The Revolution in IPTV aspires to dawn a new age of entertainment by returning to the true spirit of what the entertainment industry originally stood for- Creativity and freedom of expression. Despite video or music on demand held promise for so long, it is only in last few years, IPTV has been able to beat the quality of DVD and Cable TV. Protection against piracy and superb quality acted as catalyst to exponential growth of IPTV Set Top Box industry. Even if US authority had cracked down on 83 pirate sites including the King Kong of forgery, Pirate Bay, entertainment industry is still bleeding heavily from the loss of revenue caused by the Torrent pirates. Source of piracy is always physical media like DVD and CD which will soon be history as DVD player will be replaced by IPTV Set Top Box in every home.
Despite introduced as early as 2006 by AT&T ( U Verse IPTV), IPTV emerged as the most viable alternative to DVD rues and escalating High Definition media ( Blue Ray) cost only with Roku Box-an IPTV box introduced by North America's largest movie retailer Netflix in 2008. While Roku forced the Netflix's rental competitor Hollywood Video and Block Bluster to bankruptcy- Google, Verizon and Amazon lost no time to launch their IPTV service in 2010-11. Currently, Netflix drives 1/4th of US audited traffic between 7-10 PM in any city and the movie watchers in IPTV are exponentially growing. And why not? Secured media delivery over Internet and that's too with a quality of Blue Ray is a dream come true story for both the viewers and the producers. So the IPTV is now movers and shakers in Hollywood-frenzy race is on among the distributors who can push their library faster than others to cash on to an emerging IPTV boom.
As much as it may sound a fascinating fairy tale of technological innovation, a savior of entertainment industry, the grim reality is otherwise for IPTV box and technology developers. IPTV is a lot more complex operation compared to Cable TV or any other format. It needs front end development in IPTV set-up box in addition to developing video hosting platform in
Content Delivery Network (CDN). If the providers decide to go with ready made platform like Brightcove etc. without developing their own, operational bandwidth cost can not be justified or sustained. Therefore the total integrated development cost may vary between $240k-$500k for successful launch of an IPTV platform. Moreover, mobile IPTV, Satellite IPTV and hybrid IPTV are emerging as new horizon for cashing on the existing contents which will add to additional R&D development cost. Besides, video encoding cost is also escalating and full automated encoding does not guarantee excellent quality. So despite the existence of full IEEE standard for IPTV like ( HomePNA 3.0 G.9954 ), cost of IPTV development is remaining a major issue.
When a single movie can gross between $100-200M, one may wonder, why such sub-million development cost is a significant impediment to IPTV growth? Well reality is, in video-on-demand (VOD) market only model that works is subscription and no IPTV provider has been able to charge more than $10 per month learning from their past failures. Even the largest IPTV provider like Roku has only 1.5 million subscribers. On the top, producers get their fat cut anything between 50-70%. So after paying the producers and developers, the distributors are finding it hard to extract any margin whatsoever.
Therefore, IPTV development is now heading offshore in India. Also, since development cost has to be contained tightly between $50-250k, software giants like Infosys, TCS and Wipro didn't develop much expertise in IPTV since the prospect does not commensurate with their size. On the other hand, medium sized companies like R-System Inc ( Head Quarter in Folsom, CA and development center in Delhi- A BSE listed public company) are much better poised for IPTV development and subsequent operational support from India. They are already supporting IPTV customers all over the globe both technologically and operationally cutting down the IPTV Capex by 60% and Opex by nearly 70%. R System is highly focused on IPTV and they offer development service for all the phases and all the verticals including Mobile IPTV, Satellite IPTV, Hybrid IPTV etc. offering both vertical expertise and cost saving. Rekhi Singh, CEO of R Systems further asserted:
The Digital Media space that covers solutions such as IPTV and Mobility is one of the fastest growing segments in the market today with the mobile video industry in the US alone expected to grow to $16B by 2014. We have been proactively pursuing this space since 2002 when we implemented one of the first online Digital Music services. Since then we have assisted one of the market leaders in the IPTV space to enhance and modify their product with several advanced IPTV centric features such as Video on Demand (VOD), Interactive polling. Similarly we have been ahead of the curve in the mobility space in areas such as Wi Max, Android and IOS development. With over 400 person years of experience in this space we are uniquely positioned to partner and assist our customers navigate through a very complex, overcrowded and rapidly evolving marketplace. This makes us unique in this space with few other vendors able to bring this kind of holistic expertise that has been developed though years of proactive investments
How the technology would evolve in IPTV market remains to be seen, but surely India has already emerged as the most favored back office for IPTV development and support.
