Abstract
The viability of telco IPTV worldwide will be based on the ability of the service providers to
offer consumers a compelling lineup of video services that is priced attractively and sufficiently
differentiated in content and functionalities in order to steal subscribers from cable and/or
satellite companies. As they sail in these uncharted waters, the telcos will have to play by the
rules of an industry whose deal-making culture is completely alien to them. As the industry matures,
IPTV penetration will depend essentially on correct pricing and marketing.
Access to high-value content and the creative presentation and usage rules of IP video content
will fundamentally dictate the success of telco TV. In order to license movie content for IPTV VoD,
the telcos will have to play by the rules of the entertainment industry by offering advances and
guarantees. An adequate legal framework under which to operate will also guarantee stability to the
fledgling services and build a stable foundation for the future, whether by signing regional
franchises or adopting an FCC-defensible "IPTV common carrier" model. In order to quickly
capture market share from cable and satellite, telcos will have to offer parity with current
programming by these incumbents and, additionally, differentiate with exclusive and original
content, flexible programming options at various price points, innovative service features, and IPTV-specific
functionalities. Service pricing and marketing will also be paramount. Ovum believes that the
eventual profitability of IPTV will also depend on attractive pricing of the dual-play bundle of
high-speed Internet access and IPTV or the triple-play version that includes wireline local
telephony. Effective marketing campaigns will focus on bundled cost-savings and on positioning IPTV
as a new way to view favorite shows and movies anytime, anywhere. | 
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