Launching a successful IPTV service
- 1. LAUNCHING A SUCCESSFUL IPTV SERVICE SVP Advisors For further information please contact: Dimitri Kallinis (dimitri.kallinis@svpadvisors.com) www.svpadvisors.com RETHINKING communications
- 2. Significant value can be added throughout the IPTV lifecycle Assessing the Launching the Maximizing opportunity service revenue Market & Commercial Technology Strategy review Review Gap analysis Planning Profit analysis Service & Project content Positioning development optimization Testing & Revenue Objectives stimulation go-to-market 2 Madrid, 2009© SVP Advisors
- 3. The objectives and targets set the framework for service launch MARKET CHARACTERISTICS OBJECTIVES BUSINESS TARGETS Become leading • Low Pay TV penetration provider of • Strong TV consumption premium TV content ARPU T V • Hi Pay TV penetration Differentiate TV CONNECTED offer with HOUSEHOLDS • Poorly differentiated offer innovative IP based services • Low BB penetration Accelerate penetration of BB • High connection speeds (>6Mbps) the BB service MARKET B SHARE B Differentiate CHURN • High BB penetration value proposition RATE • Service seen as a commodity to boost sales and retain customers 3 Madrid, 2009© SVP Advisors
- 4. The IPTV strategy is built around four pillars which are highly dependent on each other IPTV Platform Provisioning Set-Top-Box EPG Architecture Graphic Interface Customer Infrastructure Experience IPTV STRATEGY Commercial Content Packages VoD / SVoD Pricing TV Channels Advertising VAS 4 Madrid, 2009© SVP Advisors
- 5. The choices of the platform and the system architecture are both very critical … IPTV STRATEGY: INFRASTRUCTURE IPTV PLATFORM ARCHITECTURE • The IPTV service is delivered through a multi-layered Content Head-End Live platform made of several Ingestion TV integrated modules • As a rule of thumb the Subscriber Security Set modules should be: User Conditional Top Interace • Highly scalable Access, Middleware Box (SUI) Encryption, • Open to support multiple DRM contents and services • Able to guarantee VoD & Content Delivery Network maximum service security Systems & Service monitoring IP Access Network 5 Madrid, 2009© SVP Advisors
- 6. … and depend on the objectives, available resources and time requirements of each specific Operator IPTV STRATEGY: INFRASTRUCTURE Multiple Vendors Closed Single Vendor Open (Ericsson, Thomson, (e.g. Microsoft) Platform Independent Platform Providers,…) • High upfront, scalability, recurring costs • Low upfront and maintenance costs • Small internal engineering team required • Internal engineering team is mandatory • Easy and relatively quick to go live with • Strong capability in driving service featured platform’s services roadmaps, defining functionalities and service range • Services and functionalities directly dependent on product release roadmaps • Flexible and easy to customize • Long and uncertain response time on new • Responds effectively to new service product and service requirements additions and expanding customer base Examples: Swisscom, British Telecom, Bell Examples: France Telecom, Belgacom, Canada, Deutsche Telekom Fastweb, Telefónica, Free, 6 Madrid, 2009© SVP Advisors
- 7. The customer experience begins with the installation of the Set Top Box and the provisioning of the service IPTV STRATEGY: CUSTOMER EXPERIENCE Connection • The installation of the STB cost ($) (connection to network and TV set) must not be underestimated On site “full” installation (includes internal wiring) • It is not uncommon for operators to discover that a relevant % of On site “light” installation delivered STBs end up (courier + unconnected demo) • In general, the higher the Telephone assisted installation cost the greater the installation % of STB connected “Plug and • A good solution could be to offer Play” solution various options to the customer to choose from % of STB connected over provisioned 7 Madrid, 2009© SVP Advisors
- 8. A functional and captivating User Interface is essential to achieve high levels of service usage IPTV STRATEGY: CUSTOMER EXPERIENCE An efficiently performing User Interface shall: • Include graphics which are directly built upon the selected STB … • … and have been conceived explicitly for a TV user environment • Be simple and quick to navigate … • .. and present a pleasant “look and feel” • Effectively help users to find the content of their choice among hundreds of titles and service applications • Strike a good balance between strong interactivity and the smooth operation of the system 8 Madrid, 2009© SVP Advisors
- 9. The number of existing and potential subscribers determines the quantity and quality of the content offered IPTV STRATEGY: CONTENT Content value ($) ILLUSTRATIVE Acquisition of premium TV rights (rare) Own TV channels (e.g. Sports) VoD Library Premium TV (Hollywood and channels local titles) (localized version) Premium TV channels (int’l version) TV Games FTA TV channels (casual games e.g. (National and Tetris, Solitaire, …) VAS (e.g. catch- International) up TV, HD, etc…) N of subscribers Service launch 9 Madrid, 2009© SVP Advisors
- 10. Each type of content should be approached in a different way IPTV STRATEGY: CONTENT • Diversify the offer in terms of title, age (current, library, classical) and genre • Refreshment rate and number of blockbuster titles are key success factors VoD • Expect to pay high minimum guarantees and revenue share above 50% • No (or very small) fees are usually paid for FTA channels • Int’l versions of premium channels are sold for a flat fee or a fee/sub/mth TV • Localized versions (subtitled, dubbed, voiceovered) always require a premium channels • Catch-up TV and time shifting can become your killer applications • Usually an “all-you-can-eat” model works best for TV Games VAS • There are (too) many VAS on offer – only very few can make an impact 10 Madrid, 2009© SVP Advisors
- 11. The commercial offer can vary considerably as a result of the content offered and the TV market characteristics of each Country IPTV STRATEGY: COMMERCIAL Thematic Premium A la carte All inclusive packages packages VoD Pay per view Pay per view Pay per view (pay per view) All premium Sports TV channels Premium TV All premium + channels Documentaries TV channels All VoD titles Kids + Unlimited Currents Subscription All VoD titles plays VoD Library + All FTA TV Games Pay per game Unlimited plays Unlimited plays channels + FTA TV VAS (if any) National + Int’l National + Int’l National + Int’l channels* Level of content aggregation * Often included in the entry/basic TV package (free of charge, e.g. part of a triple play bundle, or for a small monthly fee) 11 Madrid, 2009© SVP Advisors
- 12. The IPTV launch is a long project consisting of many activities grouped in four phases and involving several departments Concept Development Pilot Launch • High-level • Systems • Friends & Family • Soft launch service definition purchase and (100-200 users) (optional) integration • Platform (or • Limited content • Commercial modules) • STB purchase and functionalities offer (service selection and testing (offline) bundles, promos, etc…) • RFP to vendors • User interface • Data gathering design and elaboration • Marketing event • Draft budget for investments and • Integration with • Fine tuning of • Media campaign content costs network and IT full scale (CRM, billing, deployment • Sales • Internal product OSS) requirement Content acquisition and aggregation Time required to complete the process: minimum 6 months 12 Madrid, 2009© SVP Advisors
- 13. SVP can help Operators make the most of their IPTV service We are ideally placed … … to add value to IPTV services Our Consultants have developed a We can leverage our outstanding track- unique set of skills and gained record to help Operators make their unrivalled international experience IPTV service successful. on IPTV thanks to work carried out in: We are equip to undertake an • Technical and commercial IPTV assortment of assignments during the operations in 5 large European various phases of the IPTV service Countries lifecycle - indicatively: • Advisory projects for Operators and projects on behalf of financial • End-to-end project support institutions • Business planning • Int’l benchmarking Furthermore, our Consultants form part • Content acquisition & aggregation of an extensive business network of: • Commercial offer definition & review • Service bundle maximization • Content providers and aggregators • Profit analysis • Vendors and IPTV solution providers • Revenue stimulation • System integrators • Regulatory support (for incumbents) 13 Madrid, 2009© SVP Advisors
- 14. Any questions or comments? Please contact: Dimitri Kallinis Partner dimitri.kallinis@svpadvisors.com Address: C/ Almagro 15, 5th floor 28010, Madrid Spain Telephone number: +34 91 310 2895 Fax number: +34 91 141 28 11 2009 © SVP Advisors STRICTLY CONFIDENTIAL