A robust home network is perhaps the most important element when deploying a successful telco video service, and, for now, it's a space that's very unsettled, panelists at an Alcatel-Lucent TelcoTV workshop said Wednesday.
"That's the No. 1 issue for us," said Tony Stout, CTO of South Carolina-based Palmetto Rural Telephone Cooperative.
Palmetto, Stout said, can deal with issues of getting the content to the home via technologies that include VDSL2, copper bonding and fiber. It can handle the fact that content costs more than subscribers think it should--if subscribers are aware of the cost--and that delivering a video service is a "very difficult long-term strategy because we're breaking even--at best," he said.
The most troublesome part of the video equation and the place where the telco spends "95 percent" of its time today is in the home, working with home networking issues and making certain consumers can see all the content they're buying.
"The home is just unmanaged today," Stout said. "With IPTV, that home's a black hole."
Stout called on vendors to "step up" their efforts to develop software and management platforms that will give operators a better look inside the home without sending a truck and a technician to deal with issues.
Outside the home, perhaps the biggest issue facing telcos--aside, of course, from finding enough bandwidth to deliver all the services that consumers demand--is content. While traditional TV programming costs too much and "customers don't understand why our costs continue to increase," it is necessary to pay the piper to get a video element to complement broadband and voice service, Stout said.
Video, he said, brings "value to the POTS line," even though "the POTS line is obviously dying; it's not cool anymore." Still, he added, "video seems to be that sticky factor" that keeps consumers subscribed to their traditional telephone service.
Content can be a differentiator, added Bob Wilson, general manager of Wes-Tex Telephone Cooperative, who pointed to two niche video applications as ways to attract consumers to a telco's local video service rather than a national service from a satellite provider or even a cable operator.
Presenting local football games on VoD is a winner in Texas, as is recording and playing church services, he said.
"The thing that helps us out is that we are local," he said. "What major carrier can you call and talk to the CEO?"
Wes-Tex is not totally local, though. The company, which is rolling out an FTTH network to its local customers, is also participating in a consortium with three other providers in Texas and New Mexico to share content costs and divvy up advertising opportunities.
Wilson, like Stout, emphasized that he doesn't "envision making tons of money" on a video service. "We're doing this to make our subscribers sticky," he said, concluding that it is "extremely important to lock those customers into us as their primary provider."
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