Welcome IPTV: Part II

Last month, CBS announced the imminent launch of the CBS Interactive Audience Network: a free, ad-supported network that will digitally deliver CBS programming and third-party content across digital media channels. CBS's ability to partner with leading next-generation interactive platforms is the best way to evolve from a content company to an audience company. The CBS Interactive Network's list of new content deals and online distribution partners in the emerging IPTV space is really long. Included are AOL, Microsoft, Cnet Networks, Comcast, Joost, Bebo, Brightcove, Netvibes, Sling Media and Veoh. Also, CBS previously negotiated content distribution arrangements with Yahoo, Apple's iTunes, Microsoft's Xbox, Amazon's UnBox and others. Mirroring its online strategy, CBS Mobile has concluded direct agreements with the three largest U.S. wireless carriers, AT&T, Verizon Wireless and Sprint, as well as leading next-generation platforms such as Qualcomm's MediaFLO.

What about cable providers? Comcast's strategy is to be the company that delivers entertainment, information and media on multiple platforms. The Fan, Comcast's broadband video player, is proving a successful enhancement to the TV experience as well. It is generating more than 80 million video views per month. Further, Comcast was quick to get involved in the DVR (digital video recorder) market. Their DVR is integrated with the digital cable service, which means that in addition to recording their favorite programs, customers have hundreds of channels to watch, and they can choose from more than 9,000 video on demand titles each month, many of which are not available on traditional, linear television. Speaking more broadly, Comcast is focused on developing applications built to take advantage of quad-play digital delivery. These applications will enable customers to receive television content, surf the Internet, make phone calls, and check e-mail or voice mail on multiple devices. They are piloting a new wireless service called 'Pivot' as part of a joint venture with Sprint that lets customers take their integrated home entertainment experience on the go. Through a new co branded wireless device, customers will be able to access TV content, music, video clips and games; access content on home DVRs and program their DVRs; use a single voice mailbox for home and wireless; surf the Internet using Comcast's Internet portal; and e-mail with Comcast e-mail addresses. That is amazing.

How about Hollywood? A number of film and tech industry superstars were among the earliest innovators in the digital video technology field, George Lucas' Industrial Light & Magic and Steve Jobs' Pixar notable among them. ClickStar, backed by Morgan Freeman's Revelations Entertainment and Intel, is digitally distributing first-release films by top industry names, as well as exclusive educational and documentary programming, before they hit the DVD and cable markets. A growing number of major studios, cable and TV production companies, including Sony Pictures Home Entertainment, Universal Studios Home Entertainment and Warner Bros. Home Entertainment, have agreed to provide films and programming in what might be viewed at least as partial acknowledgment that ClickStar has the right idea.

What about the people? It's the programmers and engineers working away at tech companies, cable and TV networks, telcos and equipment manufacturers who are collectively driving digital media convergence forward. A loose but resilient web of young entrepreneurial companies is playing an outsized role in the process. While companies such as Sling Media are offering new digital TV experiences through TV enhancement equipment and streaming wired and wireless IP services, companies such as Extend Media continue to work on increasingly powerful and flexible delivery platforms for digital content services. For example, the OpenCase solution from Extend Media is not simply an Internet TV distribution technology. The software doesn't simply distribute or push out video: It allows content and rights holders to control, secure, manage and, most importantly, monetize their broadband video assets. That's a key feature set for Internet TV deployments today, whether they make money via direct to own sales, rental, subscription or ad-supported models.

So, while threatening established TV networks, cable broadcasters and film studios, the emergence of IPTV and digital video also opens up a new world of opportunity. With more screens large and small popping up all over, people are watching more TV, films and advertising to the point where the danger may lie in over saturation. The battleground is less telco vs. MSOs (multi-cable systems operators), or even telco/MSOs against media and entertainment companies, than a sea change where open IP networks are taking over what was formerly requiring proprietary networks. Content owners and rights holders, as well as retailers, want to carve out a role that reaches the consumer directly without having to go through either Apple and its paid model or Google and its ad-supported model, the two opposing ends of the continuum in the industry right now. There is no question IPTV will be the next big wave in TV, entertainment and media. The big unknown, however, is how established and emerging providers of content and technology figure this entire difficult puzzle out.