While it was cable operators who made headlines at the Consumer Electronics Show last year with their sustained push into video-on-demand and digital video recorders, cable’s competitors stole the show at last week’s edition of CES in Las Vegas.
Leading the charge was SBC, which detailed its plans to roll out an Internet protocol TV infrastructure that will enable a convergence of services such as TV, DVRs and VOD across multiple devices.
Bolstering the SBC news were announcements from satellite providers DirecTV and EchoStar of plans to introduce new interactive and advanced services, including a movie-on-demand service from EchoStar coming in the next few months.
Certainly telcos have announced video plans previously and skeptics still question whether these latest initiatives will indeed materialize. While only time will tell, SBC’s plans to introduce its so-called “U-Verse” IPTV service later this year generated the most buzz at the show.
Details of the service come on the heels of Verizon’s announcement late last year of plans to begin the rollout of video services this year, and behind the recent news that legislation has been introduced into Congress that would pave the way for phone companies to offer video services as part of integrated IP-based services, eliminating the need for local franchise approvals.
At the show, SBC CEO Ed Whitacre outlined the company’s plans to deliver next-generation TV services over an SBC fiber network using an IPTV infrastructure-its $4 billion Project Lightspeed initiative.
“We will offer a suite of fully integrated services on our new fiber network … using the power of the Internet to truly achieve the convergence of voice, video and data,” Mr. Whitacre said.
SBC is testing the technology now and toward the end of the year expects to introduce the U-Verse suite of services that will allow consumers to access and interact with content across set-top boxes, wireless and wireline phones, personal digital assistants and wireless hot spots.
The IPTV infrastructure enables high-definition TV and VOD and four simultaneous streams of video, picture-in-a-picture, a DVR on every TV in the home and instant channel changes, eliminating the lag time that occurs with today’s interactive program guides, said Lea Ann Champion, senior executive VP of advances services at SBC, who demonstrated the capabilities during Microsoft Chairman Bill Gates’ keynote speech at the show. Microsoft and SBC inked a $400 million contract late last year for Microsoft to deliver the IPTV services.
One of the gee-whiz features of an IPTV network is that a consumer can program, for instance, a home DVR from an office computer or a mobile phone, Mr. Whitacre said. “With U-Verse, if you are running late, you can use your cellphone to tell your DVR to record a show you might have missed,” he said.
An IPTV network also allows consumers to choose shows, edit shows, select camera angles during sporting events and retrieve information from the Internet while watching TV. In addition, the service allows consumers to have only one inbox and one address book for the cellphone, computer and home phone, he said.
SBC plans to install another 40,000 miles of fiber this year for the new network. The network will enable bandwidth that is four times faster than today’s broadband speeds, he said. Within three years, about 18 million households will have access to the network.
Down the road, an IPTV infrastructure will allow interactive TV, such as the ability to select different camera angles for sporting events, a service that’s offered on satellite operator BSkyB in the United Kingdom. Using a baseball game as an example, Ms. Champion demonstrated an application in which viewing of the game can be controlled on the right portion of the TV screen, with viewers choosing between multiple angles, while in a column on the left side of the screen the user can see miniature pictures of other games in progress as well as statistics on those game.
“You can see what you want to see. Viewing sports will never be the same in this next generation of TV viewing,” she said.
Mr. Whitacre acknowledged that this isn’t the first time a telephone company has talked about a new world of video entertainment. “But this time is different,” he said. “Quite simply, the timing is right. We aren’t ahead of the headlights. We aren’t rushing into anything. The alignment of technology, software and digital networks is finally here.”
Still some industry experts remain skeptical when it comes to the telcos’ plans. “This isn’t the first time the telcos have said that, so I do have a bit of a `show me’ attitude,” said George Bodenheimer, ESPN president. However, the real beneficiary of the heightened competition is not only the consumer but also the content providers.
“Obviously, for a content provider it opens up a whole new realm of possibilities,” he said. “It almost seems limitless to take a brand like ESPN and bring it to new devices.”
Also poised to win in the competitive battle are equipment providers. Scientific-Atlanta for one is in talks with telcos about providing set-top boxes that deliver their IP-based video content to consumers, said Himanshu Parikh, VP and general manager for IP subscriber networks at Scientific-Atlanta.