TelcoTV 2008: Give us your observations

TelcoTV 2008 begins today in Anaheim, Calif. It will provide a good opportunity to assess a market many U.S. telcos are probably pleased with, many vendors probably find lacking, and many international observers probably believe is at least slightly behind the times.

The service providers probably are happy simply because they have made the jump. They are providing TV service, and even if their adoption numbers are small right now, they likely feel they are better poised to promote bundled services consumers are ready to embrace in a tough economy for discount prices.

The vendors, of course, always would like the carriers to be spending more money, but amid the economic pressures, some vendors appear to be growing increasingly nervous about the possibility that carriers could slow down their TV expansions-- i.e., that the second phase of the telco TV era in the U.S. could last much longer than the first.

And despite the fact the one U.S. telco TV provider--Verizon Communications--has about 1.6 million IPTV customers, and another--AT&T--is nearing 1 million, the U.S, in terms of telco TV market maturation, trails France, Japan and a few other countries.

I would be very interested to hear if anyone attending TelcoTV 2008 this week comes away from the show with different observations. Please post a comment to this column later in the week and let us know.

Meanwhile, I'll predict right now that the big news for the telco TV industry in the U.S. for 2009 will not have as much to do with subscriber gains, as it will have to do with telcos' relations with the content industry. Telco TV players have a chance to leverage unique, often niche-market programming that cable TV offerings haven't pursued. But most content developers, whether major Hollywood studios, social networking devotees or college sports conferences, may still have revenue expectations that telcos can't satisfy. The next several months will see much talk and negotiation on how to develop content partnerships that satisfy both service providers and content developers. I'm not sure how that will pan out, but the near-term success of telco TV, after the initial customer fascination period passes, may rely on telco's ability to have an answer to this simple question: What's next?

-Dan

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