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August 1, 2006
By Khali Henderson
IPTV IS HOT. ANYONE
who has ventured onto a trade show floor in the last year can attest to that. Worldwide IPTV service revenue will skyrocket to more than $44 billion in 2009, according to one estimate from Infonetics Research Inc. But what most people think of as IPTV is basically a cable TV or DBS replacement a me-too option that gives telcos a third leg on the triple-play residential stool. While thats certainly a key aspect to it, IPTVs value proposition is to deliver personalized programming.
In a June 2006 report, researchers from Washington, D.C., think tank New Millennium Research Council, say, IPTV is not simply offering traditional television programming through another device or connection. The low costs of creating content allows just about anyone to produce a television show.
Anyone could be a hospital, retailer, government or any organization with a need to communicate to an internal audience (e.g., employees or partners) or external audience (e.g., customers or prospects).
With this in mind, Prescient Worldwide, a nationwide reseller of telecommunication services, is rolling out this month an IPTV offer that will enable these entities to program and deliver live, scheduled and on-demand content over an IP network. The end-to-end offer also will be made available for sale through the companys agent channel, giving agents a rare if not exclusive opportunity to sell this hot technology.
Prescient Worldwides IPTV offer uses existing broadband Internet connections to distribute broadcast-quality video to computer screens or televisions equipped with set-top boxes. Servers placed at each physical location deliver the programming to the PCs or set-top boxes. Prescient Worldwide manages the content-delivery system and is able to remotely push new content periodically (e.g., daily, weekly or monthly) to a master server at the client location, which then updates servers in the clients other locations. Each server is capable of handling up to 45 channels of simultaneous programming.
This delivery system offers a lower cost basis compared to other broadcast methods, such as cable or satellite. Given four hours of live, client-provided content via an on-site server with a single set-top box, the client would see a hardware savings of about 41 percent over satellite, according to Prescient Worldwide. The monthly management fees would be the same but transport is significantly less. The company claims monthly data bursts using IPTV would save the client about 87 percent compared to satellite.
Programming is where things get really interesting. People have a narrow view of what IPTV can do, says Jason Whiting, director of marketing for Prescient Worldwide. Instead of TV-like general interest programs, IPTV can allow a sports retailer, for example, to broadcast an in-store TV channel featuring sports events, sports advice and gear recommendations. The channel could be interspersed with commercials about the retailers special promotions or manufacturersupplied ads. The retailer could offer a separate channel in every part of the store, targeted to different interests, like camping and fishing on one station and basketball on another. And, when the seasons change, fall sports like football can be added to the lineup.
Looking at the proposition a completely different way, a corporation could use IPTV to deliver on-demand training, programming different channels for different job holders. While the sales execs might access a briefing on the new products coming down the line, the assembly line worker can look at new safety procedures.
In truth, the possibilities for IPTV are dizzying. Think of the captive audiences in hospitals and doctorsoffices not to mention their internal staff. Its easy to imagine the kinds of programming options and the opportunity for hospitals to earn revenue from advertising by local businesses or pharmaceutical companies seeking to reach hospital staffers, medical professionals, patients and their families alike.
Commercial IPTV Applications
Source: Prescient Worldwide
Prescient Worldwide agent Lisa Sellecki, owner of RJR Communications LLC in South Glastonbury, Conn., says she has found initial interest from companies in the health care, hospitality and retail industries. Its an opportunity to get in the door with industries I havent yet, she says, noting one pending MPLS deal with a hotel might be closed because she is now able to bring a potential revenue-generator with IPTV to counter flagging long-distance commissions.
Sellecki is undaunted by selling the new product, saying its not that much different than switching from long-distance to VoIP sales. Besides, she says, agents like RJR have to look at new revenue opportunities since rates and commissions for traditional telephony products keep coming down.
Drawing upon partnership with filmmakers, Internet TV creators, broadcast production specialist and VoD providers, Prescient Worldwide assists organizations with programming options, says Whiting. Prescient Worldwide acts as a single source for content. We can provide both production and aggregation services. Offering both these services allows us to offer our clients diverse programming options. Programming can be presented to the client in any or a combination of the following: 1. Client provides the content it has created itself or with the help of a third party; 2. Prescient Worldwide creates new content for the client; 3. Prescient Worldwide procures content based on customer requirements; 4. Prescient Worldwide provides the client with recommended programming options.
We may use some of the same content for multiple clients, but we dont need to, Whiting adds. Thats the beauty of the system. Since the servers sit on site, each program stream can be customized to that location. There is no need for a single content stream that everyone shares.
Agents will be able to sell Prescient Worldwides IPTV offer in much the same way they do traditional telephony products. And, of course, the basis for the system is data connectivity, so it begins with an infrastructure evaluation and, possibly, a T1 or DSL sale and then moves to programming. Commissions are based on one of two scenarios. If the agent does the legwork (contact, evaluation, phase one planning, proposal, sale), Prescient Worldwide will work with the agent to create a buy rate for the project. The agent then can mark up that cost. In the case where the agent is making a referral, Prescient Worldwide works directly with the customer and the agent receives a percentage of the project and monthly recurring charges.
Some people will focus on it simplistically and turn it over to Prescient Worldwide; and some will seek to sell every bell and whistle, says Raymond Mason, a principal with Rebcon International in Los Angeles, Prescient Worldwides first IPTV agent. (In the interest of disclosure, Mason also is an officer with High Speed Video, one of Prescient Worldwides strategic partners in delivering the IPTV offer.) He already is selling the service and in mid- June said he was near to closing on a contract. In addition to commission on the connectivity sale, the upside will be the content sale. He paints a scenario where an agent could be compensated on programming and usage. So, there could be a markup of preformatted programming, on custom channels created or the number of hits on a VoD program or the number of lines needed for a live cast, he says.
If you are sitting down to the early adopters and those visionaries who are really trying to establish a culture in their enterprise, this is a great platform and very costeffective, he says. The broadness and variety of content avails itself because theres not that embedded underlying cost ticket.
Read more about:Agents
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