Alcatel-Lucent panelists see online video as bonus, not threat

Online video, when properly managed and delivered, can actually benefit telcos offering IPTV, service providers and vendors said Wednesday at TelcoTV 2012 in Las Vegas.

"There's going to be a proliferation of more choices, more over-the-top content," said Joseph Weber, vice president of technology strategy for TiVo (Nasdaq: TIVO), speaking at an afternoon panel entitled "Adding OTT to Your IPTV Offering."

Weber suggested the best way for telcos to profit from OTT is to "bring the package together [because] that's what sells."

Actually, what still sells--or at least draws subscribers--is plain old television, said Bernie Arnason, managing partner of Pivot Media, speaking at an Alcatel-Lucent (NYSE: ALU) workshop entitled "Bringing Video Services to All Consumers on All Devices."

"Traditional TV is still very much key... very much dominant despite all the destructive forces that are at its heels," Arnason said. OTT, delivered over telco broadband pipes, is gaining both viewers and space on the pipes and should be considered in any video play a telco makes, he added.

"We can't ignore the reality and the impact of video," Arnason said.

Certainly, Bob Wilson, general manager of Wes-Tex Telephone Cooperative, isn't ignoring that reality of video--or the cost. His goal, he said, is to answer customer demand for "more and more for less and less" by making it easier for his subscribers to access OTT. "Why not drive it through your TV set rather than a PC?" he asked at the Alcatel-Lucent workshop.

Video is a "convenience business," added Marty Roberts, senior vice president of sales and marketing for thePlatform, speaking at that same workshop, and OTT is "quickly becoming" an expectation for broadband consumers."There are a lot of opportunities when we provide an online portal," he added.

OTT--or any form of online video delivery--also gives the service provider a new degree of flexibility in the type of content it delivers, said Tony Stout, CTO of Palmetto Rural Telephone Cooperative.

Conceding that the "cost of content is going to continue to increase," Stout suggested that telcos with broadband pipes should consider working with content aggregators to "monetize over-the-top."

Besides that, he suggested, a more IP-centric delivery method would allow operators to deliver content through devices other than traditional set-tops and reduce the capital expense of purchasing those devices.

Online video also offers a way to target advertising--a lucrative opportunity that's just started to grow, said Roberts, also speaking at the workshop.

"It's a much more accountable system for marketers," he said of using online delivery to target individual video viewers.

Extending that a step further, he also suggested that operators "introduce pay-per-view as a new revenue opportunity" using what might be considered local or niche content.

Local content makes OTT "complementary" with IPTV services, said Scott Roe, video solutions manager of service provider Nex-Tech, speaking at an OTT panel.

Nex-Tech's "big focus is local over-the-top things" like high school football and city council meetings, Roe said. Merging more extensive content into the pay TV offering, especially in rural Kansas with an older demographic, is not something that would be welcomed, he said, so "we're definitely not early adopters."

Roe, like service providers in the earlier panels, was lukewarm about the idea of video as a revenue-generator.

"I don't think video is going to make a lot of money," he said. But OTT video, he said, will work in another direction, driving broadband business "because the more they see the more broadband they need."

Even with the high cost of content and the threadbare earnings from video, Roe emphasized that Nex-Tech has "no intention of getting out of the pay TV business" because "there are too many other people out there willing to provide it."

Related articles:
ABI Research: Online video seen as multi-billion dollar threat to pay TV revenues
Bell Canada wants to fight U.S. OTT invasion with 'made in Canada' service