IPTV must be great experience, and good value

BT Vision recently expanded its IPTV VoD service with a selection of HD movies, so we decided to try out the experience for ourselves.

Rather than providing instant access, BT pushes the requested HD films to the hard disk located in the customer's DVR. Movies take at least five hours to download and the current range of HD content on BT Vision comprises just seven movies, of which just two are recent releases.

On the plus side, the picture quality is far superior to BT Vision's regular VoD service. The main problem is that it doesn't represent a preferable alternative to either online DVD rental stores or the growing number of device-based VoD services that bypass network operators and take the content directly from Internet to the TV set-top box.

While IPTV providers strive to enhance linear TV with "˜advanced' video services, web-based options are also growing in popularity. over-the-top (OTT) VoD products are becoming more advanced, with some - such as Apple TV and Vudu - delivering high-quality picture and sound to the TV.

Meanwhile, online DVD rental services offer both the convenience of postal delivery and a half-decent selection of HD titles. We also found that DVD still delivers better quality picture and sound than most of the download services we've tried so far and so, without clear differentiation around instant streaming, even consumers that are willing to try out "˜download to own' may find themselves harking back to the good old DVD.

Best effort substitute is no good

BT clearly recognises the growing importance of HD and is doing its best to accommodate this within the confines of its network's capabilities. But where's the value in its new push-VoD HD proposition‾

No IPTV operator can expect consumers to settle for such a limited service, given the growing choice of alternatives. They will more likely stick with a tried-and-tested DVD rental service like Lovefilm, while the more adventurous will go for one of the emerging OTT brands such as Apple, simply because they offer more choice.

To attack traditional pay-TV operators effectively, as well as defend themselves against OTT players, IPTV operators need to focus their efforts on quality of experience, not just price and service flexibility. This approach will be especially important in markets with a good quality, free-to-air DTT offering which consumers can supplement with some type of interactive video service.

This, after all, is the "˜hybrid' model that BT and a growing number of IPTV operators are following.

Helena Schwenk, Senior Analyst

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