is highly intolerant of varia@ons in delay and packet loss, and is corrupted by small varia@ons of them, destroying the viewing experience.
• Streaming video requires RT network performance
• If any por@on of a video play goes badly, complaints and demands for refunds will result. Any failure in a video connec@on is almost certain to create nega@ve customer reac@on
• Video is a conDnuous “always on” experience
Dependence
Which Delivery Model?
Which Management and Support Model?
Note: RT = Real Time; BB = Broadband
Technical implicaDon
A
B
C
…depending on the nature of the content, the format of the video, and the appliance(s) under which the video will be delivered
…depending on the characteris@cs of the customer access network and the metro connec@on network
…depending on the way in which video will be ordered, supported and billed
mmC GROUP Strategy Consultants – IPTV Strategy in ME_may2011 Page 25
IPTV COMPETITIVE LANDSCAPE IN ME > IPTV SERVICE OFFERING ILLUSTRATIVE
At a customer perspec4ve, the video-‐user-‐experience should be a set of different func4onal services towards personalized TV. Commercial requirements will determine the IPTV service footprint desired.
Desired Feature
Most valuable feature
Willingness to pay for
Churn rate AVERAGE LEVEL (combining 4 factors)
1 Prime@me Any@me
2 3 4 5 6 7 8 9 10
Prime@me Any@me Prime@me Any@me Prime@me Any@me
Catch-‐up / Start over prime@me
Catch-‐up / Start over prime@me
Catch-‐up / Start over prime@me
Caller ID on TV Caller ID on TV Caller ID on TV
Caller ID on TV
Catch-‐up / Start over prime@me
Mul@-‐room DVR Mul@-‐room DVR Mul@-‐room DVR Mul@-‐room DVR
External Hard Drive for DVR
Channel Video Thumbnails
Channel Video Thumbnails
Remote Monitoring using TV
Single-‐player games Remote Monitoring using TV
Remote Monitoring using TV
Channel Video Thumbnails
DVR Place-‐Shifing News & Informa@on Widgets
News & Informa@on Widgets DVR Place-‐Shifing
Digital Media Place-‐Shifing Single-‐player games DVR Place-‐Shifing Digital Media Place-‐
Shifing
Channel Video Thumbnails DVR Place-‐Shifing Single-‐player games News & Informa@on
Widgets
PC-‐to-‐STB Interac@on External Hard Drive for DVR
External Hard Drive for DVR Single-‐player games
Prime@me Any@me
Catch-‐up / Start over prime@me
Mul@-‐room DVR
Caller ID on TV
Channel Video Thumbnails
PC-‐to-‐STB interac@on
Single-‐player games
News & Informa@on Widgets
DVR Place-‐Shifing
External Hard Drive for DVR
Note: TV 2.0: The Consumer PerspecUve. Park Associates Research (Percentage of U.S. adult home broadband users raUng feature as 5-‐7, n=2,720, +2%)
mmC GROUP Strategy Consultants – IPTV Strategy in ME_may2011 Page 26
IPTV COMPETITIVE LANDSCAPE IN ME > SERVICE MODEL REQUIREMENTS NOT EXHAUSTIVE
At a technical perspec4ve, IPTV has explicit requirements to ensure a successful video experience…
TV & Video Broadcast
IPTV service models
VoD
“Store for Play” (Video download)
Network-‐side requirements (bit rate BW)
Content-‐side requirements
Service plasorm-‐side requirements
• SD TV (704x480) (4:3 & 16:9) • SD TV (640x480) (4:3) • HD TV (1280x720) (16:9) • HD TV (1920x1080) (16:9) • 3D TV (1280x1080) (16:9) • MPEG format: 30 -‐ 60 FPS
• Minimum network guarantee • MPEG-‐2: 3.5 Mbps SDTV; 16-‐19 Mbps HDTV
• MPEG-‐4: 1.5 -‐2 Mbps SDTV; 6-‐8 Mbps HDTV
• Caching support • Video distribu@on to
customer gateways • Network Load Balancing • VoD buffering support • Non-‐stop delivery support
• Storage support: • HD 720p = 4 Gb per 1h file
• HD 1080p = 8 Gb per 1h file
• PVR support
• Minimum network guarantee • MPEG-‐2: 3.5 Mbps SDTV; 16-‐19 Mbps HDTV
• MPEG-‐4: 1.5 -‐2 Mbps SDTV; 6-‐8 Mbps HDTV
• SD Resolu@on: 480p • HD resolu@on: 720p • Full HD resolu@on: 1080p • 3D resolu@on: 1080p • H.264, AVC or VC-‐1
compression codecs
• Streaming and Buffering support: • addi@onal 1-‐2 Mbps SDTV
• addi@onal 3-‐5 Mbps HDTV)
• Network capacity management support
• Network conges@on avoidance
• E2E QoS management
• SD Resolu@on: 480p • HD resolu@on: 720p • Full HD resolu@on: 1080p • 3D resolu@on: 1080p • H.264, AVC or VC-‐1
compression codecs
Note: Size and Bandwidth figures depend on different variables (including bit rate, compression codec, etc.). EsUmaUons for illustraUve purposes only.
mmC GROUP Strategy Consultants – IPTV Strategy in ME_may2011 Page 27
IPTV COMPETITIVE LANDSCAPE IN ME > IPTV SERVICE DELIVERY MODELS
…understanding that there are significant differences, as well as some common points between the various technology service delivery op4ons…
mmC GROUP Strategy Consultants – IPTV Strategy in ME_may2011 Page 28
IPTV COMPETITIVE LANDSCAPE IN ME > MANAGEMENT & SUPPORT MODEL ILLUSTRATIVE
…and that transi4oning IPTV into a mass-‐market service will undoubtedly require a refined and robust solu4on. In other words, there may be no second chance.
Requirements Management & Support Challenges
RaDonale
• "Always On" User ExpectaDons, Flawless Quality
• Capacity Planning, Cost Control, Right-‐Sizing
• CongesDon Avoidance, Service Assurance
1
2
3
• Non-‐stop service delivery / opera@on
• End-‐to-‐end service and policy control
• Differen@ated and determinis@c QoS
• Uninterrupted viewing 24x7
• Effec@ve SLA enforcement
• Video has stringent SLA needs
• Op@mized video content inser@on (flexibility to insert video content at centralized and decentralized loca@ons)
• Op@mized broadcast TV delivery (distributed mul@cast, IGMP snooping)
• Minimize VOD transport cost; regional content, ad inser@on; scale higher VOD concurrency
• Minimize BTV transport cost; maximize channel bouquet
• Accurate intelligence on resources
• Video quality measurement/monitoring
• BTV/mul@cast video admission control
• VOD/unicast video admission control
• Detect and prevent conten@on
• Verify perceptual QoE for users
• Limit BTV channel overbooking
• Limit VOD session overbooking
mmC GROUP Strategy Consultants – IPTV Strategy in ME_may2011 Page 29
IPTV COMPETITIVE LANDSCAPE IN ME > SIMPLIFIED IPTV SYSTEM ARCHITECTURE ILLUSTRATIVE
It’s therefore mandatory to define in detail what technical scenarios are required to succeed in the selec4on of the technology op4ons available with a long-‐term vision.
• STRATEGY DEFINITION
i • REQUIRE-‐MENTS DEFINITION
ii • TECHNICAL SOLUTION DEFINITION
iii • ARCHITEC-‐TURE DEFINITION
iv
STRATEGY DEFINED REQUIREMENTS DEFINED TECHNICAL SOLUTION DEFINED
ARCHITETURE DEFINED
• Strategic alterna@ves
• Strategic TV service models alterna@ves
• Technical scenarios defini@on
• Business case
• Business requirements
• Commercial requirements
• Technical requirements
• Opera@on requirements
• Vendor map screening
• Vendors evalua@on against requirements
• Vendors selec@on • Economic impact
• Logical architecture design
• Physical architecture design
• O&M processes defini@on
Middleware))
IPTV)Applica1on)server) Subscriber)database)
En1tlement)System)) Electronic)Prog)Guide)
Session)Manager)Head)End)control)
Content)delivery)plaAorm)Asset)management)
Set)top)box)
EPG)Client)
Condi1onal)Access)Client)
Broadcast)Applica1on)
VoD)Applica1on)
VoD)Decryp1on)
Video)Decoder)
CA)System)
QoE)Monitor)
Encryp1on))Resource)Manager)
VOD)Server)
VoD)Resource)manager)
Video)Pump)
VOD)Data
Linear)Content
LIVE)TV
Encoding)and)Compressing)
Scrambler)
Derives in Derives
in Derives in
mmC GROUP Strategy Consultants – IPTV Strategy in ME_may2011 Page 30
mmC Group Strategy Consultants Joaquin Turina 2, 1st floor 28224 Pozuelo de Alarcón, Madrid Spain Phone: +34 91 129 8100 Fax: +34 91 714 1888 Web: www.group-mmc.com Blog: www.consultantvalueadded.com