The Telcos Could Revolutionize TV... But They Won't
Martin Geddes has written up a post about how the telcos are wasting their money on IPTV, and reminds us of our own post on the subject from last summer. In that post, we wondered why the telcos were wasting so much money trying to build …
Context & Ripple Effects
The IPTV debate has already drawn a distinction between IPTV and TV delivered over IP, while cable operators are portrayed as wary of IPTV’s competitive threat. Martin Geddes’ critique reframes telcos’ spending as a strategic misstep rather than a straightforward route to television disruption.
The same story’s pickup by Telepocalypse indicates the argument is circulating in telecom-focused commentary, but the supplied record contains no evidence of an actual shift in telco deployment plans.
First-order effects
- Telcos funding IPTV builds face direct scrutiny over whether network investment is being aimed at a television service rather than at a more open IP-based delivery model.
- Cable companies confronting IPTV competition must distinguish the immediate threat of telco video bundles from broader changes in how video may travel over broadband.
Second-order effects
- The IPTV-versus-TV-over-IP framing puts pressure on telcos’ capital allocation: proprietary television systems risk locking investment into the incumbent pay-TV model they are trying to challenge.
- Cable operators’ defensive posture toward the approach of IPTV may strengthen incentives to protect bundled video offerings rather than compete primarily on open network access.
Third-order effects
- If operators continue treating IP chiefly as a managed television-delivery mechanism, television competition may remain organized around closed bundles and network owners rather than internet-native distribution.
- The central strategic divide is whether broadband infrastructure becomes a platform for operator-controlled video services or for video services independent of the access provider.
The trend: IPTV is exposing a broader telecom choice between extending the pay-TV bundle through IP networks and enabling a more open video-distribution market.