NBN: What Will IPTV Look Like?

Over recent months, much of the debate surrounding the National Broadband Network (NBN) has revolved around what it will be used for. What will it provide to Australians, that current broadband infrastructure cannot?

That depends very much on how you look at it – on a macro and/or micro level.

Can the current systems deliver internet to homes and businesses? Yes. Can they deliver video streams such as IPTV and video-conferencing? Yes. Can they deliver just about anything you could possibly package up and send over a data connection? Yes, of course, absolutely.

Two way interactive services? Not so much – but why build the NBN when we can do most of it already? We can, but that’s a very narrow view of the project. There are many social and economic benefits of the network.

Using the current infrastructure everything would be delivered to you over a single logical connection, all competing for the limited bandwidth available.

If everyone in the family is online at the same time, trying to use bandwidth intensive applications, the competition for the bandwidth amongst all the devices trying to access it will most likely make it a crappy experience for everyone.

In our house, it only takes two people watching a YouTube video, and it’s stop/start all the way.

So with the initial offer of up to 100Mbps for most people, raw internet bandwidth will be massively improved – and for many people, that will be enough.

However, the NBN will allow multiple distinct data services to be provisioned into your premises, over the single piece of fibre – two voice services, and four data services.

The next product offering from NBN Co after basic data and telephony will be for IPTV services – in lay terms, television over an “internet” connection.

I deliberately put quotes around “internet” because such connections might not be – (and most likely would not be) – actual internet connections. They would be connections to an IPTV provider, which might not necessarily require actual internet connectivity.

It might not even be the same company who provides your basic internet data connection to you over the fibre. It could someone completely different, such is the flexibility that the NBN provides.

That’s why the government is now calling them “RSPs” – (Retail Service Providers) – instead of “ISPs” – (Internet Service Providers) – because it is not just about internet any more.

One of the major complaints that many people have about subscription television services that companies like Foxtel and Austar provide is that they might be paying $100 per month for a particular package of channels – maybe 100 or more – but only ever watch 10 or 15 different channels.

You “have” to do it though to get the particular channels you REALLY want, even if you never watch most of the other channels.

What if you could pay a base fee for an IPTV service to be connected as a second service over your NBN fibre, and then go a-la-carte and pay a small fee for each of the channels you want, and ONLY the channels you want?

Say, for a single dollar a channel per month?

If I went through the entire list of channels available on the Foxtel platform, and picked out only the channels we regularly watch in our house, that number would come to about 25 out of that entire list.

What if an IPTV provider did a deal with Foxtel to have all channels available to customers, it charged us a base fee of $30.00 to have the service over our NBN fibre, and then one dollar for each of the 25 channels we ever really watch? That’s $55.00 a month – about $35.00 a month less than we’re paying now, and we’re only getting the channels we actually watch.

Win. And you may or may not need a set top box to watch them.

What if they did deals with other suppliers, in addition to Foxtel, to get access to channels that Foxtel doesn’t have? They could offer channels/channel packages that Foxtel could not.

More win.

Overall, it would still be good for Foxtel. They might end up with less “full service” customers over their existing satellite or cable platforms, but people who have avoided subscription television in the past, fearing the cost, might now consider it a more valuable proposition – and that would equate to new revenue streams.

IPTV technology is mature and very available, and I am currently working with such a system. Services like Netflix in the US provide streaming content to the public for less than $10.00 per month.

Traditional broadcast television is already becoming less important to many people, and tailored packages such as would be made possible by the NBN are going to become the rule, rather than the exception.

It will take time, but it will happen.

Multiple services into each home will provide more revenues to NBN Co, further reducing the financial risk the project entails. NBN Co’s business plan projects their desired outcomes with around 70% uptake.

If everyone has two connections, that’s 140% uptake.

Folks, the future is here, and it is time to embrace the possibilities.

  • Marcus Wong

    “What if you could pay a base fee for an IPTV service to be connected
    as a second service over your NBN fibre, and then go a-la-carte and pay a
    small fee for each of the channels you want, and ONLY the channels you
    want?”

    What makes you think that a-la-carte channels would be a given for the new IPTV providers? There isn’t any technical why Foxtel, Optus and Austar can’t do the same thing on their current HFC and Satellite networks – they bundle pay TV channels just because they can.

    Of course, IPTV providers using the NBN won’t have to fund an infrastructure rollout like the legacy subscription TV providers, so the barriers to entry for new entrants will be much lower. Because of this hopefully the IPTV providers will have a more enlightened view of what customers really want.

    • You’re right that I’m somewhat pontificating, and that Foxtel and Austar could do the same style of service.

      My point is that the market changes significantly, and gives other players the chance to play in the same sandpit – a sandpit that they couldn’t play in before, for reasons, as you suggest, such as initial infrastructure costs.

      Given that one of the overall goals of the NBN is to promote retail competition, this will provide that.

      You are also right that a-la-carte is only one possible model. It is up for the market to innovate, and you’ve highlighted that many other possibilities exist.

      I think that’s the point.

  • Regards your traffic slowing down comment, the NBN uses ‘Traffic Classes’ to designate accordingly.   The Multicast service will use a higher level of traffic class then normal internet, thus ensuring IPTV quality of service (ie, your TV screen won’t judder or go on the blink if someones on Skype upstairs)

  • Also channels are not just bundled because ‘They Can’ but mostly because a distributor won’t offer a premium channel without bundling in a slightly less well known brand to get the stuff seen….A bit like the LA Screenings where you can get a good price on a premium series if you also promise to air a slightly less promising series as well….

  • Anonymous

    While certainly using your imagination a little with your “what if” scenarios, I actually think you’re pretty close to the truth. The entire TV, film and video production industry is undergoing enourmous changes as a result of the massive surge in internet delivered content. Already consumers have hopped onboard with time-shifting on their PVRs, or using TiVo where you can download movies from CASPA from the same box. FetchTV is also rapidly growing, Telstra’s offerings are gradually improving with devices like the T-Box, and we’re seeing more and more creative ways advertisers are trying to reach consumers, given the 30 second TV spot they paid thousands for will be fast forwarded by so many.

    Its inevitable that as bandwidth increases, so will these services, as they are currently drastically limited by having to stick to the 1-4mbps per SD stream as to not bring customer’s ADSL/ADSL2 connection to its knees. Sure there are some limited HD films on offer from iTunes and X-Box (at exorbitant prices) but they are in the minority, and of course you cant stream them in real time as they are in the vicinity of 10-12mbps.

    All these services need room to expand in both content and quality and that’s exactly what the NBN will allow them to do. I’m hoping we start to see specialist IPTV providers such as an HD only movies service, where you pay a small premium for 1080p/5.1 films. Even that would only require 20mbps of bandwidth for real-time streaming, leaving 80mbps for other household needs (assuming we’re talking about a 100mbps connection).

    Entertainment has always been a catalyst for new technologies to be adopted, and the NBN will need that “wow factor” for people to really understand what its capable of. Hopefully we start to see more high bandwidth video services become available before the next election to sway people in favour of Labor’s plans (doubtful, but you never know).

  • Toby Allen

    What’s to stop a la carte options being applied to a service like Fetch TV currently? To me one of the main obstacles is the Foxstar content monopoly. Technically we can deliver services now but the content is locked into very expensive contracts. Perhaps what the NBN lends to IPTV is enough scale to secondary providers to challenge the current FreeTV/Foxstar content duopoly.

    • Nothing at all.

      However, the problem with current Fetch TV solutions in Australia is that the Fetch TV boxes in people’s homes are sharing their bandwidth needs with every other device in the home jockeying for access to the bandwidth.

      In an NBN world, the Fetch TV box could – (and probably would) – be given a completely separate connection from your basic internet service, and it wouldn’t have to be from the same provider.

      Say you like iiNet’s basic internet package, but you’re not so sure about their deals for Fetch TV? No biggie – get the basic internet from iiNet over one connection, and Fetch TV from, say, Internode – over another connection.

      Remember – four distinct data services – (as well as two distinct voice connections) – can come across your single NBN fibre simultaneously, and don’t have to come from the same RSP.