As OTT, IPTV converge, here's one telco that advocates cutting the cord

editor's corner

Jim O'NeilThere's an awful lot of time spent debating whether over-the-top video actually is a driving force behind cord cutting in the cable market and, in fact, on whether a cord-cutting phenomenon actually exists.

But several stories over the past week suggest that--at the very least--the explosion of over-the-top content is affecting the pay-TV market and may be a looming threat to IPTV providers.

Last week, during the Broadband World Forum, Saudi Telecom Company CEO Saad Al Qahtani, during a keynote address, pointed out that STC was seeing very slow uptake of its new IPTV offering, InVision, which has fewer than 20,000 subscribers.

"Over-the-top video is emerging as a major contender to IPTV, given its content variety, convenience, personalization and low-cost advantages," he told the audience. "We have now reached nearly 20,000 subscribers for our own IPTV service, but we have discovered that the way to monetize the content ecosystem is to improve the handover between the TV, PC and mobile phone. We are working on ways to integrate those three screens into one ecosystem."

While STC, because of it's investment in its IPTV service and FTTH network, isn't likely to abandon the service any time soon, one U.S. telco last week said it had done just that.

Georgia independent telco Ringgold Telephone Co., which has offered an IPTV service since deploying one in 2003, told an audience at the Digital Home Summit in Orlando that it had not profited from its IPTV service and had decided to move on.

Now, it resells Dish Network's (Nasdaq: DISH) service and is looking to offer its customers a number of OTT alternatives--a free Roku box, for example, along with an HD antenna to pull in over-the-air signals--if they'll sign up for broadband.

In fact, Ringgold is upfront about its campaign to drive cord cutting among its prospective customers.

"It's too easy to just turn on the TV and let the cable company handle it," Phil Erli, Ringgold's EVP told Light Reading. "We want them to understand they have a lot more control than they might think."

To that end, Ringgold offers a "test" online that helps customers decide if they really need pay-TV.

Ringgold, like many smaller telcos, said the cost of retransmission fees--like the $5.25 per month, per sub fee a local NBC affiliate demanded--and the paucity of middleware that was attractive and affordable were the main problems.

"This business just doesn't scale, not as long as a local provider can stick a gun in your ribs and say, 'Give me all your money,'" Erli said.

The telco has managed to keep more than half of its IPTV subs with the new Dish offer and has even seen some customers who left for a cable competitor come back.

With Dish now expanding its own offerings, adding streaming content and DVD rentals through its Blockbuster Movie Pass launched last week, Ringgold's experience is likely to pique the curiosity of other Tier 2 and Tier 3 telcos looking to compete with cable and who are unwilling to take the leap to IPTV.

There's no question that the worlds of OTT and IPTV are converging as broadband speeds continue to rise and more content becomes available online.

I'd be interested in hearing what your telco is doing to offer video entertainment to your customers. IPTV? OTT? A hybrid? Lemmeno.--Jim